Annual report pursuant to Section 13 and 15(d)

Income tax

v3.24.1
Income tax
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income tax

Note 20 – Income tax

 

The provision (benefit) for income taxes for the years ended December 31, 2023 and 2022 consist of the following:

  

    2023     2022  
Current taxes from continuing operations:                
Federal   $ -     $ -  
State     8,160       6,768  
Total current     8,160       6,768  
                 
Taxes from discontinued operations(1):                
Federal   5,783       7,615  
State     5,783       7,615  
Tax provision from discontinued operations     13,943       14,838  
                 
Deferred tax asset:                
Federal     (273,400 )     107,700  
State     1,100       18,300  
Change in valuation     (272,300 )     (126,000 )
Total provision (benefit)   $ 13,943     $ 14,383  

 

(1) We sold our entire ownership interest in WCI on October 4, 2023 and as a result WCI is excluded from our continuing operations and presented as discontinued operations. See Note 3.

 

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, 2023, the Company had approximately $6,300,000 of federal net operating loss carryforwards, of which approximately $3,500,000 can be carried forward indefinitely, and the remaining $2,800,000 will begin to expire in 2034 and be fully expired by the year 2037. 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 the 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% in 2023 and 2022, respectively, to net income (loss) before income taxes for the years ended December 31, 2023 and 2022 as a result of the following:

  

    2023     2022  
Net income (loss) before income tax - continuing operations   $ 3,087,919     $ (605,342 )
US federal income tax rate     21 %     21 %
                 
Computed expected tax (benefit) - continuing operations     648,463       (127,122)  
                 
Net Income (loss) before income tax - discontinued operations (1)     83,682       252,800  
US federal income tax rate   21%       21%  
Computed expected tax (benefit) - discontinued operations   17,573       53,088  
                 
Total computed expected tax (benefit)   666,036       (74,034)  
Permanent differences and other     (393,736)       200,034  
Change in valuation     (272,300)       (126,000)  
Federal income tax provision   $ -     $ -  

 

(1) We sold our entire ownership interest in WCI on October 4, 2023 and as a result WCI is excluded from our continuing operations and presented as discontinued operations. See Note 3.

 

 

Mentor Capital, Inc.

Notes to Consolidated Financial Statements

December 31, 2023 and 2022

 

The significant components of deferred income tax assets as of December 31, 2023 and 2022 after applying enacted corporate income tax rates are as follows:

 Schedule of deferred tax assets 

    2023     2022  
Net Operating Losses carried forward from continuing operations   $ 1,913,000     $ 1,851,100  
Capital Losses carried forward     156,600       371,200  
Deferred - Other     -       62,500  
Valuation allowance     (2,069,600 )     (2,284,800 )
Deferred tax assets   $ -     $ -  

 

    2023     2022  
Net Operating Losses carried forward from discontinued operations (1)   $     -     $ 57,100  
Capital Losses carried forward     -       -  
Valuation allowance     -       (57,100)  
Deferred tax assets   $ -     $ -  

 

(1) We sold our entire ownership interest in WCI on October 4, 2023 and as a result WCI is excluded from our continuing operations and presented as discontinued operations. See Note 3.

 

The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. All tax years from 2019 to 2022 are subject to examination.