NOTE 9 - INCOME TAXES

Income Taxes:

The components of the provision for income taxes are as follows:


	Three months ended March 28, 2015

Current income tax (benefit)	$	(61,565	)
Deferred income tax expense		60,073

Total income tax benefit	$	(1,492	)

The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes are as follows:


	Three months ended March 28, 2015
	Amount			Impact on Rate
Income tax (benefit) at federal rate	$	(8,994	)		34.00	%

State tax benefit, net of Federal effect		(1,118	)		4.23	%

Permanent Differences:
Meals and entertainment		8,287			-31.32	%
Officer’s life insurance		334			-1.26	%

Total permanent differences		8,621			-32.58	%


Rounding		(1	)		0.00	%

Total income tax (benefit)	$	(1,492	)		5.65	%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred income taxes are as follows:


	March 28, 2015

Current deferred tax assets:
Warranty reserve	$	475,914
Repurchase reserve		80,158
Loan loss reserve		37,595
Allowance for doubtful accounts		7,072
Inventory reserve		9,318

Total current deferred tax asset		610,057


Non-current deferred tax assets:
Goodwill impairment		1,494,838

Total non-current deferred tax assets		1,494,838


Current deferred tax liabilities:
Prepaid insurance		(76,803	)

Total current deferred tax liabilities		(76,803	)


Non-current deferred tax liability:
Accelerated depreciation		(78,168	)
Sale of assets		8,468

Total non-current deferred tax liability		(69,700	)



Total deferred tax assets (liabilities) - net	$	1,958,392