Reconciliation of the statutory federal income tax rates, 34% for the years ended December 31, 2017 and 2016, to the Company’s effective income tax rates follows:
| 2017 | 2016 | |||||||||||||||
| ($ in thousands) | ||||||||||||||||
| Percent of | Percent of | |||||||||||||||
| Amount of tax | Pre-tax Income | Amount of tax | Pre-tax Loss | |||||||||||||
| Expected tax (credit) | $ | (513 | ) | -34.0 | % | $ | 986 | 34.0 | % | |||||||
| State income taxes, net of | ||||||||||||||||
| federal tax benefits | (60 | ) | -4.0 | % | 116 | 4.0 | % | |||||||||
| Decrease in land inventory basis | - | 0.0 | % | (160 | ) | -6.0 | % | |||||||||
| Decrease in environmental | ||||||||||||||||
| liability | 7 | 0.0 | % | 2 | 0.0 | % | ||||||||||
| Increase (decrease) in valuation | ||||||||||||||||
| allowance | 623 | 41.0 | % | (944 | ) | -32.0 | % | |||||||||
| $ | 57 | 3.0 | % | $ | - | - | ||||||||||
The Company recognized an income tax expense of $57,000 during the year ended December 31, 2017 for the 2016 Alternative Minimum Tax on the 2016 gain recognized on the sales of real estate.
At December 31, 2017, the Company had an operating loss carryforward of approximately $67,793,000 which will expire at various dates through 2036.
| 2017 | 2016 | |||||||
| ($ in thousands) | ||||||||
| Deferred tax asset: | ||||||||
| Net operating loss carryover | $ | 16,948 | $ | 25,240 | ||||
| Expenses capitalized under IRC 263(a) | 37 | 56 | ||||||
| Environmental liability | - | 7 | ||||||
| Tax credits (AMT) | 57 | - | ||||||
| Valuation allowance | (17,042 | ) | (25,303 | ) | ||||
| Net deferred tax asset | $ | - | $ | - | ||||
The Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years before 2014.