Annual report pursuant to Section 13 and 15(d)

Income Taxes

v2.4.1.9
Income Taxes
12 Months Ended
Dec. 31, 2014
Income Tax Disclosure [Abstract]  
Income Taxes

NOTE 5 - INCOME TAXES

 

The provision for income taxes is as follows:

 

    December 31,
    2014   2013
Federal:                
     Current   $ —       $ —    
     Deferred     1,040,000       179,000  
      1,040,000       179,000  
State:                
     Current     —         —    
     Deferred     —         —    
      —            
Provision for Income Taxes   $ 1,040,000     $ 179,000  

  

A reconciliation of the provision for income taxes computed using the US statutory federal income tax rate is as follows:

 

    December 31,
    2014   2013
Tax provision at US statutory federal income tax rate   $ 1,098,000     $ (408,000 )
State income tax, net of federal benefit     —         —    
Depreciation     18,000       16,000  
Related party accrued interest     (282,000 )     182,000  
Gains & losses on marketable securities     (691,000 )     629,000  
Stock based compensation     336,000       —    
Net operating losses carry forwards     845,000       383,000  
Change in valuation allowances     (284,000 )     (623,000 )
     Provision for Income Taxes   $ 1,040,000     $ 179,000  

 

The significant components of the Company’s deferred tax assets were:

 

    December 31,
    2014   2013
Deferred Tax Assets:                
     Net operating loss carry forward   $ 334,000     $ 912,000  
     Unrealized losses on marketable securities     375,000       630,000  
     Stock based compensation     336,000       —    
     Depreciation and other     23,000       —    
     Related party accrued interest     —         282,000  
      1,068,000       1,824,000  
Less valuation allowance     (1,068,000 )     (784,000 )
Net Deferred Tax Asset   $ —       $ 1,040,000  

 

Deferred tax assets and liabilities reflect the effects of tax losses, credits and the future income tax effects of temporary differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and are measured using enacted tax rates that apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

 

The Company’s net operating loss carry forward for income tax purposes as of December 31, 2014 was approximately $529,000 and may be offset against future taxable income through 2032. Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited.

 

Uncertain Tax Positions

 

ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. In many cases the Company’s uncertain tax positions are related to tax years that remain subject to examination by relevant tax authorities. The Company is generally no longer subject to U.S. federal, state or local income tax examinations by tax authorities for years before 2011. However, as of December 31, 2014, the years subsequent to 2011 remain open and could be subject to examination by tax authorities including the U.S. Internal Revenue Service and major state and local tax jurisdictions in the United States.

 

Interest costs related to unrecognized tax benefits are classified as “Interest expense, net” in the accompanying consolidated statements of operations. Penalties, if any, would be recognized as a component of “General and administrative expenses.”

 

As of December 31, 2014, the Company had no liability for unrecognized tax benefits and no accrual for the payment of related interest and penalties, nor did the Company recognized any interest or penalties expense related to unrecognized tax benefits during the years ended December 31, 2014 or 2013.