Note J – Taxes

The components of the provision for (benefit from) income taxes are as follows:

	Year Ended December 31,
	2018			2017

Current taxes:
Federal	$	32,000		$	55,000
State		137,000			9,000
Current taxes		169,000			64,000
Deferred taxes:
Federal	$	(201,000	)	$	(247,000	)
State		(160,000	)		86,000
Deferred taxes		(361,000	)		(161,000	)
Benefit from income taxes	$	(192,000	)	$	(97,000	)

A reconciliation of the tax provision calculated at the statutory federal income tax rate with amounts reported follows:

	Year Ended December 31,
	2018			2017

Income tax at the federal statutory rate	$	(128,000	)	$	149,000
State income tax, net of federal taxes		(55,000	)		23,000
Permanent differences and other		(9,000	)		26,000
Benefit of federal tax rate decrease		-			(295,000	)

Income tax (benefit) provision	$	(192,000	)	$	(97,000	)

Items which give rise to deferred tax assets and liabilities are as follows:

	December 31,
	2018			2017
Deferred tax asset:
Basis differences in unconsolidated entities, including advances and loans to those entities.	$	373,000		$	-
Excess of book depreciation over tax depreciation		-			40,000
		373,000			40,000

Deferred tax liability:
Basis differences in unconsolidated entities		-			(115,000	)
Deferred gain on disposal of gamma knife		(577,000	)		(524,000	)
Excess of tax depreciation over book depreciation		(108,000	)		-
Net effect of conversion from the accrual basis of accounting to the cash basis of accounting for tax purposes primarily related to accounts receivable, prepaid expense, deferred revenue, and accounts payable		(2,000	)		(76,000	)

Net deferred tax liability	$	(314,000	)	$	(675,000	)

The 2017 Tax Cuts and Jobs Act was signed into law on December 22, 2017. The 2017 Tax Cuts and Jobs Act significantly revises U.S. corporate income taxes by, among other things, lowering the statutory corporate tax rate from 35% to 21%. We recorded a provisional tax benefit for the impact of the 2017 Tax Cuts and Jobs Act of $295,000. This amount is comprised of the remeasurement of net deferred tax liabilities resulting from the permanent reduction in the U.S. statutory corporate tax rate to 21% from 35%.

The Company files income tax returns in the U.S. federal jurisdiction, the State of Maryland, and the State of New York. With few possible exceptions, the Company is no longer subject to U.S. or state income tax examinations by tax authorities for years before 2015.