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Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Taxes  
Income Taxes

6. Income Taxes:

 

The net deferred income tax assets/liabilities in the December 31, 2023 and 2022 consolidated balance sheets include the following components:

 

(in thousands)

 

2023

 

 

2022

 

Deferred tax assets:

 

 

 

 

 

 

Loss carryovers

 

$12,403

 

 

$11,652

 

Mineral Property

 

 

1,669

 

 

 

1,669

 

Capitalized Exploration Costs

 

 

841

 

 

 

778

 

Stock option compensation expense

 

 

129

 

 

 

152

 

Unrealized loss on derivative securities

 

 

-

 

 

 

121

 

Other

 

 

175

 

 

 

65

 

Unrealized loss on short-term investments

 

 

100

 

 

 

20

 

Lease Liability

 

 

19

 

 

 

9

 

Valuation allowance

 

 

(15,301)

 

 

(14,309)

Total deferred tax assets

 

 

35

 

 

 

157

 

Deferred tax liabilities:

 

 

 

 

 

 

 

 

Unrealized gains on marketable equity securities

 

 

1

 

 

 

149

 

Lease Asset

 

 

21

 

 

 

8

 

Basis difference on fixed assets

 

 

13

 

 

 

-

 

Total deferred tax liabilities

 

 

35

 

 

 

157

 

Net deferred tax liabilities

 

$-

 

 

$-

 

The U.S. Federal Statutory Tax Rate for 2023 is 21%.  The reconciliation of the expected income tax expense (benefit) and the actual income tax expense (benefit) is as follows:

 

(in thousands)

 

2023

 

 

2022

 

Expected income tax benefit

 

$(788)

 

$(825)

Equity based compensation

 

 

(23)

 

 

238

 

Foreign tax rate differences

 

 

(19)

 

 

(3)

State income tax

 

 

(160)

 

 

(166)

Expiration of Capital Loss and Foreign Tax Credit Carryovers

 

 

-

 

 

 

18

 

Adjustment to Deferred Taxes

 

 

-

 

 

 

11

 

Foreign currency exchange

 

 

-

 

 

 

968

 

Change in valuation allowance

 

 

992

 

 

 

(251)

Change in Tax Rates

 

 

-

 

 

 

13

 

Permanent differences and other

 

 

(2)

 

 

(3)

Income tax (benefit) expense

 

$-

 

 

$-

 

 

Solitario has U.S. Federal net operating loss (NOL) carryovers of $25,943,000 as of December 31, 2023. Under the Tax Cuts and Jobs Act (“TCIA”) Federal NOL’s incurred in taxable years beginning in 2018 and later have an indefinite carryforward period, but the use of the NOL carryover is limited to 80% of taxable income in the subsequent year. Federal NOL carryovers incurred prior to 2018 expire after 20 years. Solitario has Federal NOL carryovers incurred prior to 2018 which begin expiring in 2027. Solitario has State NOL carryovers in Colorado, Montana, and Alaska of $25,996,000 which begin expiring in 2026. Solitario has Canadian and Peruvian NOL carryovers of $19,118,000 which begin expiring in 2026. Solitario has U.S. Federal and State capital loss carryovers of $468,000 which begin expiring in 2025. NOL carryovers and capital loss carryovers are a benefit to Solitario in the form of future tax savings and such carryovers are recorded as deferred tax assets, subject to a valuation allowance. Solitario has provided a valuation allowance of 100% of its net deferred tax assets due to the uncertainty of generating future profits that would allow for the realization of such deferred tax assets.