U.S. Tax Basis Information on Warrants


Distribution of AIG Warrants on January 19, 2011


Completed IRS Form 8937 Report of Organizational Actions Affecting Basis of Securities

Section 6045B Reporting

United States Internal Revenue Service Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, any U.S. tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

Purpose:
Section 6045B of the Internal Revenue Code of 1986, as amended (“Code”), requires an issuer of stock to provide to the United States Internal Revenue Service (“IRS”) and to the holders of stock certain information on organizational actions that affect the tax basis of such stock for United States federal income tax purposes. Under Treasury Regulation § 1.6045B-1(a)(3) and (b)(4), an issuer may comply with these requirements by posting such information on its public Web site.

Issuer:
American International Group, Inc. (“AIG”)

Issuer TIN:
13-2592361

Description of Organizational Action:
On January 19, 2011, each holder of record of AIG’s Common Stock as of the close of business on January 13, 2011 received a number of Warrants equal to the number of shares held of record multiplied by 0.533933 (the “Distribution”).

The United States Internal Revenue Service has ruled that the Distribution does not qualify as a tax free stock distribution. However, based on available information and under the rules of the United States Internal Revenue Code, AIG characterized the Distribution as a nondividend distribution in taxable year 2011 in the Form 1099s it provided to shareholders.

Securities Involved:
  1. AIG Common Stock (“Common Stock”)
    CUSIP: 026874784
    NYSE Ticker Symbol: AIG
  2. Warrants to Acquire AIG Common Stock (“Warrants”)
    CUSIP: 026874156
    NYSE Ticker Symbol: AIGWS

Effects on Tax Basis:
For United States federal income tax purposes, the Form 1099s AIG provided to shareholders characterized the Distribution of each warrant as a nondividend distribution under section 301(c) of the Code in taxable year 2011 in an amount of $16.29. Under this treatment, the Warrants will have a tax basis of $16.29, and a holder should reduce its tax basis in each common share on which the Distribution was made by $8.70, but not below zero. This amount is the average of the highest ($16.93) and lowest ($15.65) price at which Warrants were purchased and sold on the NYSE on January 20, 2011, the first trading date following the issuance of the Warrants, multiplied by 0.533933 (the number of Warrants that were distributed per common share).

All holders should consult their own tax advisors regarding the United States federal and other tax consequences of the Distribution.
 
Contact Person:
If you have any questions, please contact:

American International Group, Inc.
Elizabeth Werner
Vice President – Head of Investor Relations
Investor Relations Department
180 Maiden Lane
New York, NY 10038
IR@aig.com
212-770-6293

Posted: March 3, 2011
Last Updated: August 20, 2012


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