If you thought the $4 billion charge that AT&T was left owing Deutsche Telekom after abandoning the merger with their subsidiary T-Mobile seemed a little steep, don’t worry–they’re only likely to pay a small chunk of that, thanks to the wonders of tax deductions. Speaking to reporters, AT&T CFO John Stephens said “I certainly expect that [$4 billion amount] will be fully tax deductible. You guys can do the math on that, but essentially it is a much smaller cash impact than the first impressions may give you.” UBS analysts did do the math, and it looks like Uncle Sam will be covering around $2.2 to $2.5 billion of that $4 billion charge. AT&T refused to comment on the estimate, but try not to think about it too much during tax season just in case.
