INCOME TAXES

9 Months Ended

Jun. 30, 2013

INCOME TAXES

INCOME TAXES

7. INCOME TAXES

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

	Three months ended								Nine months ended
	June 30,								June 30,
	2013				2012				2013				2012
United States		$	(1,428,000	)		$	(939,000	)		$	(3,730,000	)		$	(5,241,000	)
Canada		254,000				(689,000		)		(4,470,000		)		837,000
		$	(1,174,000	)		$	(1,628,000	)		$	(8,200,000	)		$	(4,404,000	)

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

	Three months ended								Nine months ended
	June 30,								June 30,
	2013				2012				2013				2012
Current		$	(409,000	)		$	(420,000	)		$	(65,000	)		$	243,000
Deferred		460,000				158,000				(1,220,000		)		(18,000		)
		$	51,000			$	(262,000	)		$	(1,285,000	)		$	225,000

Barnwell’s effective consolidated income tax rate for the three and nine months ended June 30, 2013, after adjusting loss before income taxes for non-controlling interests, was (4%) and 16%, respectively, as compared to 16% and (5%) for the three and nine months ended June 30, 2012, 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.

Included in the income tax provision (benefit) for the three and nine months ended June 30, 2012 is a $93,000 benefit from the lapsing of the statute of limitations for uncertain tax positions related to Canadian income taxes. There is no such benefit included in the income tax provision (benefit) for the three and nine months ended June 30, 2013.

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