Note 24 - Income Tax
|12 Months Ended|
Dec. 31, 2019
|Note 24 - Income Tax||
Note 24 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. Mentors subsidiary LLCs were disregarded entities for income, therefore, MCIP, Partner I, and Partner II, taxable income or loss is reported by their respective shareholders.
The provision (benefit) for income taxes for the years ended December 31, 2019 and 2018 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, 2019, the Company had approximately $9,330,000 of federal net operating loss carryforwards of which $4,579,000 can be carried forward indefinitely and the remaining balance will expire in between 2027 and 2036. The Company has a California net operating loss carryforward of approximately $7,700,000 that begins expiring in 2024.
The income tax provision (benefit) differs from the amount computed by applying the U.S. federal statutory tax rate of 21% in 2019 and 2018 to net income (loss) before income taxes for the years ended December 31, 2019 and 2018 as a result of the following:
The significant components of deferred income tax assets as of December 31, 2019 and 2018 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 2016 to 2019 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