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Federal Income Taxes
 12 Months Ended
Jan. 31, 2020
Income Tax Disclosure [Abstract]  
Federal Income Taxes

19. FEDERAL INCOME TAXES

 

The Trust and subsidiaries have income tax net operating loss carryforwards of approximately $4.6 million at January 31, 2020. 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 amended the federal and state income tax returns for tax years 2017 and 2018, resulting in a recalculation of the net operating loss carry-forward. The impact of the amended returns are reflected in the below data.

 

Total and net deferred income tax assets at January 31,

 

 

    2020     2019  
             
Net operating loss carryforwards   $ 1,075,000     $ 705,000  
Bad debt allowance     4,000       3,000  
Accrued expenses     (4,000 )     2,000  
Syndications     2,923,000       2,923,000  
Prepaid Insurance     -       -  
Alternative minimum tax credit     51,000       51,000  
Total deferred tax asse     4,049,000       3,684,000  
                 
Deferred income tax liability associated with book/tax     (1,551,000 )     (1,570,000 )
Net deferred income tax asset     2,498,000       2,114,000  
Valuation allowance     (2,498,000 )     (2,114,000 )
    $ -     $ -  

 

Income taxes for the year ended January 31,

  

    2020     2019  
             
Current income tax provision (benefit)     (294,402 )     -  
Deferred income tax provision (benefit)     384,298       (3,132,000 )
Change in valuation allowance     (384,298 )     3,132,000  
Net income tax expense (benefit)     (294,402 )     -  

 

The differences between the statutory and effective tax rates are as follows for the year ended January 31, 2020:

  

    2020  
    Amount     Percent  
             
Federal statutory rates   $ (477,000 )     21 %
State income taxes     (120,000 )     5 %
Change in valuation allowance     384,300       -17 %
True-up to prior year returns     (81,700 )     4 %
Effective rate   $ (294,400 )      13 %

 

The differences between the statutory and effective tax rates are as follows for the year ended January 31, 2019:

 

    2019  
    Amount     Percent  
             
Federal statutory rates   $ 208,000       21 %
State income taxes     50,000       5 %
Change in valuation allowance     (3,132,000 )     -316 %
True-up to prior year returns     2,872,000       290 %
Other     2,000       0 %
Effective rate   $ -       0 %