(Reuters) - Bailed-out insurer American International Group reported a profit of $19.8 billion for the fourth quarter, after an accounting determination that it is likely to post future profits let it release the value of some tax benefits.

The move essentially means AIG will not pay tax on tens of billions of dollars of income in the coming years, thanks to benefits that stem from its financial crisis-era losses.

AIG said in the third quarter that its results in the fourth quarter would determine whether it could release a so-called valuation allowance against the tax assets.

Having determined it is more likely than not to be consistently profitable in the future, it released most of the allowance in the quarter.

Some of the allowance, related to the company's life insurance business, was not released, a recognition that future profits are not as immediately certain there.

Net income was $19.8 billion, or $10.43 per share, compared with a year-earlier profit of $11.18 billion, or $16.60 per share. AIG's share count rose year over year, explaining the earnings-per-share discrepancy.

On an operating basis, the company earned 82 cents per share. Analysts polled by Thomson Reuters I/B/E/S on average expected earnings of 63 cents per share in the quarter.