INCOME TAXES (Tables)

12 Months Ended

Sep. 30, 2017

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,
	2017			2016
United States	$	1,522,000		$	(360,000	)
Canada	(1,431,000		)	(3,977,000		)
	$	91,000		$	(4,337,000	)

Schedule of components of the income tax provision (benefit)

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



	Year ended September 30,
	2017			2016
Current (benefit) provision:
United States – Federal	$	—		$	—
United States – State
Before operating loss carryforwards	118,000			—
Benefit of operating loss carryforwards	(107,000		)	—
After operating loss carryforwards	11,000			—
	11,000			—
Canadian	(823,000		)	(651,000		)
Total current	(812,000		)	(651,000		)
Deferred (benefit) provision:
United States – Federal	—			—
United States – State	11,000			220,000
Canadian	(279,000		)	(291,000		)
Total deferred	(268,000		)	(71,000		)
	$	(1,080,000	)	$	(722,000	)

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 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,
	2017			2016
Tax provision (benefit) computed by applying statutory rate	$	32,000		$	(1,518,000	)
(Decrease) increase in the valuation allowance	(1,034,000		)	1,102,000
Uncertain tax positions - lapse of statute	(369,000		)	(173,000		)
Additional effect of the foreign tax provision on the total tax provision	254,000			(484,000		)
U.S. state tax provision, before changes in uncertain tax positions and net of federal benefit	22,000			314,000
Other	15,000			37,000
	$	(1,080,000	)	$	(722,000	)

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,
	2017			2016
Deferred income tax assets:
Foreign tax credit carryover	$	3,062,000		$	4,028,000
Alternative minimum tax credit carryover	460,000			460,000
U.S. federal net operating loss carryover	9,773,000			8,728,000
Tax basis of investment in land and residential real estate in excess of book basis	877,000			836,000
Property and equipment accumulated book depreciation and depletion in excess of tax under U.S. tax law	2,180,000			3,611,000
Liabilities accrued for books but not for tax under U.S. tax law	3,910,000			4,843,000
Liabilities accrued for books but not for tax under Canadian tax law	2,103,000			2,303,000
Other	1,091,000			1,108,000
Total gross deferred income tax assets	23,456,000			25,917,000
Less valuation allowance	(21,158,000		)	(23,410,000		)
Net deferred income tax assets	2,298,000			2,507,000
Deferred income tax liabilities:
Property and equipment accumulated tax depreciation and depletion in excess of book under Canadian tax law	(914,000		)	(1,012,000		)
Book basis of investment in land development partnerships in excess of tax basis	(1,289,000		)	(1,668,000		)
Other	(31,000		)	(31,000		)
Total deferred income tax liabilities	(2,234,000		)	(2,711,000		)
Net deferred income tax asset (liability)	$	64,000		$	(204,000	)
Reported as:
Deferred income tax assets	300,000			—
Deferred income tax liabilities	(236,000		)	(204,000		)
Net deferred income tax asset (liability)	$	64,000		$	(204,000	)

Schedule of changes in unrecognized tax benefits

Below are the changes in unrecognized tax benefits.



	Year ended September 30,
	2017			2016
Balance at beginning of year	$	377,000		$	582,000
Effect of tax positions taken in prior years	—			—
Accrued interest related to tax positions taken	11,000			20,000
Settlements	(10,000		)	—
Lapse of statute	(369,000		)	(173,000		)
Translation adjustments	(9,000		)	(52,000		)
Balance at end of year	$	—		$	377,000

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, 2017:



Jurisdiction	Fiscal Years Open
U.S. federal	2014 – 2016
Various U.S. states	2014 – 2016
Canada federal	2010 – 2016
Various Canadian provinces	2010 – 2016