INCOME TAXES

3 Months Ended

Dec. 31, 2012

INCOME TAXES

INCOME TAXES

7. INCOME TAXES

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

	Three months ended December 31,
		2012			2011
United States		$	(1,288,000	)	$	(1,330,000	)
Canada		(2,022,000		)	1,538,000
		$	(3,310,000	)	$	208,000

The components of the income tax (benefit) provision are as follows:

	Three months ended December 31,
		2012			2011
Current		$	558,000		$	558,000
Deferred		(1,122,000		)	(68,000		)
		$	(564,000	)	$	490,000

Barnwell’s effective consolidated income tax rate for the three months ended December 31, 2012 and 2011, after adjusting (loss) earnings before income taxes for non-controlling interests, was 17% and 236%, respectively.

Consolidated taxes do not bear a customary relationship to pretax (losses) earnings due primarily to the fact that Canadian income taxes are not sheltered by current period U.S. source losses, Canadian income taxes are not estimated to have a current or future benefit as foreign tax credits or deductions for U.S. tax purposes, and U.S. consolidated net operating losses are not estimated to have any future U.S. tax benefit prior to expiration.

The Canada Revenue Agency is currently examining the Company’s Canadian federal income tax returns for fiscal 2010 and 2011.