INCOME TAXES (Tables)

12 Months Ended

Sep. 30, 2016

Components of income (loss) before income taxes, after adjusting the income (loss) for non-controlling interests

The components of earnings (loss) before income taxes, after adjusting the earnings (loss) for non-controlling interests, are as follows:



	Year ended September 30,
	2016			2015
United States	$	(360,000	)	$	1,011,000
Canada	(3,977,000		)	1,460,000
	$	(4,337,000	)	$	2,471,000

Schedule of components of the income tax provision (benefit)

The components of the income tax provision (benefit) related to the above income (loss) are as follows:



	Year ended September 30,
	2016			2015
Current (benefit) provision:
United States – Federal	$	—		$	—
United States – State	—			94,000
	—			94,000
Canadian	(651,000		)	1,529,000
Total current	(651,000		)	1,623,000
Deferred (benefit) provision:
United States - Federal	—			(90,000		)
United States - State	220,000			—
Canadian	(291,000		)	(325,000		)
Total deferred	(71,000		)	(415,000		)
	$	(722,000	)	$	1,208,000

Summary of reconciliation between the reported income tax provision (benefit) and the amount computed by multiplying the loss by the U.S. federal tax rate

A reconciliation between the reported income tax (benefit) provision and the amount computed by multiplying the earnings (loss) attributable to Barnwell before income taxes by the U.S. federal tax rate of 35% is as follows:



	Year ended September 30,
	2016			2015
Tax (benefit) provision computed by applying statutory rate	$	(1,518,000	)	$	865,000
Increase in the valuation allowance - U.S. federal and Canadian tax law	1,051,000			1,653,000
Additional effect of the foreign tax provision on the total tax provision	(484,000		)	(1,243,000		)
U.S. state deferred tax provision	220,000			—
Other	9,000			(67,000		)
	$	(722,000	)	$	1,208,000

Schedule of tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:



	September 30,
	2016			2015
Deferred income tax assets:
U.S. tax effect of deferred Canadian taxes	$	—		$	91,000
Foreign tax credit carryover	4,028,000			4,661,000
Alternative minimum tax credit carryover	460,000			460,000
U.S. federal net operating loss carryover	8,728,000			4,440,000
Tax basis of investment in land and residential real estate in excess of book basis	836,000			1,115,000
Property and equipment accumulated book depreciation and depletion in excess of tax under U.S. tax law	3,611,000			4,494,000
Liabilities accrued for books but not for tax under U.S. tax law	4,843,000			4,423,000
Liabilities accrued for books but not for tax under Canadian tax law	2,303,000			2,149,000
Other	1,108,000			746,000
Total gross deferred tax assets	25,917,000			22,579,000
Less valuation allowance	(23,410,000		)	(21,387,000		)
Net deferred income tax assets	2,507,000			1,192,000
Deferred income tax liabilities:
Property and equipment accumulated tax depreciation and depletion in excess of book under Canadian tax law	(1,012,000		)	(1,459,000		)
Book basis of investment in land development partnerships in excess of tax basis	(1,668,000		)	—
Other	(31,000		)	(4,000		)
Total deferred income tax liabilities	(2,711,000		)	(1,463,000		)
Net deferred income tax liability	$	(204,000	)	$	(271,000	)

Net deferred income tax liability is included in the Consolidated Balance Sheets as follows:



	September 30,
	2016			2015
Current deferred income tax asset
(included in other current assets)	$	—		$	178,000
Deferred income tax liability	(204,000		)	(449,000		)
Net deferred income tax liability	$	(204,000	)	$	(271,000	)

Schedule of changes in unrecognized tax benefits

Below are the changes in unrecognized tax benefits.



	Year ended September 30,
	2016			2015
Balance at beginning of year	$	582,000		$	660,000
Effect of tax positions taken in prior years	—			92,000
Accrued interest related to tax positions taken	20,000			38,000
Lapse of statute	(173,000		)	(174,000		)
Translation adjustments	(52,000		)	(34,000		)
Balance at end of year	$	377,000		$	582,000

Summary of tax years, by jurisdiction, that remain subject to examination by taxing authorities

Included below is a summary of the tax years, by jurisdiction, that remain subject to examination by taxing authorities at September 30, 2016:



Jurisdiction	Fiscal Years Open
U.S. federal	2013 – 2015
Various U.S. states	2013 – 2015
Canada federal	2009 – 2015
Various Canadian provinces	2009 – 2015