Note 26 - Income Tax
|12 Months Ended|
Dec. 31, 2018
|Note 26 - Income Tax||
Note 26 Income tax
On December 22, 2017, the Tax Cuts 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, MCIP, Partner I, Partner II, and CCH taxable income or loss is reported by their respective shareholders.
The provision (benefit) for income taxes for the years ended December 31, 2018 and 2017 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, 2018, the Company had approximately 6,184,000 of federal net operating loss carryforwards of which $440,724 can be carried forward indefinitely and the remaining balance will expire in between 2027 and 2037. The Company has a California net operating loss carryforward of approximately $3,231,000 that begins expiring in 2022, and an Arizona net operating loss carryforward of approximately $73,500 that expires in 2023.
The income tax provision (benefit) differs from the amount computed by applying the U.S. federal statutory tax rate of 21% in 2018 and 34% in 2017 to net income (loss) before income taxes for the years ended December 31, 2018 and 2017 as a result of the following:
The significant components of deferred income tax assets as of December 31, 2018 and 2017 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 2014 to 2017 are subject to examination
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.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef