Annual report pursuant to Section 13 and 15(d)

Income tax

v3.22.1
Income tax
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income tax

Note 21 – Income tax

 

The provision (benefit) for income taxes for the years ended December 31, 2021 and 2020 consist of the following:

 

    2021     2020  
Current:                
Federal   $ -     $ (1,500 )
State     9,780       11,550  
Total current     9,780       10,050  
Deferred:                
Federal     (500,400 )     (292,000 )
State     (150,000 )     (105,100 )
Change in valuation     650,400       397,100  
Total provision (benefit)   $ 9,780     $ 10,050  

 

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, 2021, the Company had approximately $8,700,000 of federal net operating loss carryforwards of which approximately $4,200,000 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 $6,504,000 that begins expiring in 2024. Mentor relocated to Texas in September 2020 and the Company’s ability to utilize the California net operating loss carryforwards is dependent on future generation of California taxable income. The Company has an Arizona net operating loss carry forward of approximately $48,000 that begins expiring in 2031.

 

 

Mentor Capital, Inc.

Notes to Consolidated Financial Statements

December 31, 2021 and 2020

 

The income tax provision (benefit) differs from the amount computed by applying the U.S. federal statutory tax rate of 21% in 2021 and 2020 to net income (loss) before income taxes for the years ended December 31, 2021 and 2020 as a result of the following:

 

    2021     2020  
Net income (loss) before taxes   $ (246,686 )   $ (667,491 )
US federal income tax rate     21 %     21 %
                 
Computed expected tax provision (benefit)     (51,804 )     (140,173 )
Permanent differences and other     702,204       537,273  
Change in valuation     (650,400 )     (397,100 )
Federal income tax provision   $ -     $ -  

 

The significant components of deferred income tax assets as of December 31, 2021 and 2020 after applying enacted corporate income tax rates are as follows:

 Schedule of deferred tax assets

    2021     2020  
Net Operating Losses carried forward   $ 2,409,400     $ 2,249,900  
Capital Losses carried forward    

577,000

          
Deferred officer bonus and other     2,300     88,400  
Valuation allowance     (2,988,700 )     (2,338,300 )
Deferred tax assets   $ -     $ -  

 

The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. All tax years from 2017 to 2020 are subject to examination