Note 10 – Income Taxes

The income tax provision for continuing operations reconciled to the tax computed at the statutory Federal rate follows:

	2016		2015
Tax Benefit at Statutory Rate	$	(1,345,685)	$	(781,497)
Valuation Allowance		1,344,094		779,308
Non-Deductible Expenses and Other		1,591		2,189
State Taxes, Net of Federal Benefit		47,916		31,802
Income tax expense	$	47,916	$	31,802

Current	$	47,916	$	31,802
Deferred		-		-
Total	$	47,916	$	31,802

Deferred income taxes are comprised of the following:

	2016		2015
Deferred tax assets (liabilities):
Inventories	$	104,190	$	103,909
Stock options and other		93,985		88,303
Alternative Minimum Tax credit carryforward		24,674		24,674
Contingencies and accruals		152,846		157,936
Property and equipment		(214,383)		(454,788)
Net operating loss carryforward		12,174,859		11,136,538
Goodwill and intangibles		-		(4,687)
Total deferred tax assets, net	$	12,336,171	$	11,051,886

Valuation allowance	$	(12,336,171)	$	(11,051,886)

As of December 31, 2016, the Company had $2,729,636 of net operating loss carry-forwards, related to the Superior Galleries acquisition which may be available to reduce taxable income in future years, subject to the applicable Internal Revenue Code Section 382 limitations. As of December 31, 2016, the Company had $38,055,994 of net operating loss carry-forwards related to Superior Galleries’ post acquisition operating losses and other operating losses incurred by the Company’s other operations. These carry-forwards will expire, starting in 2026 if not utilized. As of December 31, 2016 and 2015, the Company determined based on consideration of all available evidence, including but not limited to historical, current and future anticipated financial results as well as applicable IRS limitation and expiration dates related to the Company’s net operating losses a full valuation allowance should be recorded for its net deferred tax assets.