INCOME TAXES (Tables)

12 Months Ended

Sep. 30, 2023

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

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


	Year ended September 30,
	2023		2022
United States	$	(2,414,000)	$	739,000
Canada	1,400,000		5,121,000
	$	(1,014,000)	$	5,860,000

Schedule of components of the income tax provision (benefit)

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


	Year ended September 30,
	2023		2022
Current provision:
United States – Federal
Before operating loss carryforwards	$	—	$	727,000
Benefit of operating loss carryforwards	—		(665,000)
After operating loss carryforwards	—		62,000
United States – State
Before operating loss carryforwards	47,000		518,000
Benefit of operating loss carryforwards	—		(62,000)
After operating loss carryforwards	47,000		456,000
Canadian
Before operating loss carryforwards	274,000		510,000
Benefit of operating loss carryforwards	(244,000)		(510,000)
After operating loss carryforwards	30,000		—
Total current	77,000		518,000
Deferred benefit:

United States – State	(130,000)		(171,000)

Total deferred	(130,000)		(171,000)
	$	(53,000)	$	347,000

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) expense and the amount computed by multiplying the (loss) earnings attributable to Barnwell before income taxes by the U.S. federal tax rate of 21% is as follows:


	Year ended September 30,
	2023		2022
Tax (benefit) provision computed by applying statutory rate	$	(213,000)	$	1,231,000

Increase (decrease) in the valuation allowance	182,000		(1,450,000)

Additional effect of the foreign tax provision on the total tax provision	(4,000)		130,000
U.S. state income tax (benefit) provision, net of federal effect	(9,000)		330,000
U.S. state provision to tax return adjustments	(106,000)		(45,000)
Uncertain tax positions	—		62,000
Other	97,000		89,000
	$	(53,000)	$	347,000

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,
	2023		2022
Deferred income tax assets:
Foreign tax credit carryover under U.S. tax law	$	928,000	$	953,000

U.S. federal net operating loss carryover	9,406,000		8,258,000
U.S. state unitary net operating loss carryovers	1,177,000		1,117,000
Canadian net operating loss carryovers	1,025,000		877,000
Tax basis of investment in land in excess of book basis under U.S. tax law	25,000		26,000

Property and equipment accumulated book depreciation and depletion in excess of tax under U.S. tax law	275,000		568,000
Asset retirement obligation accrued for books but not for tax under U.S. tax law	1,084,000		959,000
Asset retirement obligation accrued for books but not for tax under Canadian tax law	2,461,000		2,120,000
Other liabilities accrued for books but not for tax under U.S. tax law	612,000		634,000
Foreign currency loss under U.S. tax law	68,000		102,000
Foreign currency loss under Canadian tax law	81,000		124,000
Other	116,000		278,000
Total gross deferred income tax assets	17,258,000		16,016,000
Less valuation allowance	(12,439,000)		(12,608,000)
Net deferred income tax assets	4,819,000		3,408,000
Deferred income tax liabilities:
Property and equipment accumulated tax depreciation and depletion in excess of book under Canadian tax law	(926,000)		(280,000)
Book basis of investment in land development partnerships in excess of tax basis under U.S. tax law	(133,000)		(545,000)
Book basis of investment in land development partnerships in excess of tax basis under U.S. state non-unitary tax law	(40,000)		(166,000)
U.S. oil and gas property and equipment accumulated tax depreciation and depletion in excess of book under U.S. tax law	(906,000)		(121,000)
U.S. oil and gas property and equipment accumulated tax depreciation and depletion in excess of book under U.S. state tax law	(19,000)		(23,000)
U.S. tax law impact of foreign branch deferred tax asset under Canadian tax law	(1,655,000)		(1,465,000)
Retirement plan asset accrued for books but not for tax under U.S. tax law	(939,000)		(711,000)
Other	(259,000)		(285,000)
Total deferred income tax liabilities	(4,877,000)		(3,596,000)
Net deferred income tax liability	$	(58,000)	$	(188,000)

Reported as:
Deferred income tax assets	—		—
Deferred income tax liabilities	(58,000)		(188,000)
Net deferred income tax liability	$	(58,000)	$	(188,000)

Schedule of unrecognized tax benefits

Below are the changes in unrecognized tax benefits.


	Year ended September 30,
	2023		2022
Balance at beginning of year	$	62,000	$	—
Effect of tax positions taken in prior years	—		60,000
Accrued interest related to tax positions taken	—		2,000
Balance at end of year	$	62,000	$	62,000

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, 2023:


Jurisdiction			Fiscal Years Open
U.S. federal			2020 – 2022
Various U.S. states			2020 – 2022
Canada federal			2016 – 2022
Various Canadian provinces			2016 – 2022