CorEnergy Infrastructure Trust, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Income Taxes (Tables)

Income Taxes (Tables)

9 Months Ended

Aug. 31, 2012

Components of deferred tax assets and liabilities

Components of the Company’s deferred tax assets and liabilities as of August 31, 2012 and November 30, 2011 are as follows:


	August 31, 2012			November 30, 2011
Deferred Tax Assets:
Organization costs	$	(18,220	)	$	(20,068	)
Net operating loss carry forwards		(4,893,990	)		(2,624,525	)
Cost recovery of leased assets		(57,038	)		(119,970	)
Asset acquisition costs		(88,065	)		—
AMT and state of Kansas credit		(196,197	)		(205,039	)

Sub-total	$	(5,253,510	)	$	(2,969,602	)

Deferred Tax Liabilities:
Basis reduction of investment in partnerships		10,155,864		$	2,244,914
Net unrealized gain on investment securities		2,485,706			697,152

Sub-total	$	12,641,570		$	2,942,066

Total net deferred tax liability (asset)	$	7,388,060		$	(27,536	)

Total income tax expense (benefit) differs from the amount computed by applying the federal statutory income tax rates net investment income and net realized and unrealized gains on investments

Total income tax expense differs from the amount computed by applying the federal statutory income tax rates of 35 percent for the three and nine months ended August 31, 2012 and 2011 to gain (loss) from operations and other income for the periods presented, as follows:


	For the Three Month Periods Ended						For the Nine Month Periods Ended
	August 31, 2012			August 31, 2011			August 31, 2012			August 31, 2011
Application of statutory income tax rate	$	2,722,054		$	427,310		$	7,055,010		$	2,190,982
State income taxes, net of federal tax benefit		155,106			69,602			479,459			164,011
Dividends received deduction Change in deferred tax valuation allowance		12 —			— —			(1,221 —	)		— (558,533	)
Other		(88,387	)		(14,872	)		(88,387	)		(23,432	)

Total income tax expense	$	2,788,785		$	482,040		$	7,444,861		$	1,773,028

Components of income tax expense

The components of income tax expense include the following for the periods presented:


	For the Three Month Periods Ended					For the Nine Month Periods Ended
	August 31, 2012			August 31, 2011		August 31, 2012			August 31, 2011
Current tax expense:
AMT expense (benefit)	$	(18,842	)	$	—	$	(8,842	)	$	200,000
State tax expense		38,107			—		38,107			—

Total current tax expense	$	19,265		$	—	$	29,265		$	200,000

Deferred tax expense:
Federal	$	2,601,535		$	448,469	$	6,965,804		$	1,463,476
State (net of federal tax benefit)		167,985			33,571		449,792			109,552

Total deferred tax expense		2,769,520			482,040		7,415,596			1,573,028

Total income tax expense	$	2,788,785		$	482,040	$	7,444,861		$	1,773,028

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:


	August 31, 2012			November 30, 2011
Aggregate cost for federal income tax purposes	$	47,508,824		$	65,471,208

Gross unrealized appreciation		30,269,676			8,307,122
Gross unrealized depreciation		(927,215	)		(4,883,958	)

Net unrealized appreciation	$	29,342,461		$	3,423,164

- Definition

Tabular disclosure of the federal tax basis of investment holdings. This item captures the aggregate cost of securities, aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost, aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value, net unrealized appreciation (depreciation), and an explanation of the differences between tax and book.

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