CorEnergy Infrastructure Trust, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Components of deferred tax assets and liabilities

Components of the Company’s deferred tax assets and liabilities as of December 31, 2015, and 2014, are as follows:



Deferred Tax Assets and Liabilities
	December 31, 2015			December 31, 2014
Deferred Tax Assets:
Net operating loss carryforwards	$	543,116		$	679,692
Net unrealized loss on investment securities	251,539			—
Cost recovery of leased and fixed assets	—			1,042,207
Loan Loss Provision	1,257,436			—
Other loss carryforwards	1,833,240			—
Sub-total	$	3,885,331		$	1,721,899
Deferred Tax Liabilities:
Basis reduction of investment in partnerships	$	(2,159,058	)	$	(2,842,332	)
Net unrealized gain on investment securities	—			(142,154		)
Cost recovery of leased and fixed assets	(119,297		)	—
Sub-total	(2,278,355		)	(2,984,486		)
Total net deferred tax asset (liability)	$	1,606,976		$	(1,262,587	)

Total income tax expense

Total income tax expense differs from the amount computed by applying the federal statutory income tax rate of 35 percent for the years ended December 31, 2015, 2014, and 2013, to income or loss from operations and other income and expense for the years presented, as follows:



Income Tax Expense (Benefit)
	For the Years Ended December 31,
	2015			2014			2013
Application of statutory income tax rate	$	3,630,325		$	2,375,903		$	2,608,151
State income taxes, net of federal tax (benefit)	(134,597		)	(47,731		)	273,174
Federal Tax Attributable to Income of Real Estate Investment Trust	(5,189,849		)	(2,607,207		)	(927,254		)
Other	(253,432		)	53,472			995,447
Total income tax expense (benefit)	$	(1,947,553	)	$	(225,563	)	$	2,949,518

Components of income tax expense

December 31, 2015, all of the income tax benefit presented above relates to the assets and activities held in the Company's TRSs. The components of income tax benefit include the following for the periods presented:



Components of Income Tax Expense (Benefit)
	For the Years Ended December 31,
	2015			2014			2013
Current tax expense
Federal	$	781,941		$	3,456,858		$	(7,139	)
State (net of federal tax benefit)	140,069			387,079			20,613
Total current tax expense	922,010			3,843,937			13,474
Deferred tax expense (benefit)
Federal	(2,594,897		)	(3,634,689		)	2,683,483
State (net of federal tax benefit)	(274,666		)	(434,811		)	252,561
Total deferred tax expense (benefit)	(2,869,563		)	(4,069,500		)	2,936,044
Total income tax expense (benefit), net	$	(1,947,553	)	$	(225,563	)	$	2,949,518

Aggregate cost of securities for federal income tax purposes and securities with unrealized appreciation and depreciation

As of December 31, 2014 the TRSs had a net operating loss of $894 thousand. For the year ended December 31, 2015, the TRSs incurred a total net operating loss of approximately $478 thousand, resulting in a total net operating loss of approximately $1.4 million as of December 31, 2015. The net operating loss may be carried forward for 20 years. If not utilized, this net operating loss will expire as follows: $90 thousand, $804 thousand, and $478 thousand in the years ending December 31, 2033, 2034, and 2035 respectively. The amount of deferred tax asset for net operating losses as of December 31, 2015, includes amounts for the year ended December 31, 2015. The aggregate cost of securities for federal income tax purposes and securities with unrealized appreciation and depreciation, were as follows:



Aggregate Cost of Securities for Income Tax Purposes (Unaudited)
	December 31, 2015			December 31, 2014
Aggregate cost for federal income tax purposes	$	4,750,252		$	4,218,986
Gross unrealized appreciation	5,133,908			7,436,696
Gross unrealized depreciation	(97,500		)
Net unrealized appreciation	$	5,036,408		$	7,436,696

Schedule of stock tax information

The per share characterization by quarter is reflected in the following table:



2015 Preferred Stock Tax Information (unaudited)
Record Date	Ex-Dividend Date	Payable Date	Total Distribution per Share		Total Ordinary Dividends		Qualified Dividends		Capital Gain Distributions		Nondividend Distributions
05/15/2015	05/13/2015	06/01/2015	$	0.6351	$	0.6351	$	0.0171	$	—	$	—
08/17/2015	08/13/2015	08/31/2015	0.4609		0.4609		0.0124		—		—
11/13/2015	11/11/2015	11/30/2015	0.4609		0.4609		0.0124		—		—
Total 2015 Distributions			$	1.5569	$	1.5569	$	0.0419	$	—	$	—

The per share characterization by quarter is reflected in the following tables:



2015 Common Stock Tax Information (unaudited)
Record Date	Ex-Dividend Date	Payable Date	Total Distribution per Share		Total Ordinary Dividends		Qualified Dividends		Capital Gain Distributions		Nondividend Distributions
02/13/2015	02/11/2015	02/27/2015	$	0.6500	$	0.4680	$	0.0126	$	—	$	0.1820
05/15/2015	05/13/2015	05/29/2015	0.6750		0.4860		0.0131		—		0.1890
08/17/2015	08/13/2015	08/31/2015	0.6750		0.4860		0.0131		—		0.1890
11/13/2015	11/10/2015	11/30/2015	0.7500		0.5400		0.0146		—		0.2100
Total 2015 Distributions			$	2.7500	$	1.9800	$	0.0534	$	—	$	0.7700



2014 Common Stock Tax Information (unaudited)
Record Date	Ex-Dividend Date	Payable Date	Total Distribution per Share		Total Ordinary Dividends		Qualified Dividends		Capital Gain Distributions		Nondividend Distributions
01/13/2014	01/09/2014	01/23/2014	$	0.6250	$	0.4640	$	0.2250	$	—	$	0.1610
05/14/2014	05/12/2014	05/22/2014	0.6450		0.4790		0.2320		—		0.1660
08/15/2014	08/13/2014	08/29/2014	0.6500		0.4825		0.2335		—		0.1675
11/14/2014	11/12/2014	11/28/2014	0.6500		0.4825		0.2335		—		0.1675
Total 2014 Distributions			$	2.5700	$	1.9080	$	0.9240	$	—	$	0.6620



2013 Common Stock Tax Information (unaudited)
Record Date	Ex-Dividend Date	Payable Date	Total Distribution per Share		Total Ordinary Dividends		Qualified Dividends		Capital Gain Distributions		Nondividend Distributions
03/08/2013	03/06/2013	03/19/2013	$	0.6250	$	0.6250	$	0.6250	$	—	$	—
06/28/2013	06/26/2013	07/05/2013	0.6250		0.1835		0.1835		—		0.4415
09/30/2013	09/26/2013	10/04/2013	0.6250		—		—		—		0.6250
Total 2013 Distributions			$	1.8750	$	0.8085	$	0.8085	$	—	$	1.0665