XML 32 R17.htm IDEA: XBRL DOCUMENT
v3.20.1

Note 11 - Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2019
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | 11. Income Taxes Tax Reform act of 2017 On December 22, 2017, the Tax Cuts and Jobs Act was enacted into law and introduced significant changes to U.S. tax law. The Company reflected the impacts of changes in tax law to the financial statements including the federal income tax rate reduction from 35% to 21%; the new limitations on the tax deductibility of interest expense; the acceleration of business asset expensing; the repeal of the alternative minimum tax ("AMT"); the limitation on the use of net operating losses generated in future years; and the Global Intangible Low Taxed Income regime. Subsequent Events On March 27, 2020, the CARES Act was enacted into law and introduced changes to U.S. tax law including revised limitations on the tax deductibility of interest expense and the limitation on the use of net operating losses. The Company is reviewing the implications of these statutes to its 2020 financial statements. Due to an ownership change in the first quarter of 2020, the future utilization of certain post-change income tax attributes of Yunghong CTI Ltd , including net operating loss carryovers, are anticipated to be limited for U.S. income tax purposes. F- 17 Table of Contents The provision (benefit) for income taxes consists of the following:
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |
Current: |  |  |  |  |  |  |  |
Federal |  | $ | (845 | ) |  | $ | 165,000 |
State |  |  | - |  |  |  | - |
Foreign |  |  | 11,264 |  |  |  | (245,040 | )
Total Current |  |  | 10,420 |  |  |  | (80,040 | )
Deferred: |  |  |  |  |  |  |  |
Federal |  |  | 71,007 |  |  | $ | 317,640 |
State |  |  | 32,659 |  |  |  | 266,413 |
Foreign |  |  | 31,517 |  |  |  | 432,693 |
Total Deferred |  |  | 135,183 |  |  |  | 1,016,746 |
Provision (Benefit) for income taxes |  |  | 145,602 |  |  |  | 936,706 |
Income tax provision (benefit) related to continuing operations differ from the amounts computed by applying the statutory income tax rate of 21% to pretax loss as follows (in thousands):
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |
U.S. Federal provision (benefit) |  |  |  |  |  |
At Statutory Rate |  | $ | (1,503,581 | ) |  | $ | (589,875 | )
State Taxes |  |  | (412,909 | ) |  |  | (298,917 | )
Change in Valuation Allowance |  |  | 2,473,248 |  |  |  | 1,777,768 |
Nondeductible Expenses |  |  | 216,790 |  |  |  | 3,859 |
Foreign Taxes |  |  | (48,304 | ) |  |  | 45,552 |
Deconsolidation & Impairment |  |  | (373,448 | ) |  |  |  |
Other |  |  | (206,193 | ) |  |  | (1,681) |
Rounding |  |  | (1 | ) |  |  |  |
Total |  | $ | 145,602 |  |  | $ | 936,706 |
F- 18 Table of Contents Deferred Tax Assets and Liabilities Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets for federal and state income taxes are as follows):
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |
Deferred Tax Assets: |  |  |  |  |  |  |  |
Federal & State NOL Carryforward |  |  | 531,864 |  |  |  | 805,865 |
Foreign Tax Credit & Other Credits |  |  | 463,451 |  |  |  | 469,408 |
Reserves and Accruals |  |  | 320,961 |  |  |  | 320,783 |
Unicap 263A Adjustment |  |  | 76,294 |  |  |  | 112,199 |
Other DTA |  |  | 65,215 |  |  |  | 88,369 |
Foreign NOL Carryforward |  |  | 802,907 |  |  |  | 566,765 |
Deferred Interest Expense |  |  | 1,030,634 |  |  |  | 529,983 |
Deconsolidation & Impairment |  |  | 1,028,249 |  |  |  | - |
Total Gross DTA |  |  | 4,319,575 |  |  |  | 2,893,372 |
Less: Val. Allowance |  |  | (4,315,957 | ) |  |  | (2,409,474 | )
Total Deferred Tax Assets |  |  | 3,618 |  |  |  | 483,898 |
Deferred Tax Liabilities: |  |  |  |  |  |  |  |
Fixed Assets & Intangibles |  |  | (3,618 | ) |  |  | (257,113 | )
Deferred State Income Tax |  |  | - |  |  |  | (91,691 | )
Total Gross DTL |  |  | (3,618 | ) |  |  | (348,804 | )
Net Deferred Tax Assets |  |  | 00 |  |  |  | 135,094 |
Realization of our deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Due to the lack of earnings history, a valuation allowance has been recorded to reduce the deferred tax assets to its net realizable value. The valuation allowance increased by $2.5 million and increased by $1.8 million during the years ended December 31, 2019 and December 31, 2018, respectively. Net Operating Loss and Tax Credit Carryforwards As of December 31, 2019, we had a net operating loss carryforward for federal income tax purposes of approximately $2.7 million, which will begin to expire in 2024. We had a total state net operating loss carryforward of approximately $ 6.3 million, which will begin to expire in 2020. Approximately $2.0 million expired in 2019. We have foreign net operating loss carryforwards of approximately $2.7 million.

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration