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Income Taxes

12 Months Ended

Dec. 31, 2023

Income Taxes

Income Taxes

Note 10.Income Taxes

The Company’s net deferred tax assets at December 31, 2023 and 2022 is as follows:

​

​	​	​	​	​	​	​
​	​	December 31,
​		2023			2022
Deferred tax assets:	​	​	​	​	​	​
Capitalized start-up costs	​	$	877,440	​	$	579,901
Net operating loss carryforward		​	39,845	​	​	—
Total deferred tax assets		​	917,285		​	579,901
Valuation allowance		​	(861,760)		​	(211,887)
Net deferred tax assets	​	​	55,525		​	368,014
​	​	​	​	​	​	​
Deferred tax liabilities:	​	​	​	​	​	​
Accrued dividends on marketable securities held in Trust Account	​	​	(55,525)	​	​	(368,014)
Total deferred tax liabilities	​	​	(55,525)	​	​	(368,014)
Net deferred tax assets (liabilities)	​	$	—	​	$	—

​

The income tax provision for the years ended December 31, 2023 and 2022 consists of the following:

​

​	​	​	​	​	​	​
​	​	December 31,
​		2023			2022
Current expense (benefit)	​		​	​		​
Federal	​	$	1,319,280	​	$	362,282
State	​		—	​		—
Deferred expense (benefit)	​			​
Federal	​		(457,790)	​		17,037
State	​		(192,083)	​		(13,143)
Change in Valuation Allowance	​		649,873	​		(3,894)
Income tax provision	​	$	1,319,280	​	$	362,282

​

As of December 31, 2023 and 2022, the Company has federal net operating loss carryforwards of $0 and $0, respectively, that may be carried forward indefinitely. As of December 31, 2023 and 2022, the Company has gross state net operating loss carryforwards of $570,536 and $0, respectively, which begin to expire in 2041.

In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax assets, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the years ended December 31, 2023 and 2022, the change in the valuation allowance was $649,873 and $3,894, respectively.

A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2023 and 2022 is as follows:

​	​	​	​	​	​
​		December 31,
​	​	2023	​	2022	​
Statutory federal income tax rate	​	21.00	%	21.00	%
State taxes, net of federal tax benefit		(4.74)	%	(0.07)	%
Change in fair value of warrant liabilities		0.28	%	(18.95)	%
Change in valuation allowance		16.05	%	(0.02)	%
Income tax provision		32.59	%	1.96	​

​

The Company’s effective tax rates for the periods presented differ from the expected (statutory) rates due to changes in fair value in warrants and the recording of full valuation allowances on deferred tax assets.

The Company files income tax returns in the U.S. federal jurisdiction and is subject to examination by the various taxing authorities. The Company’s tax returns for the years ended December 31, 2023 and 2022 remain open and subject to examination. The Company considers Delaware to be a significant state tax jurisdiction.

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- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

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