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Income Taxes

6 Months Ended

Jun. 30, 2014

8. Income Taxes

Solitario accounts for income taxes in accordance with ASC 740, “Accounting for Income Taxes.” Under ASC 740, income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related to certain income and expenses recognized in different periods for financial and income tax reporting purposes. Deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses and tax credits that are available to offset future taxable income and income taxes, respectively. A valuation allowance is provided if it is more likely than not that some portion or all of the deferred tax assets will not be realized.

At June 30, 2014 and December 31, 2013, primarily as a result of the its net operating loss carry-forwards exceeding the built-in-gain in the value of Solitario's holdings of Kinross common stock recognized as other comprehensive income, Solitario has recorded a valuation allowance equal to the built-in gain on the value of its holdings of Kinross common stock.

The following table summarizes the changes in income taxes during the three and six months ended June 30, 2014 and 2013:

(in thousands)	Three months ended June 30,		Six months ended June 30,
	2014	2013	2014	2013
Income tax expense	$100	$ 193	$ -	$ 24
Deferred tax (expense) benefit on unrealized losses on marketable equity securities in other comprehensive income	$(100)	$ 449	$ -	$ 975

During the three months ended June 30, 2014, Solitario recorded $100,000 of deferred tax expense in the statement of operations to record a valuation allowance on the current year loss, as Solitario no longer expects to have gains in other comprehensive income for the year to realize this benefit against. In addition a deferred tax benefit of $100,000 was recorded in other comprehensive income, as Solitario no longer expects to have gains in other comprehensive income and is recording a valuation allowance on the unrealized losses occurring during the year.

- 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.

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