5. Income Taxes

As of December 31, 2014 the Company has a federal net operating loss (“NOL”) carryforward of approximately $12.4 million, the utilization of which is limited under IRS Code Section 382 due to changes in the ownership of the Company's stock. The Company also had a state net operating loss carryforward of approximately $5.4 million. The NOL carryforwards generated in the years 2005-2008 expire in 2025 thru 2028, and can be used at a rate of $344,000 per year based on Section 382 limitations. The NOL carryforwards generated in the years 2009 through 2014 expire in 2030 through 2033, and are not currently subject to Section 382 limitations.

Since it is not likely that deferred tax assets will be realized, no current tax benefit was recognized. Net deferred assets have been fully reserved.

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities, shown net in the deferred tax asset on the Consolidated Statements of Financial Condition, consisted of the following (dollar amounts in thousands):

	Year Ended
	December 31,
	2014		2013

Deferred tax assets:
Unrealized loss on investment	$	1,609	$	1,337
Net operating loss carryforward		4,650		4,560

Gross deferred tax asset	$	6,259	$	5,897

Deferred tax liabilities:
Deferred state income taxes	$	(185)	$	(164)

Gross deferred tax liabilities	$	(185)	$	(164)

Net deferred tax asset	$	6,074	$	5,733
Valuation reserve		(6,074)		(5,733)

	$	—	$	—

A reconciliation of income tax (benefit) with expected federal income tax expense (benefit) computed at the applicable federal tax rate of 35% is as follows (dollar amounts in thousands):

	Year Ended
	December 31,
	2014		2013

Expected income tax (benefit)	$	(382)	$	(905)
Increase/Decrease in income tax resulting from:
Other		41		(474)
Change in valuation reserve		341		1,379

Income tax expense	$	—	$	—