Freddie Mac May Owe $750 Million in Taxes

Freddie Mac, the second-largest U.S. mortgage buyer, said its accounting for derivatives trades that led the company to understate income for the last three years may result in a $750-million tax liability.

The Internal Revenue Service has inquired about the trades as part of the company’s earnings restatement, which may total about $4.5 billion, McLean, Va.-based Freddie Mac said. Derivatives are financial contracts tied to financial instruments, currencies and interest rates.

From Bloomberg News