Annual report pursuant to Section 13 and 15(d)

Income tax

v3.23.1
Income tax
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income tax

Note 22 – Income tax

 

The provision (benefit) for income taxes for the years ended December 31, 2022 and 2021 consist of the following:

  

    2022     2021  
Current:                
Federal   $ -     $ -  
State     14,383       9,780  
Total current     14,383       9,780  
Deferred:                
Federal     107,700     (500,400 )
State    

18,300

     (150,000 )
Change in valuation     126,000     650,400  
Total provision (benefit)   $ 14,383     $ 9,780  

 

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, 2022, the Company had approximately $8,100,000 of federal net operating loss carryforwards of which approximately $4,600,000 can be carried forward indefinitely and the remaining balance will expire in between 2024 and 2025. The Company has a California net operating loss carryforward of approximately $6,500,000 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 income tax provision (benefit) differs from the amount computed by applying the U.S. federal statutory corporate income tax rate of 21% and 21% in 2022 and 2021 to net income (loss) before income taxes for the years ended December 31, 2022 and 2021 as a result of the following:

  

    2022     2021  
Net income (loss) before taxes   $ (352,542 )   $ (246,686 )
US federal income tax rate     21 %     21 %
                 
Computed expected tax provision (benefit)     (74,034 )     (51,804 )
Permanent differences and other    

200,034

       702,204  
Change in valuation     (126,000 )     (650,400 )
Federal income tax provision   $ -     $ -  

 

The significant components of deferred income tax assets as of December 31, 2022 and 2021 after applying enacted corporate income tax rates are as follows:

 Schedule of deferred tax assets 

    2022     2021  
Net Operating Losses carried forward   $ 1,908,200     $ 2,409,400  
Capital Losses carried forward     371,700       577,000  
Deferred officer bonus and other     62,000       2,300  
Valuation allowance     (2,341,900 )     (2,988,700 )
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 2018 to 2021 are subject to examination