Income Taxes

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Note 13 – Income Taxes

The income tax provision reconciled to the tax computed at the statutory from continuing operations Federal rate follows:

	2018			2017
Tax Expense at Statutory Rate	$	150,855		$	625,603
Valuation Allowance		(152,043	)		(570,139	)
Non-Deductible Expenses and Other		1,189			(62,225	)
Tax Reform Revaluation, Net of Valuation Allowance		21,915			(39,037	)
State Taxes, Net of Federal Benefit		38,756			47,021
Income tax expense	$	60,672		$	1,223
Current	$	60,672		$	1,223
Deferred		-			-
Total	$	60,672		$	1,223

Deferred income taxes are comprised of the following:

	2018			2017
Deferred tax assets (liabilities):
Inventories	$	27,524		$	27,122
Stock options and other		57,019			58,050
Alternative Minimum Tax credit carryforward		-			1,703
Contingencies and accruals		18,882			81,907
Property and equipment		(97,897	)		(228,460	)
Net operating loss carryforward		7,251,479			7,376,283
Total deferred tax assets, net		7,257,007			7,316,605
Valuation allowance	$	(7,257,007	)	$	(7,316,605	)

As of December 31, 2018, the Company had $2,729,636 of net operating loss carry-forwards, related to the Superior Galleries acquisition which may be available to reduce taxable income in future years, subject to the applicable Internal Revenue Code Section 382 limitations. As of December 31, 2018, the Company had approximately $36,789,124 of net operating loss carry-forwards related to Superior Galleries’ post acquisition operating losses and other operating losses incurred by the Company’s other operations. These carry-forwards will expire, starting in 2026 if not utilized. As of December 31, 2018, the Company determined, based on consideration of all available evidence, including but not limited to historical, current and future anticipated financial results as well as applicable IRS limitation and expiration dates related to the Company’s net operating losses a full valuation allowance should be recorded for its net deferred tax assets.

The Tax Cuts and Jobs Act (the “Tax Act”), which was enacted December 22, 2017, reduced the corporate income tax rate effective January 1, 2018 from 35% to 21%. Among the other significant tax law changes that potentially affect the Company are the limitations on the deduction for interest incurred in 2018 or later of up to 70% of its taxable income for the carryforward year and the limitation of the utilization of post 2017 net operating loss carryforwards. At December 31, 2018, the Company has not completed its accounting for the tax effects of enactment of the Tax Act. The Company does not anticipate material changes to its income tax provision as a result of the passage of the Tax Act until pre tax law change net operating losses are fully utilized or expire in 2026. The Company has remeasured certain deferred federal tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. The deferred tax assets of the Company were reduced by $4,529,327 as a result of this remeasurement. This change was fully offset by the corresponding change in the valuation allowance. The Company has recorded $21,393 on noncurrent receivable related to alternative minimum tax credits which are refundable under the Act.