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INCOME TAXES | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | Note 7 – Income Taxes As of December 31, 2017, 2016 and 2015 the Company recorded income tax provision benefit of $1,103,000, and income tax provision expense of $943,000 and $434,000, respectively. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act"). The Tax Act makes broad and complex changes to the U.S. tax code that affect fiscal 2017, including, but not limited to requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries that is payable over eight years. The Tax Act also establishes new tax laws that will affect 2018 and later years, including, but not limited to, a reduction of the U.S. federal corporate tax rate from 34% to 21%, a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries, net operating loss deduction limitations, a base erosion, anti-tax abuse tax and a deduction for foreign-derived intangible income and a new provision designed to tax global intangible low-taxed income. As these provisions do not apply until 2018 the Company continues to evaluate the impact of such provisions of the Tax Act. As a result of the Tax Act, the Company revalued its federal and state deferred tax liabilities based on a 21% tax rate as opposed to a 34% tax rate. The net effect of this change on the Company’s income tax provision for the year ended December 31, 2017 was a tax benefit of $1,546,000. The increase in the Company’s provision for income taxes as of December 31, 2016 is due to income from the PBRT system and operations of the Company’s subsidiaries. The increase in the Company’s provision for income taxes as of December 31, 2015 is due to income from operations of the Company’s subsidiaries. The loss incurred during the year ended December 31, 2015 on the write-down of the Company’s investment in equity securities is a capital loss which is treated as non-deducible expense for income tax provision purposes and as such, a full valuation allowance was recorded against this loss and the net impact to the provision was $0. The components of the provision for income taxes as of December 31, 2017, 2016 and 2015 consist of the following:
|  | YEARS ENDED DECEMBER 31, |
|  | 2017 |  | 2016 |  | 2015 |
Current: |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 55,000 |  | $ | 24,000 |  | $ | 35,000 |
State |  |  | 109,000 |  |  | 146,000 |  |  | 103,000 |
Total current |  |  | 164,000 |  |  | 170,000 |  |  | 138,000 |
Deferred: |  |  |  |  |  |  |  |  |  |
Federal |  |  | (1,335,000) |  |  | 680,000 |  |  | 353,000 |
State |  |  | 68,000 |  |  | 93,000 |  |  | (57,000) |
Total deferred |  |  | (1,267,000) |  |  | 773,000 |  |  | 296,000 |
|  | $ | (1,103,000) |  | $ | 943,000 |  | $ | 434,000 |
Significant components of the Company’s deferred tax liabilities and assets as of December 31, 2017 and 2016 are as follows:
|  | DECEMBER 31, |
|  | 2017 |  | 2016 |
Deferred tax liabilities: |  |  |  |  |  |  |
Property and equipment |  | $ | (5,009,000) |  | $ | (7,595,000) |
Total deferred tax liabilities |  |  | (5,009,000) |  |  | (7,595,000) |
Deferred tax assets: |  |  |  |  |  |  |
Net operating loss carryforwards |  |  | 1,421,000 |  |  | 2,783,000 |
Accruals and allowances |  |  | 157,000 |  |  | 193,000 |
Tax credits |  |  | 438,000 |  |  | 380,000 |
Other – net |  |  | 186,000 |  |  | 200,000 |
Capital loss carryover |  |  | 959,000 |  |  | 1,228,000 |
Total deferred tax assets |  |  | 3,161,000 |  |  | 4,784,000 |
Valuation allowance |  |  | (1,062,000) |  |  | (1,365,000) |
Deferred tax assets net of valuation allowance |  |  | 2,099,000 |  |  | 3,419,000 |
Net deferred tax liabilities |  | $ | (2,910,000) |  | $ | (4,176,000) |
These amounts are presented in the financial statements as follows:
|  | DECEMBER 31, |
|  | 2017 |  | 2016 |
Deferred income taxes (non-current) |  | $ | (2,910,000) |  | $ | (4,176,000) |
|  | $ | (2,910,000) |  | $ | (4,176,000) |
The (benefit) provision for income taxes differs from the amount computed by applying the U.S. federal statutory tax rate (34% in 2017, 2016 and 2015) to income before taxes as follows:
|  | YEARS ENDED DECEMBER 31, |
|  | 2017 |  | 2016 |  | 2015 |
Computed expected federal income tax |  | $ | 279,000 |  | $ | 637,000 |  | $ | (360,000) |
State income taxes, net of federal benefit |  |  | 28,000 |  |  | 169,000 |  |  | (55,000) |
Non-deductible expenses |  |  | 41,000 |  |  | 42,000 |  |  | 40,000 |
Impact of US Tax Reform |  |  | (1,546,000) |  |  | - |  |  | - |
Change in valuation allowance |  |  | 180,000 |  |  | 25,000 |  |  | 792,000 |
Other |  |  | (85,000) |  |  | 70,000 |  |  | 17,000 |
|  | $ | (1,103,000) |  | $ | 943,000 |  | $ | 434,000 |
On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740 Income taxes (“ASC 740”). In accordance with SAB 118 a company must reflect the income tax effects of those aspects of the tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. Additional work is necessary for a more detailed analysis of our deferred tax assets and liabilities. Any subsequent adjustment to these amounts will be recorded to current tax expense in the quarter of 2018 when the analysis is complete. During the year ended December 31, 2017, the Company did not recognize a provisional income amount for the transition tax, due to the fact the foreign subsidiaries have accumulated losses. The final effects of the Tax Act may differ from these provisional amounts, due to among other things, changes in interpretations of the Tax Act, any legislative action to address questions that arise because of the Tax Act, any changes in accounting standards for income taxes or related interpretations in response to the Tax Act, any updates or changes to the estimates utilized to calculate provisional amounts, or actions we may take as a result of the Tax Act. The associated accounting for the Tax Act is expected to be completed when our 2017 US corporate income tax return is filed in 2018. At December 31, 2017, the Company has a net operating loss carryforward for federal income tax return purposes of approximately $5,928,000 which expire between 2024 and 2034. The Company has net operating loss carryforwards for state income tax purposes of approximately $1,137,000 that begin to expire in 2029. The Company has net operating loss carryforwards for Peru and UK income tax purposes of approximately $370,000. Utilization of the domestic NOL and tax credit forwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by the Internal Revenue Code Section 382, as well as similar state provisions. In general, an “ownership change,” as defined by the code, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders or public groups. Any limitation may result in expiration of all or a portion of the NOL or tax credit carryforwards before utilization. At December 31, 2017, the Company has a capital loss carryforward for federal income tax return purposes of approximately $3,895,000 which starts to expire in 2019. The Company has capital loss carryforwards for state income tax purposes of approximately $177,000 which starts to expire in 2018. Due to the uncertainty that the Company will generate capital gains in future years to utilize its capital loss carryforward, a valuation allowance has been placed against the deferred tax asset. Due to uncertainty surrounding the realization of impairment losses, capital losses and foreign operating losses in future years, the Company has placed a valuation allowance against a portion of its net domestic and foreign deferred tax assets. The net valuation allowance decreased by $303,000, and increased $25,000, and $792,000 for the tax years ended December 31, 2017, 2016, and 2015, respectively. The tax return years 2012 through 2017 remain open to examination by the major domestic taxing jurisdictions to which the Company is subject. Net operating losses generated on a tax return basis by the Company for calendar years 1999 through 2004, 2009, 2010, 2012, 2014, 2015, 2016, and 2017 remain open to examination by the major domestic taxing jurisdictions. The Company has adopted accounting standards which prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in a company's income tax return, and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. Additionally, these accounting standards specify that tax positions for which the timing of the ultimate resolution is uncertain should be recognized as long-term liabilities. The Company has made no reclassifications between current taxes payable and long term taxes payable under this guidance. Also, the Company had no amounts of unrecognized tax benefits that, if recognized, would affect its effective income tax rate for the years ended December 31, 2017, 2016, and 2015. The Company’s policy for deducting interest and penalties is to treat interest as interest expense and penalties as taxes. As of December 31, 2017, the Company had no amount accrued for the payment of interest and penalties related to unrecognized tax benefits.

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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