Note 13. Income Taxes

The Company and its subsidiaries file a consolidated federal income tax return. Provisions for income taxes include deferred taxes for temporary differences in the bases of assets and liabilities for financial and tax purposes, resulting from the use of the liability method of accounting for income taxes. At June 30, 2013, the current deferred tax asset primarily consists of temporary differences in the deductibility of prepaid expenses, accrued liabilities and stock-based compensation, as well as unrealized gains on trading securities. The long-term deferred tax asset is composed primarily of unrealized losses and other than temporary impairments on available-for-sale securities and capital loss carryovers.

For federal income tax purposes at June 30, 2013, the Company has capital loss carryovers of approximately $1.6 million expiring in fiscal year 2018. The Company also has charitable contribution carryovers of approximately $80,000 expiring in fiscal year 2018.

A valuation allowance is provided when it is more likely than not that some portion of the deferred tax amount will not be realized. At June 30, 2013, a $27,286 valuation allowance was included related to the charitable contribution carryover. No valuation allowance was included at June 30, 2012, or 2011.

The reconciliation of income tax computed at the U.S. federal statutory rates to income tax expense is:


	Year ended June 30,
	2013		% of Pretax		2012		% of Pretax		2011		% of Pretax
Tax expense (benefit) at statutory rate	$	(60,856)		34.0%	$	849,792		34.0%	$	4,090,206		34.0%
Nondeductible membership dues		26,853		-15.0%		27,491		1.1%		27,929		0.2%
Nondeductible meals and entertainment		44,294		-24.7%		40,720		1.7%		42,959		0.4%
Other		4,933		-2.8%		50,950		2.0%		36,278		0.3%

Total tax expense	$	15,224		-8.5%	$	968,953		38.8%	$	4,197,372		34.9%

Components of total tax expense (benefit) are as follows:


	Year ended June 30,
	2013		2012			2011
Current tax expense	$	6,612	$	1,252,286		$	3,876,255
Deferred tax expense (benefit)		8,612		(283,333	)		321,117

Total tax expense	$	15,224	$	968,953		$	4,197,372

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company’s deferred assets and liabilities using the effective statutory tax rate (34.0 percent for 2013 and 2012) are as follows:


	Year ended June 30,
	2013			2012
Book/tax differences in the balance sheet
Trading securities	$	237,921		$	253,128
Prepaid expenses		(152,391	)		(201,124	)
Accumulated depreciation		85,208			60,837
Available-for-sale securities & equity method		(74,070	)		640,280
Accrued expenses		110,341			110,564
Stock-based compensation expense		117,372			114,129
Tax Carryovers
Capital loss carryover		549,029			-
Charitable contributions carryover		27,286			-
Valuation Allowance		(27,286	)		-

Net deferred tax asset	$	873,410		$	977,814