Morgan Stanley (NYSE: MS) announced in SEC filings on Friday that it would take a $1.25 billion charge in its fourth quarter earnings due to the tax reform passed by the Trump administration. The charge will also include an approximate $1.4 billion net discrete tax provision
Morgan Stanley says it is partially offset by an approximate $160 million net discrete tax benefit.
The tax reform, which was passed in December, slashed corporate tax rates from 35 percent to 21 percent, but many companies have provided statement regarding a deficit charge for the a short term period.
Morgan Stanley, along with other major financial institutions such as Citigroup, JPMorgan Chase, Bank of America and Goldman Sachs have all announced a deficit for the upcoming quarter. The banks reassure shareholders that the charge will only be short term and will bring positive impact in the future.
Among the banks, Morgan Stanley is expected to take one of the lowest charges as opposed to Citigroup who forecasts a $20 billion charge if the bill is signed.
Along with the tax cut, many other companies have announced to raise wages, offer additional bonuses, donate to charity, and invest back into the business itself to grow.