Note 9 - Income Taxes

12 Months Ended

Dec. 31, 2020

9.	Income Taxes

As a limited liability company, Gyrodyne is

not

subject to an entity level income tax but rather is treated as a partnership for tax purposes, with its items of income, gain, deduction, loss and credit being reported on the Company's information return, on Form

1065,

and allocated annually on Schedule K-

to its members pro rata.

The Bipartisan Budget Act of

2015

(the

“2015

Act”) changed this procedure for partnership tax audits and audit adjustments for partnership returns of large partnerships for fiscal years beginning after

December 31, 2017.

Pursuant to the

2015

Act, if any audit by the IRS of our income tax returns for any fiscal year beginning after

December 31, 2017

results in any adjustments, the IRS

may

collect any resulting taxes, including any applicable penalties and interest, directly from Gyrodyne. IRS tax audit assessments on tax years beginning

January 1, 2018

will require Gyrodyne to: a) bear any tax liability resulting from such audit, or b) elect to push out the tax audit adjustments to the respective shareholders once it has been calculated at the company level.

- 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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