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Note 11 - Income Tax Benefit (As Restated) | 12 Months Ended
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Dec. 31, 2020
Notes to Financial Statements |
Income Tax Disclosure [Text Block] |
NOTE 11. | INCOME TAXES (As Restated)
The components of the income tax (provision) benefit for the years ended December 31, and the tax effects of temporary differences that give rise to deferred taxes at December 31, are as follows:
|  | December 31, |
|  | (As Restated) |  |  |  |  |
|  | 2020 |  |  | 2019 |
Income tax (provision) benefit: |  |  |  |  |  |  |  |
Current federal income tax expense (benefit) |  | $ | (44,486 | ) |  | $ | 513,201 |
Current state income tax expense (benefit) |  |  | (12,894 | ) |  |  | 161,781 |
Deferred federal income tax expense (benefit) |  |  | (1,579,511 | ) |  |  | 1,470,099 |
Deferred state income tax expense (benefit) |  |  | 2,224,254 |  |  |  | 463,432 |
Total Income Tax Benefit Before Valuation Allowance |  |  | 587,363 |  |  |  | 2,608,513 |
Valuation allowance |  |  | (587,363 | ) |  |  | (2,608,513 | )
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforward - all as of December 31, 2019 |  | $ | - |  |  | $ | 8,576,397 |
Net operating loss carryforward - federal as of December 31, 2020 |  |  | 5,278,699 |  |  |  | - |
Net operating loss carryforward - state as of December 31, 2020 |  |  | 1,833,257 |  |  |  | - |
2020 Tax credit carryforwards as of December 31, 2020 |  |  | 366,366 |  |  |  | - |
Intangibles |  |  | 47,731 |  |  |  | - |
Lease liabilities |  |  | 14,064,430 |  |  |  | - |
Premium adjustments and IBNR |  |  | 776,456 |  |  |  | - |
Unrealized loss on securities |  |  | 1,126,052 |  |  |  | - |
Valuation allowance |  |  | (7,230,229 | ) |  |  | (6,642,866 | )
Net Deferred Tax Assets |  | $ | 16,262,762 |  |  | $ | 1,933,531 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Property and equipment |  | $ | (1,754,929 | ) |  | $ | - |
Right of use assets |  |  | (14,311,642 | ) |  |  | - |
Deferred acquisition costs |  |  | (187,002 | ) |  |  | - |
Investment in unconsolidated subsidiaries |  |  | (9,189 | ) |  |  | - |
Unrealized loss on securities |  |  | - |  |  |  | (1,732,696 | )
Other |  |  | - |  |  |  | (200,835 | )
Total Deferred Tax Liabilities |  |  | (16,262,762 | ) |  |  | (1,933,531 | )
Net Deferred Tax Assets/Liabilities |  | $ | - |  |  | $ | - |
Deferred taxes in the consolidated balance sheet are classified based upon the related asset or liability creating the deferred tax. Deferred taxes not related to a specific asset or liability, are classified based upon the estimated period of reversal. The tax effects of temporary differences that give rise to deferred taxes are as follows: At December 31, 2020, we have available federal tax operating loss carry forwards of approximately $25.0 million. This amount takes into consideration the reduction of $1.3 million that was the result of an IRS audit which concluded late summer of 2019. Of the $25.0 million, $10.8 million arose in years beginning before 2018. Tax operating loss carry forwards generated in years prior to 2018 may be applied against future taxable income and expire in 2035 through 2037. Tax operating loss carryovers arising in years after 2017 may be carried forward indefinitely. Tax years open to examination by federal taxing authorities include 2017 forward. We have available state tax operating loss carry forwards of approximately $30.0 million, which are available to reduce future taxable income and expire at various times and amounts. The realization of deferred tax assets, including net operating loss carryforwards, is dependent on the generation of future taxable income sufficient to realize the tax deductions, carryforwards and credits. Valuation allowances on deferred tax assets are recognized if it is determined that it is more likely than not that the asset will not be realized. Because of the historical losses before income taxes, management’s ability to rely on future expectations of taxable income is reduced and, therefore, in management’s judgment, the realization of its deferred tax assets is not more likely than not. As a result of the IPO of Dream Finders Homes, Inc. on January 20, 2021 (see further discussion within Note 18), we expect the valuation allowance recorded related to our deferred tax assets as of December 31, 2020 to be reversed in the first quarter of 2021. The reconciliation of the income tax provision, calculated at the U.S. Corporate tax rate of 21%, to our effective income tax rate is as follows:
|  | For the Year Ended December 31, |
|  | (As Restated) |  |  |  |  |
|  | 2020 |  |  | 2019 |
Tax at statutory rate |  | $ | (280,069 | ) |  | $ | - |
Increase (decrease): |  |  | - |  |  |  |  |
Permanent differences |  |  | 5,422 |  |  |  | - |
State income tax expense (benefit), net of federal income taxes |  |  | (12,894 | ) |  |  | - |
Other |  |  | (299,822 | ) |  |  | - |
Less: valuation allowance |  |  | 587,363 |  |  |  | - |
Income tax benefit |  | $ | - |  |  | $ | - |
Uncertain Tax Positions We believe that there are no tax positions taken or expected to be taken that would significantly increase or decrease unrecognized tax benefits within 12 months of the reporting date. None of our federal or state income tax returns are currently under examination by the Internal Revenue Service or state authorities. However, 2017 and later tax years remain subject to examination by either the Internal Revenue Service or respective states.

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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 Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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