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Federal Income Taxes

12 Months Ended

Jan. 31, 2017

Income Tax Disclosure [Abstract]

Federal Income Taxes

17. FEDERAL INCOME TAXES

In 2005, the Trust had an ownership change within the meaning of Internal Revenue Code Section 382. However, the Trust determined that such ownership change would not have a material impact on the future use of the net operating losses.

The Trust and subsidiaries have federal net operating loss carryforwards of approximately $10.9 million at January 31, 2017, having expiration dates ranging from fiscal years 2019 to 2033.

Total and net deferred income tax assets at January 31,		2017				2016
Net operating loss carryforwards		$	4,040,000			$	2,795,000
Bad debt allowance			(18,000	)			(13,000	)
Accrued expenses			84,000				76,000
Syndications			5,179,000				5,128,000
Prepaid insurance			30,000				23,000
Alternative minimum tax credit			91,000				91,000
Total deferred income tax assets			9,406,000				8,100,000

Deferred income tax liability associated with book/tax differences in hotel properties			(2,459,000	)			(2,598,000	)
Net deferred income tax asset			6,947,000				5,502,000
Valuation allowance			(6,947,000	)			(5,502,000	)
Net deferred income tax asset		$	-			$	-

Income taxes for the year ended January 31,			2017				2016
Current income tax provision (benefit)			(227,000	)			96,000
Deferred income tax provision			-				-
Net income tax provision (benefit)			(227,000	)			96,000

The differences between the statutory and effective tax rates are as follows for the year ended January 31, 2017:

Federal statutory rates		$	(878,000	)			(34	%)
State income taxes			(196,000	)			(8	%)
Change in valuation allowance			1,445,000				56	%
True-ups to prior year return			(593,000	)			(23	%)
Other			(5,000	)			-	%
Effective rate		$	(227,000	)			(9	%)

The differences between the statutory and effective tax rates are as follows for the year ended January 31, 2016:

Federal statutory rates		$	(112,000	)			(34	%)
State income taxes			(25,000	)			(7	%)
Change in valuation allowance			1,270,000				67	%
True-ups to prior year return			(1,016,000	)			(33	%)
Other			(21,000	)			1	%
Effective rate		$	96,000				(6	%)

The true-ups to prior year return related primarily to the sale of syndication units in the Trust’s subsidiaries which are treated as equity transactions in the Trust’s financial statements but are taxed as capital gain transactions and total $75,000. The Trust’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Trust had no accrued interest or penalties at January 31, 2017 and 2016.