We account for income taxes under the provisions of ASC Topic 740, Income Taxes, which provides for an asset and liability approach for income taxes. Under this approach, deferred tax assets and liabilities are recognized based on anticipated future tax consequences, using currently enacted laws, attributable to temporary differences between the carrying value amounts of assets and liabilities for financial reporting purposes and the amounts calculated for income tax purposes.
The Company’s net deferred tax assets are as follows:
As of December 31, 2017 | ||||
| Deferred tax assets: | ||||
| Unrealized loss on marketable securities held in Trust Account | $ | 18,678 | ||
| Other | – | |||
| Total deferred tax assets | 18,678 | |||
| Valuation allowance | – | |||
| Deferred tax assets, net of allowance | $ | 18,678 | ||
The company believes that it is more likely than not that it will realize the deferred tax asset and therefore there is no valuation allowance.
The income tax provision (benefit) consists of the following:
For the Period From May 9, 2017 (Inception) to December 31, 2017 | ||||
| Federal | ||||
| Current | $ | 63,395 | ||
| Deferred | (13,647 | ) | ||
| State and Local | ||||
| Current | 22,327 | |||
| Deferred | (5,031 | ) | ||
| Income tax provision (benefit) | $ | 67,044 | ||
A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:
For the Period From May 9, 2017 (Inception) to December 31, 2017 | ||||
| Statutory federal income tax rate | 30.8% | |||
| State and local taxes, net of federal benefit | 6.8% | |||
| Permanent differences | 0.2% | |||
| Effect of federal rate change on deferred taxes | 3.6% | |||
| Income tax provision | 41.4% | |||