Income Tax Provision

9 Months Ended

Sep. 30, 2018

11. Income Tax Provision

The Partnership recognizes current income tax expense for federal, state, and local income taxes incurred by our taxable subsidiary, the Greens Hold Co, which owns all the MF Properties except the Suites on Paseo and Jade Park. The Partnership’s income tax expense fluctuates from period to period based on the timing of the taxable income. Deferred income tax expense is generally a function of the period’s temporary differences (i.e. depreciation, amortization of deferred finance costs, etc.), and the utilization of net operating losses generated in prior years. The Partnership’s deferred tax assets and liabilities are valued based on enacted tax rates as of the reporting date, including consideration of the Jobs and Tax Cuts Act of 2017.

The following represents income tax expense for the Greens Hold Co for the three and nine months ended September 30, 2018 and 2017:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2018			2017			2018			2017
Current income tax expense (benefit)	$	(809,805	)	$	(276,000	)	$	(837,805	)	$	2,484,047
Deferred income tax expense (benefit)		-			(9,000	)		34,000			(374,000	)
Total income tax expense (benefit)	$	(809,805	)	$	(285,000	)	$	(803,805	)	$	2,110,047

The Partnership evaluated whether it is more likely than not that its deferred income tax assets will be realizable and recorded a valuation allowance of approximately $221,000 against its deferred income tax assets as of September 30, 2018. There was no valuation allowance recorded as of December 31, 2017.