Federal Income Taxes

12 Months Ended

May 31, 2016

Income Tax Disclosure [Abstract]

Federal Income Taxes

Note 7. FEDERAL INCOME TAXES

Deferred taxes as of May 31 are as follows:

	2016			2015
Deferred tax asset:
Net operating loss carryforward	$	2,288,919		$	1,892,673
Stock compensation costs		25,346			21,632
Allowance for doubtful accounts		4,508			4,508
Other		24,001			13,429
Total deferred tax asset		2,342,774			1,932,242
Deferred tax liability:
Depreciation and amortization, tax reporting in excess of financial		(1,059,092	)		(153,005	)
Net deferred tax asset	$	1,283,682		$	1,779,237

In assessing the reliability of deferred tax assets, management considers the likelihood of whether it is more likely than not the net deferred tax asset will be realized. Based on this evaluation, management has determined that Greystone will be able to realize the full effect of the deferred tax asset and no valuation allowance has been recorded as of May 31, 2016 and 2015, respectively.

The net change in deferred taxes for the year ended May 31, 2016 and 2015 is as follows:

	2016			2015
Net operating loss carryforward	$	396,246		$	(44,121	)
Depreciation and amortization, tax reporting in excess of financial		(906,087	)		(372,843	)
Stock compensation costs		3,714			(14,696	)
Allowance for doubtful accounts		-			(12,532	)
Other		10,572			13,429
Total	$	(495,555	)	$	(430,763	)

The provision for income taxes at May 31 consists of the following:

	2016		2015
Current income tax – Federal and State	$	-	$	-
Deferred income tax provision		495,555		430,763
Provision for income taxes	$	495,555	$	430,763

Greystone’s provision for income taxes for the years ended May 31, 2016 and 2015 differs from the federal statutory rate as follows:

	2016			2015
Tax provision using statutory rates		34	%		34	%
Net operating loss expiration		6			7
Other		(3	)		1
Tax provision per financial statements		37	%		42	%

At May 31, 2016, Greystone had a net operating loss (NOL) for Federal income tax purposes from inception through May 31, 2005 of $17,242,600 expiring in fiscal year 2016 through fiscal year 2025 of which $2,025,000 is management’s estimate of the usable amount pursuant to Internal Revenue Code Section 382. The limitation is due to a change in control of Greystone during the fiscal year ended May 31, 2005. The utilization of NOL’s accumulated through fiscal year 2005 is limited to approximately $225,000 per year.

	NOL Carryforward		Year Expiring
Cumulative through May 31, 2005	$	2,025,000	2016 - 2025
Year ended May 31, 2006		237,364	2026
Year ended May 31, 2007		2,151,837	2027
Year ended May 31, 2011		746,484	2031
Year ended May 31, 2015		352,719	2035
Year Ended May 31, 2016		1,346,555	2036

Greystone does not have any uncertain tax positions that could result in a material change to its financial position.