Note 6 - Income Taxes

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Income Tax Disclosure [Text Block]

6. INCOME TAXES

The income tax provision from operations consists of the following:

Year ended December 31, (in thousands)	201 9		201 8
Current	$	1,991	$	284
Deferred		555		(280	)
Total	$	2,546	$	4

Following is a reconciliation of estimated income taxes at the statutory rate from operations to estimated tax expense (benefit) as reported:

Year ended December 31,	201 9			201 8
Statutory rate		21	%		21	%
State and local taxes, net of federal benefit		3.7			--
Equity compensation		(5.7	)		--
Other		(0.2	)		(21	%)
Effective rate		18.8	%		--	%

Net deferred tax assets consist of the following at

December 31:

(in thousands)	201 9			201 8
Deferred tax assets:
Unrealized loss on investments	$	582		$	475
Federal and state tax credits		--			294
Fixed assets		(370	)		(185	)
Other		95			171
Total deferred tax asset		307			755
Less valuation allowance		(582	)		(475	)
Net deferred tax (liability) asset	$	(275	)	$	280

On

December 22, 2017,

the U.S. federal government enacted the Tax Cuts and Jobs Act of

2017,

which, among other provisions, decreases the maximum federal corporate income tax rate from

35%

to

21%

beginning

January 1, 2018.

We had a net deferred tax liability of approximately

$0.3

million and a net deferred tax asset of

$0.3

million at

December 31, 2019

and

December 31, 2018,

respectively. The gross deferred tax asset has been offset by a valuation allowance in

2019

and

2018

of

$0.6

million and

$0.5

million, respectively, because the company believes that it is more likely than

not

that the amount will

not

be realized. We have maintained a valuation allowance on deferred tax assets resulting from unrealized capital losses as we are

not

able to conclude that is it more likely than

not

that these will be realized due to the unpredictability of future capital gains.

No

deferred taxes have been provided on temporary differences related to investments in foreign subsidiaries because these investments are considered to be permanent.

We have recognized tax benefits from all tax positions we have taken, and there has been

no

adjustment to any carry forwards (net operating loss or research and development credits) in the past

two

years. There were

no

unrecognized tax benefits as of

December 31, 2019

and

2018.

Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. There were

no

accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense recognized during the periods presented. We have determined we have

no

uncertain tax positions.

We file a consolidated U.S. federal income tax return for all subsidiaries in which our ownership equals or exceeds

80%,

as well as individual subsidiary returns in various states and foreign jurisdictions.