XML 43 R15.htm IDEA: XBRL DOCUMENT
v3.20.1

INCOME TAXES | 12 Months Ended
--- | ---
Dec. 31, 2019
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME T AXES As of December 31, 2019, 2018 and 2017 the Company recorded income tax provision expense of $128,000, $451,000, and an income tax provision benefit of $1,103,000, respectively. The decrease in the Company’s provision for income taxes as of December 31, 2019 is due to a decrease in income from the Company's Gamma Knife operations and the release of a valuation allowance related to the Company's Gamma Knife operations in Peru. The increase in the Company's provision for income taxes as of December 31, 2018 is due to income from the PBRT system and operations of the Company’s subsidiaries. The income tax provision benefit recognized as of December 31, 2017 was due to the Tax Act. 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 2018, 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 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 components of the provision (benefit) for income taxes as of December 31, 2019, 2018 and 2017 consist of the following:
| YEARS ENDED DECEMBER 31, |  |  |  |
| 2019 |  | 2018 |  | 2017
Current: |  |  |  |  |
Federal | $ | 443,000 |  |  | $ | 13,000 |  |  | $ | 55,000 |
State | 207,000 |  |  |  | 389,000 |  |  |  | 109,000 |
Foreign | 130,000 |  |  |  | — |  |  |  | — |
Total current | 780,000 |  |  |  | 402,000 |  |  |  | 164,000 |
Deferred: |  |  |  |  |
Federal | (311,000) |  |  | 259,000 |  |  | (1,335,000) |
State | (251,000) |  |  | (210,000) |  |  | 68,000 |
Foreign | (90,000) |  |  | — |  |  | — |
Total deferred | (652,000) |  |  | 49,000 |  |  | (1,267,000) |
| $ | 128,000 |  |  | $ | 451,000 |  |  | $ | (1,103,000) |
Significant components of the Company’s deferred tax liabilities and assets as of December 31, 2019 and 2018 are as follows:
| DECEMBER 31, |  |
| 2019 |  | 2018
Deferred tax liabilities: |  |  |
Property and equipment | $ | (3,112,000) |  |  | $ | (3,566,000) |
Total deferred tax liabilities | (3,112,000) |  |  | (3,566,000) |
Deferred tax assets: |  |  |
Net operating loss carryforwards | 117,000 |  |  | 80,000 |
Accruals and allowances | 248,000 |  |  | 275,000 |
Tax credits | 4,000 |  |  | 194,000 |
Other – net | 229,000 |  |  | 207,000 |
Capital loss carryover | 921,000 |  |  | 948,000 |
Total deferred tax assets | 1,519,000 |  |  | 1,704,000 |
Valuation allowance | (921,000) |  |  | (1,096,000) |
Deferred tax assets net of valuation allowance | 598,000 |  |  | 608,000 |
Net deferred tax liabilities | $ | (2,514,000) |  |  | $ | (2,958,000) |
These amounts are presented in the financial statements as follows:
| DECEMBER 31, |  |
| 2019 |  | 2018
Deferred income taxes (non-current) | $ | (2,514,000) |  |  | $ | (2,958,000) |
| $ | (2,514,000) |  |  | $ | (2,958,000) |
The (benefit) provision for income taxes differs from the amount computed by applying the U.S. federal statutory tax rate (21% in 2019 and 2018, and 34% in 2017) to income before taxes as follows:
| YEARS ENDED DECEMBER 31, |  |  |  |
| 2019 |  | 2018 |  | 2017
Computed expected federal income tax | $ | 167,000 |  |  | $ | 313,000 |  |  | $ | 279,000 |
State income taxes, net of federal benefit | (80,000) |  |  | 125,000 |  |  | 28,000 |
Non-deductible expenses | 29,000 |  |  | (12,000) |  |  | 41,000 |
Impact of US Tax Reform | — |  |  | — |  |  | (1,546,000) |
Return to Provision True-up | 39,000 |  |  | — |  |  | — |
Uncertain Tax Positions | 80,000 |  |  | — |  |  | — |
Change in valuation allowance | (175,000) |  |  | 34,000 |  |  | 180,000 |
Other | 68,000 |  |  | (9,000) |  |  | (85,000) |
| $ | 128,000 |  |  | $ | 451,000 |  |  | $ | (1,103,000) |
On December 22, 2017, the U.S. government enacted the Tax Act. The Tax Act makes broad and complex changes to the U.S. tax code 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 “Transition Tax”), 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 (“BEAT”) and a deduction for foreign-derived intangible income (“FDII”) and a new provision designed to tax global intangible low-taxed income (“GILTI”). In December 31, 2017, the SEC staff issued SAB 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 would be recorded to current tax expense in the quarter of 2018 when the analysis was complete. We included a provisional estimate in the financial statements for the period ended December 31, 2017, as our accounting for the Tax Act under ASC 740 was not completed. As of December 31, 2018, the Company completed its analysis of the income tax effects of the Tax Act and there was no material impact to the Company’s consolidated financial statements. Beginning in 2018, the GILTI provisions in the Tax Act require us to include, in our U.S. income tax return, foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. Per guidance issued by the FASB, companies can either account for deferred taxes related to GILTI or treat tax arising from GILTI as a period cost. Both are acceptable methods subject to an accounting policy election. On December 31, 2018, we finalized our policy and have elected to use the period cost method for GILTI. In 2019, the Company did not have any material adjustments for GILTI. The BEAT provisions in the Tax Act eliminate the deduction of certain base-erosion payments made to related foreign corporations, and impose a minimum base erosion anti-abuse tax if greater than regular tax. In 2019, our Company was not subject to BEAT as it did not meet the requirements to be subject to BEAT. At December 31, 2019, the Company exhausted the remainder of its net operating loss carryforward for federal income tax return purposes. The Company has net operating loss carryforwards for state income tax purposes of approximately $2,096,000 that begin to expire in 2029. The Company has net operating loss carryforwards for its international subsidiaries of approximately $210,000. Utilization of the net operating loss and credit carryforwards may be subject to an annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended (the “Code”), and similar state provisions. Any annual limitation may result in the expiration of net operating losses and credits before utilization. At December 31, 2019, the Company has a capital loss carryforward for federal income tax return purposes of approximately $3,762,000 which starts to expire in 2020. The Company has capital loss carryforwards for state income tax purposes of approximately $199,000 which starts to expire in 2020. 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 $175,000, increased by $34,000, and decreased by $303,000 for the tax years ended December 31, 2019, 2018, and 2017, respectively. During the year ended December 31, 2019, the Company released the valuation allowance related to GKPeru deferred tax assets, which resulted in an income tax benefit of $104,000. The Company concluded, based upon the preponderance of positive evidence (i.e. cumulative profit before tax adjusted for permanent items over the previous twelve quarters, a history of taxable income in recent periods, and the current forecast of income before taxes for GKPeru going forward) over negative evidence and the anticipated ability to use the deferred tax assets, that it was more likely than not that the deferred tax assets will be realized. If there are unfavorable changes to actual operating results or to projections of future income, the Company may determine that it is more likely than not such deferred tax assets may not be realizable. The tax return years 2015 through 2018 remain open to examination by the major domestic taxing jurisdictions to which the Company is subject. In 2019, the Company settled a New York State examination for tax years 2015 through 2017 with no material adjustments. Net operating losses generated on a tax return basis by the Company for calendar years 1999 through 2004, 2009, 2010, 2012, 2014, 2015, 2016, 2017, 2018 and 2019 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. As of December 31, 2019, the unrecognized tax benefit was $259,000 which, if recognized, will not affect the annual effective tax rate as these unrecognized tax benefits would increase deferred tax assets which would be subject to a full valuation allowance. A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows:
| YEARS ENDED DECEMBER 31, 2019 |  |  |  |
| 2019 |  | 2018 |  | 2017
Balance at beginning of year | $ | 87,000 |  |  | $ | — |  |  | $ | — |
Additions based on tax positions of prior years | 172,000 |  |  | 87,000 |  |  | — |
Balance at end of year | $ | 259,000 |  |  | $ | 87,000 |  |  | $ | — |
The Company's policy for deducting interest and penalties is to treat interest as interest expense and penalties as taxes. As of December 31, 2019, the Company had $6,000 accrued for the payment of penalties and zero interest related to unrecognized tax benefits. The Company does not expect any material changes to our uncertain tax positions within the next 12 months.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration