Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes [Abstract]

Income Taxes

Note 11. Income Taxes

The components of the income tax provision for the years ended December 31, 2011 and 2010 are as follows:

	2011		2010
Current:
Federal	$	179,000	$	183,000
State		0		0
Deferred:
Federal		12,000		3,000
State		2,000		0
Total Federal and State Income Taxes	$	193,000	$	186,000

The provision for income taxes for the years ended December 31, 2011 and 2010 differs from the amount obtained by applying the U.S. federal income tax rate to pretax income due to the following:

	2011			2010
Computed "Expected" Federal Tax Expense	$	251,000		$	242,000
Increase (Decrease) in Taxes Resulting From:
State Income Taxes, net of Federal Benefit		12,000			16,000
Credits		(51,000	)		(53,000	)
Domestic Production Activities Deduction		(22,000	)		(21,000	)
Permanent Differences		3,000			2,000
Total Federal and State Income Taxes	$	193,000		$	186,000

The components of the net deferred tax liability consist of:

	2011			2010
Deferred Tax Assets:
Vacation Disallowance	$	24,000		$	26,000
Allowance for Doubtful Accounts		4,000			4,000
State Carryforward R&D Credit		3,000			3,000
Investment in Equity Method Investee		0			976,000
Valuation Allowance		0			(976,000	)
Total Deferred Tax Assets	$	31,000		$	33,000
Deferred Tax Liabilities:
Prepaid Expenses	$	26,000		$	29,000
Depreciation		60,000			45,000
Net Unrealized Gain on Investments		1,170,000			1,037,000
Total Deferred Tax Liabilities	$	1,256,000		$	1,111,000
Net Deferred Tax Liability	$	(1,225,000	)	$	(1,078,000	)

The Company is subject to the following material taxing jurisdictions: U.S. and Minnesota. The tax years that remain open to examination by the Internal Revenue Service are 2008 through 2011. The tax years that remain open to examination by the Minnesota Department of Revenue are 2007 through 2011. We have no accrued interest or penalties related to uncertain tax positions as of January 1, 2011 or December 31, 2011.