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Income Taxes | 9 Months Ended
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Sep. 30, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The following is a reconciliation of income taxes on continuing operations at the statutory rate of 21% to the provision for income taxes as shown in AFG’s Statement of Earnings (dollars in millions):
| Three months ended September 30, |  | Nine months ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
| Amount |  | % of EBT |  | Amount |  | % of EBT |  | Amount |  | % of EBT |  | Amount |  | % of EBT
Earnings (loss) from continuing operations before income taxes (“EBT”) | $ | 267 |  |  |  |  | $ | 40 |  |  |  |  | $ | 890 |  |  |  |  | $ | (5) |  |  |
Income taxes at statutory rate | $ | 56 |  |  | 21 | % |  | $ | 8 |  |  | 21 | % |  | $ | 187 |  |  | 21 | % |  | $ | (1) |  |  | 21 | %
Effect of: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pending sale of Neon | — |  |  | — | % |  | (73) |  |  | (183 | %) |  | — |  |  | — | % |  | (73) |  |  | 1,460 | %
Stock-based compensation | (2) |  |  | (1 | %) |  | — |  |  | — | % |  | (12) |  |  | (1 | %) |  | (3) |  |  | 60 | %
Employee stock ownership plan dividend paid deduction | (2) |  |  | (1 | %) |  | (1) |  |  | (3 | %) |  | (10) |  |  | (1 | %) |  | (1) |  |  | 20 | %
Tax exempt interest | (2) |  |  | (1 | %) |  | (2) |  |  | (5 | %) |  | (6) |  |  | (1 | %) |  | (7) |  |  | 140 | %
Dividends received deduction | — |  |  | — | % |  | (1) |  |  | (3 | %) |  | (1) |  |  | — | % |  | (2) |  |  | 40 | %
Foreign operations | 2 |  |  | 1 | % |  | (4) |  |  | (10 | %) |  | — |  |  | — | % |  | (3) |  |  | 60 | %
Adjustment to prior year taxes | (1) |  |  | — | % |  | 1 |  |  | 3 | % |  | (1) |  |  | — | % |  | 1 |  |  | (20 | %)
Nondeductible expenses | 2 |  |  | 1 | % |  | 1 |  |  | 3 | % |  | 6 |  |  | 1 | % |  | 3 |  |  | (60 | %)
Change in valuation allowance | (2) |  |  | (1 | %) |  | 20 |  |  | 50 | % |  | 1 |  |  | — | % |  | 31 |  |  | (620 | %)
Other | (3) |  |  | (1 | %) |  | 3 |  |  | 7 | % |  | — |  |  | (1 | %) |  | 3 |  |  | (61 | %)
Provision (credit) for income taxes as shown in the statement of earnings | $ | 48 |  |  | 18 | % |  | $ | (48) |  |  | (120 | %) |  | $ | 164 |  |  | 18 | % |  | $ | (52) |  |  | 1,040 | %
In September 2020, AFG reached a definitive agreement to sell the legal entities that own Neon (see Note C — “Sales of Businesses,” which resulted in a loss on sale for U.S. tax purposes. In accordance with accounting guidance for transactions that meet the GAAP “held for sale” criteria, AFG recorded a $73 million tax benefit associated with this loss in the third quarter of 2020. The changes in valuation allowance in the table above are primarily increases in the valuation allowance on tax benefits related to losses in the Neon Lloyd’s insurance business. Approximately $27 million of AFG’s net operating loss carryforwards (“NOL”) subject to separate return limitation year (“SRLY”) tax rules will expire unutilized at December 31, 2021. Since AFG maintains a full valuation allowance against its SRLY NOLs, the expiration of these loss carryforwards will be offset by a corresponding reduction in the valuation allowance and will have no overall impact on AFG’s income tax expense or results of operations.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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