XML 70 R14.htm IDEA: XBRL DOCUMENT v2.4.1.9
Income Taxes
 12 Months Ended
Dec. 31, 2014
Income Tax Disclosure [Abstract]  
Income Taxes

7. Income Taxes:

 

Solitario's income tax benefit consists of the following as allocated between foreign and United States components:

 

(in thousands) 2014 2013
Current:    
  United States $   -    $      5 
  Foreign -    12 
Deferred:    
  United States -    (614)
  Foreign -    -  
Operating loss and credit carryovers:    
  United States -    421
  Foreign -        -  
Income tax benefit   $  -    $(176)

 

Consolidated loss before income taxes includes losses from foreign operations of $262,000 and $1,564,000 in 2014 and 2013, respectively.

 

See Note 1, “Business and Summary of Significant Accounting Policies” for a detail of the deferred taxes associated with the sale of marketable equity securities and the deferred taxes associated with unrealized gains and losses associated with other comprehensive income related to marketable equity securities.

 

The net deferred tax assets/liabilities in the December 31, 2014 and 2013 consolidated balance sheets include the following components:

 

(in thousands) 2014 2013
Deferred tax assets:    
  Loss carryovers $11,168  $9,852 
  Deferred Gain 2,376  2,335 
  Stock option compensation expense 350  932 
  Royalty 1,387  1,363 
  Earnings in Unconsolidated Subsidiary 865  798 
  Severance -   23 
  Other 105  107 
  Valuation allowance (12,431) (12,545)
Total deferred tax assets   3,820    2,865 
Deferred tax liabilities:    
  Unrealized gain on derivative securities 238  160 
  MH-LLC investment 2,305  1,168 
  Exploration costs 845  845 
  Unrealized gains on marketable equity securities 152  688 
  Capitalized interest 277  -  
  Other        3         4 
Total deferred tax liabilities 3,820  2,865 
     Net deferred tax liabilities $    -     $    -    

 

A reconciliation of expected federal income taxes on income (loss) from operations at statutory rates, with the benefit for income taxes is as follows:

 

(in thousands)   2014     2013  
Expected income tax benefit $(627) $(741)
Non-deductible foreign stock compensation expense 850  18 
Foreign tax rate differences (101)  31 
State income tax (146) 303
Change in valuation allowance (5)  233 
MH-LLC Investment 3  (16)
Permanent differences and other 26 (4)
Income tax benefit  $     -    $(176)

 

During 2014, the valuation allowance was increased primarily as a result of increases in Solitario US and foreign net operating loss carryforwards, for which it was more likely than not that the deferred tax benefit would not be realized. During 2013, the valuation allowance was increased primarily as a result of increases in Solitario foreign net operating loss carryforwards, for which it was more likely than not that the deferred tax benefit would not be realized, as well as a decrease in unrealized gains available to offset the future reversal of deferred tax assets.

 

At December 31, 2014, Solitario has unused US federal Net Operating Loss ("NOL") carryovers of $4,421,000 which begin expiring in 2031and unused US State NOL carryovers of $5,968,000 which begin expiring in 2030. Solitario has foreign loss carryforwards for which Solitario has provided a full valuation allowance and which expire over various periods from five years to no expiration depending on the foreign jurisdiction.

 

Solitario adopted the provisions ASC 740, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 requires that Solitario recognize in its consolidated financial statements, only those tax positions that are “more-likely-than-not” of being sustained as of the adoption date, based on the technical merits of the position. As a result of the implementation of ASC 740, Solitario performed a comprehensive review of its material tax positions in accordance with recognition and measurement standards established by ASC 740. The provisions of ASC 740 had no effect on Solitario’s financial position, cash flows or results of operations at December 31, 2014 or December 31, 2013, or for the years then ended as Solitario had no unrecognized tax benefits.

 

Solitario and its subsidiaries are subject to the following material taxing jurisdictions: United States Federal, State of Colorado, Mexico, Peru and Brazil. Solitario’s policy is to recognize interest and penalties related to uncertain tax benefits in income tax expense. Solitario has no accrued interest or penalties related to uncertain tax positions as of December 31, 2014, or December 31, 2013 or for the years then ended.