Income Taxes (Tables)
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9 Months Ended |
Sep. 30, 2017 |
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| Income Tax Disclosure [Abstract] |
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| Components of deferred tax assets and liabilities |
Components of the Company’s deferred tax assets and liabilities as of September 30, 2017 and December 31, 2016, are as follows:
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Deferred Tax Assets and Liabilities |
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September 30, 2017 |
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December 31, 2016 |
Deferred Tax Assets: |
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Net operating loss carryforwards |
$ |
1,735,011 |
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$ |
1,144,818 |
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Net unrealized loss on investment securities |
— |
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|
61,430 |
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Cost recovery of leased and fixed assets |
636,614 |
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|
739,502 |
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Loan Loss Provision |
385,180 |
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|
608,086 |
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Other loss carryforwards |
4,404,525 |
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3,187,181 |
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Sub-total |
$ |
7,161,330 |
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$ |
5,741,017 |
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Deferred Tax Liabilities: |
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Basis reduction of investment in partnerships |
$ |
(2,191,957 |
) |
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$ |
(2,158,746 |
) |
Net unrealized gain on investment securities |
(485,610 |
) |
|
— |
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Cost recovery of leased and fixed assets |
(2,591,152 |
) |
|
(1,823,982 |
) |
Sub-total |
$ |
(5,268,719 |
) |
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$ |
(3,982,728 |
) |
Total net deferred tax asset |
$ |
1,892,611 |
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$ |
1,758,289 |
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| Total income tax expense |
Total income tax expense (benefit) differs from the amount computed by applying the federal statutory income tax rate of 35 percent for the three and nine months ended September 30, 2017 and 2016 to income from operations and other income and expense for the periods presented, as follows:
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Income Tax Expense (Benefit) |
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For the Three Months Ended |
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For the Nine Months Ended |
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September 30, 2017 |
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September 30, 2016 |
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September 30, 2017 |
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September 30, 2016 |
Application of statutory income tax rate |
$ |
3,279,099 |
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$ |
3,400,018 |
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$ |
9,005,926 |
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$ |
7,425,354 |
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State income taxes, net of federal tax expense (benefit) |
8,784 |
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|
28,642 |
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(22,867 |
) |
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(29,384 |
) |
Federal Tax Attributable to Income of Real Estate Investment Trust |
(3,096,312 |
) |
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(2,945,508 |
) |
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(9,028,359 |
) |
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(7,757,506 |
) |
Total income tax expense (benefit) |
$ |
191,571 |
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$ |
483,152 |
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$ |
(45,300 |
) |
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$ |
(361,536 |
) |
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| Components of income tax expense |
The components of income tax expense (benefit) include the following for the periods presented:
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Components of Income Tax Expense (Benefit) |
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For the Three Months Ended |
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For the Nine Months Ended |
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September 30, 2017 |
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September 30, 2016 |
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September 30, 2017 |
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September 30, 2016 |
Current tax expense (benefit) |
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Federal |
$ |
58,303 |
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$ |
88,032 |
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$ |
79,865 |
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$ |
(350,698 |
) |
State (net of federal tax benefit) |
6,828 |
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|
7,093 |
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9,157 |
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(28,256 |
) |
Total current tax expense (benefit) |
$ |
65,131 |
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$ |
95,125 |
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$ |
89,022 |
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$ |
(378,954 |
) |
Deferred tax expense (benefit) |
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Federal |
$ |
124,484 |
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$ |
366,478 |
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$ |
(102,298 |
) |
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$ |
18,546 |
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State (net of federal tax benefit) |
1,956 |
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|
21,549 |
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(32,024 |
) |
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(1,128 |
) |
Total deferred tax expense (benefit) |
$ |
126,440 |
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$ |
388,027 |
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$ |
(134,322 |
) |
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$ |
17,418 |
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Total income tax expense (benefit), net |
$ |
191,571 |
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$ |
483,152 |
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|
$ |
(45,300 |
) |
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$ |
(361,536 |
) |
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| Aggregate cost of securities for federal income tax purposes and securities with unrealized appreciation and depreciation |
The aggregate cost of securities for federal income tax purposes and securities with unrealized appreciation and depreciation, were as follows:
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Aggregate Cost of Securities for Income Tax Purposes |
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September 30, 2017 |
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December 31, 2016 |
Aggregate cost for federal income tax purposes |
$ |
3,985,264 |
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$ |
4,327,077 |
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Gross unrealized appreciation |
6,904,503 |
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5,408,242 |
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Gross unrealized depreciation |
— |
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— |
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Net unrealized appreciation |
$ |
6,904,503 |
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$ |
5,408,242 |
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