XML 36 R23.htm IDEA: XBRL DOCUMENT

Federal Income Taxes

12 Months Ended

Jan. 31, 2018

Income Tax Disclosure [Abstract]

Federal Income Taxes

17. FEDERAL INCOME TAXES

The Trust and subsidiaries have income tax net operating loss carryforwards of approximately $4.8 million at January 31, 2018. 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.

Income taxes for the years ended January 31,
		2018				2017

Current income tax provision (benefit)			335,000				(227,000	)
Deferred income tax provision (benefit)			-				-
Net income tax expense (benefit)		$	335,000			$	(227,000	)

Total and net deferred income tax assets at January 31,
		2018				2017

Net operating loss carryforwards		$	2,763,000			$	4,040,000
Bad debt allowance			(22,000	)			(18,000	)
Accrued expenses			89,000				84,000
Syndications			5,179,000				5,179,000
Prepaid Insurance			30,000				30,000
Alternative minimum tax credit			91,000				91,000
Total deferred tax assets			8,130,000				9,406,000

Deferred income tax liability associated with book/tax differnces in hotel properties			(2,884,000	)			(2,459,000	)
Net deferred income tax asset			5,246,000				6,947,000
Valuation allowance			(5,246,000	)			(6,947,000	)
Net deferred income tax		$	-			$	-

A reconciliation of the differences between the effective and statutory income tax rates for years ended January 31, is as follows:

Income taxes for the years ended January 31,
		2018				2017

Current income tax provision (benefit)			341,000				(227,000	)
Deferred income tax provision (benefit)			-				-
Net income tax expense (benefit)		$	341,000			$	(227,000	)

A reconciliation of the differences between the effective and statutory income tax rates for years ended January 31, is as follows:

		2018
		Amount				Percent

Federal statutory rates		$	1,604,000				34	%
State income taxes			636,000				13	%
Changes in valuation allowance			(1,703,000	)			(36	)%
True-up to prior year returns			(240,000	)			(5	)%
Other			44,000				1	%
Effective rate		$	341,000				7	%

		2017
		Amount				Percent

Federal statutory rates		$	(878,000	)			(34	)%
State income taxes			(196,000	)			(8	)%
Changes in valuation allowance			1,445,000				56	%
True-up to prior year returns			(593,000	)			(23	)%
Other			(5,000	)			0	%
Effective rate		$	(227,000	)			(9	)%

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 $240,000 which were then offset by the release of valuation allowances. The Trust’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Trust had no material accrued interest or penalties at January 31, 2018 and 2017.