Entity information:
NOTE 14 - INCOME TAXES
 
The provision for income taxes benefit consists of the following:
 
For the years ended June 30,
 
2017
 
2016
 
Federal
 
 
 
 
 
 
 
Current tax expense
 
$
(34,000)
 
$
-
 
Deferred tax benefit
 
 
(81,000)
 
 
2,362,000
 
 
 
 
(115,000)
 
 
2,362,000
 
State
 
 
 
 
 
 
 
Current tax expense
 
 
(1,000)
 
 
-
 
Deferred tax benefit
 
 
(80,000)
 
 
375,000
 
 
 
 
(81,000)
 
 
375,000
 
 
 
 
 
 
 
 
 
Total income tax benefit
 
$
(196,000)
 
$
2,737,000
 
 
A reconciliation of the statutory federal income tax rate to the effective tax rate is as follows:
 
For the years ended June 30,
 
2017
 
 
2016
 
 
 
 
 
 
 
 
 
 
Statutory federal tax rate
 
 
34.0
%
 
 
34.0
%
State income taxes, net of federal tax benefit
 
 
2.6
%
 
 
3.1
%
Noncontrolling interest
 
 
0.0
%
 
 
-1.5
%
Other
 
 
7.8
%
 
 
-0.9
%
 
 
 
44.4
%
 
 
34.7
%
 
The components of the Company’s deferred tax assets and (liabilities) as of June 30, 2017 and 2016, are as follows:
 
 
 
2017
 
2016
 
Deferred tax assets (liabilities)
 
 
 
 
 
 
 
Net operating loss carryforward
 
$
11,207,000
 
$
8,070,000
 
Investment reserve
 
 
1,033,000
 
 
1,157,000
 
Basis difference in Justice
 
 
-
 
 
1,805,000
 
Other
 
 
1,563,000
 
 
1,123,000
 
 
 
 
13,803,000
 
 
12,155,000
 
Deferred tax liabilities
 
 
 
 
 
 
 
Basis difference in Justice
 
 
(1,625,000)
 
 
-
 
Unrealized gains on marketable securities
 
 
 
 
 
(260,000)
 
State taxes
 
 
(769,000)
 
 
(807,000)
 
Valuation allowance
 
 
(482,000)
 
 
-
 
 
 
 
(2,876,000)
 
 
(1,067,000)
 
Net deferred tax assets
 
$
10,927,000
 
$
11,088,000
 
 
As of June 30, 2017, the Company had net operating loss carryforwards of approximately $27,066,000 and $22,683,000 for federal and state purposes, respectively. These carryforwards expire in varying amount through 2031.
 
Assets and liabilities are established for uncertain tax positions taken or positions expected to be taken in income tax returns when such positions are judged to not meet the “more-likely-than-not” threshold based on the technical merits of the positions. As of June 30, 2017, it has been determined there are no uncertain tax positions likely to impact the Company.
 
The Partnership files tax returns as prescribed by the tax laws of the jurisdictions in which it operates and is subject to examination by federal, state and local jurisdictions, were applicable.
 
As of June 30, 2017, tax years beginning in fiscal 2011 remain open to examination by the major tax jurisdictions, and are subject to the statute of limitations.