INCOME TAXES

12 Months Ended

Dec. 31, 2022

INCOME TAXES

INCOME TAXES

NOTE 14 — INCOME TAXES

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

	2022			2021
Tax Expense at Statutory Rate	$	3,019,701		$	2,133,953
Valuation Allowance		(4,513,493	)		(1,787,132	)
Non-Deductible Expenses and Other		5,534			3,501
PPP Loan Forgiveness		-			(350,322	)
State Taxes, Net of Federal Benefit		178,652			112,808
Income tax expense (benefit)	$	(1,309,606	)	$	112,808
Current	$	178,652		$	112,808
Deferred benefit		(1,488,258	)		-
Total	$	(1,309,606	)	$	112,808

Deferred income taxes are comprised of the following at December 31, 2022 and 2021:   

	2022			2021
Deferred tax assets (liabilities):
Inventories	$	46,557		$	39,433
Stock options and other		6,836			6,836
Contingencies and accruals		57,822			224,240
Property and equipment		(442,012	)		(297,984	)
Net operating loss carryforward		1,727,126			4,500,023
Goodwill and intangibles		91,929			40,945
Total deferred tax assets, net		1,488,258			4,513,493
Valuation allowance		-			(4,513,493	)
Net Deferred tax asset	$	1,488,258		$	-

A valuation allowance of $4,513,493 was recorded against the net deferred tax asset balance as of December 31, 2021. For the year ended December 31, 2022 a release of the valuation allowance of $4,513,493 is recorded. Management considers both positive and negative evidence that could effect the future realization of deferred tax assets. As of December 31, 2022, in part due to 3 years of cumulative pretax income, management has determined that there is sufficient evidence to conclude it is more likely than not that net deferred taxes of $1,488,258 are realizable and therefore reduced the valuation allowance accordingly.

As of December 31, 2022, the Company had approximately $8,224,409 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 2034 if not utilized.