XML 25 R14.htm IDEA: XBRL DOCUMENT v3.5.0.2
Income Taxes
 6 Months Ended
Jun. 30, 2016
Income Tax Disclosure [Abstract]  
Income Taxes
(7) Income Taxes

 

Income taxes as a percentage of earnings before income taxes as reported in the consolidated financial statements were 34.1% for the three months ended June 30, 2016 compared to 34.2% for the three months ended June 30, 2015. Income taxes as a percentage of earnings before income taxes as reported in the consolidated financial statements were 33.2% for the six months ended June 30, 2016 compared to 34.3% for the six months ended June 30, 2015. The decrease in tax rates year over year is primarily due to an immaterial return to provision adjustment recorded in the first quarter of 2016.

 

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income of the appropriate character during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, taxable income available in carryback years, and tax planning strategies in making this assessment. With the exception of certain capital losses generated during 2013 and 2014, it is management’s opinion that the Company will more likely than not realize the benefits of these temporary differences as of June 30, 2016 and, therefore, only established a valuation reserve against the Company’s capital loss carry forward. Management arrived at this conclusion based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible. As indicated above, the Company generated approximately $219,000 of capital losses during 2013 and 2014 as a result of disposing of certain limited partnership interests. The capital losses will expire between 2019 and 2020, and it is management’s opinion that the Company will not more likely than not generate the capital gain income necessary to utilize the capital loss carry forwards before the capital losses expire. As such, the Company has established an $83,000 valuation reserve against its capital loss carry forward deferred tax asset.