Income Taxes

9 Months Ended

Mar. 31, 2013

Income Tax Disclosure

Income Tax Disclosure

14. Income Taxes

Deferred income taxes arise from temporary timing differences in the recognition of income and expenses for financial reporting and for tax purposes. The Company’s deferred tax assets consist entirely of the benefit from net operating loss (NOL) and capital loss carry forwards. The net operating loss carry forward, if not used, will expire in various years through 2033, and may be restricted, as per the Internal Revenue Code, due to changes in ownership. The Company’s deferred tax assets are offset by a valuation allowance due to the uncertainty of the realization of the net operating and capital loss carry forwards (capital loss carry forwards are approximately $432,000). Net operating and capital loss carry forwards may be further limited by other provisions of the tax laws.

The Company has estimated available net operating losses of approximately $8,178,000, which can be utilized to offset future earnings of the Company, subject to the limitations mentioned above, and to the preparation and filing of the delinquent tax returns. A valuation allowance is provided when it is more likely than not that some portion, or all, of the deferred tax asset will not be realized.

The Company has the following estimated carry forwards available at March 31, 2013, (State expiration is fifteen years earlier):

Operating and Capital Leases
Federal Expiration		Amount
2027		$24,000
2028		812,000
2029		262,000
2030		1,068,000
2031		3,897,000
2032		318,000
2033		1,797,000
	Total	$8,178,000