Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

v3.19.3
Income Taxes
9 Months Ended
Sep. 30, 2019
Income Tax Disclosure [Abstract]  
INCOME TAXES
INCOME TAXES
Deferred income taxes reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting and tax purposes. Components of the Company's deferred tax assets and liabilities as of September 30, 2019 and December 31, 2018, are as follows:
Deferred Tax Assets and Liabilities
 
September 30, 2019
 
December 31, 2018
Deferred Tax Assets:
 
 
 
Deferred contract revenue
$
1,475,925

 
$
1,691,899

Net operating loss carryforwards
5,019,001

 
5,424,671

Loan loss provision

 
263,508

Basis reduction of investment in partnerships
250,359

 

Other
968,429

 
95,695

Sub-total
$
7,713,714

 
$
7,475,773

Deferred Tax Liabilities:
 
 
 
Cost recovery of leased and fixed assets
$
(2,799,360
)
 
$
(2,508,547
)
Other
(31,005
)
 
(19,023
)
Sub-total
$
(2,830,365
)
 
$
(2,527,570
)
Total net deferred tax asset
$
4,883,349

 
$
4,948,203


As of September 30, 2019, the total deferred tax assets and liabilities presented above relate to the Company's TRSs. The Company recognizes the tax benefits of uncertain tax positions only when the position is "more likely than not" to be sustained upon examination by the tax authorities based on the technical merits of the tax position. The Company's policy is to record interest and penalties on uncertain tax positions as part of tax expense. Tax years subsequent to the year ended December 31, 2015 remain open to examination by federal and state tax authorities.
Total income tax expense (benefit) differs from the amount computed by applying the federal statutory income tax rate of 21 percent for the three and nine months ended September 30, 2019 and 2018 to income from operations and other income and expense for the periods presented, as follows:
Income Tax Expense (Benefit)
 
For the Three Months Ended
 
For the Nine Months Ended
 
September 30, 2019
 
September 30, 2018
 
September 30, 2019
 
September 30, 2018
Application of statutory income tax rate
$
(4,097,584
)
 
$
1,459,638

 
$
(1,115,290
)
 
$
4,496,003

State income taxes, net of federal tax expense (benefit)
(19,632
)
 
(146,677
)
 
503,932

 
(411,696
)
Federal Tax Attributable to Income of Real Estate Investment Trust
3,984,180

 
(2,057,531
)
 
1,044,600

 
(5,876,965
)
Other
40,330

 
(2,097
)
 
(15,914
)
 
(13,684
)
Total income tax expense (benefit)
$
(92,706
)
 
$
(746,667
)
 
$
417,328

 
$
(1,806,342
)

The components of income tax expense (benefit) include the following for the periods presented:
Components of Income Tax Expense (Benefit)
 
For the Three Months Ended
 
For the Nine Months Ended
 
September 30, 2019
 
September 30, 2018
 
September 30, 2019
 
September 30, 2018
Current tax expense (benefit)
 
 
 
 
 
 
 
Federal
$

 
$
(6,643
)
 
$
216,093

 
$
(43,319
)
State (net of federal tax expense (benefit))
(1,270
)
 
(1,750
)
 
136,381

 
(11,408
)
Total current tax expense (benefit)
$
(1,270
)
 
$
(8,393
)
 
$
352,474

 
$
(54,727
)
Deferred tax expense (benefit)
 
 
 
 
 
 
 
Federal
$
(73,074
)
 
$
(593,347
)
 
$
(302,697
)
 
$
(1,351,327
)
State (net of federal tax expense (benefit))
(18,362
)
 
(144,927
)
 
367,551

 
(400,288
)
Total deferred tax expense (benefit)
$
(91,436
)
 
$
(738,274
)
 
$
64,854

 
$
(1,751,615
)
Total income tax expense (benefit), net
$
(92,706
)
 
$
(746,667
)
 
$
417,328

 
$
(1,806,342
)