A Deferred Tax Asset is an asset on a company's balance sheet that can be used to reduce taxable income.

It is the opposite of a deferred tax liability, which describes something that shall increase income tax.

The Tier 1 common capital of the Bank of America is benefited by $1.8 billion by reducing the deferred tax asset deduction.

Bank of America has got into agreements with certain holders of (non-government) perpetual preferred shares to exchange their holdings of approximately $5.9 billion of preferred stock into approximately 436 million shares of common stock.

This results in a total benefit to Tier 1 common capital of $5.9 billion.

The company proclaimed that it raised $13.5 billion through issuing 1.25 billion shares in an at-the-market common stock offering.

It has also sold part of its holdings in China Construction Bank, generating a capital gain.