Note 16 - Income Tax

In December 2017, the Tax Cuss and Jobs Act (the “2017 Tax Act”) was enacted. The 2017 Tax Act includes a number of changes to existing U.S. tax laws that affect the Company, most notably a reduction of the top U.S. corporate income tax rate from 35% to 21% for tax years beginning after December 31, 2017. The 2017 Tax Act also provides for the acceleration of depreciation for certain assets placed in service after September 27, 2017 as well as prospective changes beginning in 2018, including additional limitations on the deductibility of executive compensation and interest.

The Company and its subsidiary, WCI, are taxed as C-Corporations for federal income tax purposes. Mentor subsidiary LLCs were disregarded entities for income, therefore, MIP, Partner I, CAST, MCB and CCH taxable income or loss is reported by their respective shareholders.

The provision (benefit) for income taxes for the years ended December 31, 2017 and 2016 consist of the following:

The Company has net deferred tax assets resulting from a timing difference in recognition of depreciation and reserves for uncollectible accounts receivable and from net operating loss carryforwards.

At December 31, 2017, the Company had approximately 6,260,000 of federal net operating loss carryforwards that begin expiring in 2032, $4,600,000 of California net operating loss carryforwards that begin expiring in 2022, and $1,630,000 of Arizona net operating loss carryforwards that begin expiring in 2027.

The income tax provision (benefit) differs from the amount computed by applying the US federal statutory tax rate of 34% to net income (loss) before income taxes for the years ended December 31, 2017 and 2016 as a result of the following:

The significant components of deferred income tax assets as of December 31, 2017 and 2016 after applying enacted corporate income tax rates are as follows:

The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. All tax years from 2013 to 2016 are subject to examination