Federal, State and Local Income Taxes:

9 Months Ended

Jan. 31, 2012

Income Tax Disclosure [Abstract]

Federal, State and Local Income Taxes:

Note 8-Federal, State and Local Income Taxes:

The Company computes its income tax provision in accordance with the requirements of the Income Tax Topic of the FASB’s ASC.

The provision for income taxes includes the following:

	For the Three Months Ended January 31,				For the Nine months Ended January 31,
($ in thousands)	2012		2011		2012			2011
Current tax expense/(benefit):
Federal	$	414	$	100	$	371		$	248
State and local		131		-		(84	)		-
		545		100		287			248
Deferred tax expense:
Federal		448		17,334		2,784			19,167
State and local		445		2,552		478			2,591
		893		19,886		3,262			21,758
Income tax provision:	$	1,438	$	19,986	$	3,549		$	22,006

Deferred income taxes are provided for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. The tax effect of temporary differences giving rise to the Company’s deferred tax asset and deferred tax liability are as follows:

($ in thousands)	As of January 31, 2012			As of April 30, 2011
Federal tax benefit (liability):
Net operating loss	$	-		$	2,226
Unrealized gains on securities held for sale		(42	)		(34	)
Operating lease exit obligation		102			211
Deferred professional fees		-			109
Deferred charges		194			192
Total federal tax benefits		254			2,704
State and local tax benefit:
Net operating loss		-			268
Other		124			50
Total state and local tax benefits		124			318
Deferred tax asset, short term	$	378		$	3,022
($ in thousands)	As of January 31, 2012			As of April 30, 2011
Federal tax liability (benefit):
Deferred gain on deconsolidation of EAM	$	17,679		$	17,679
Deferred non-cash postemployment compensation		(619	)		(619	)
Lease exit obligation		(102	)		(108	)
Depreciation and amortization		72			(364	)
Other		197			-
Total federal tax liability		17,227			16,588
State and local tax liability (benefit):
Deferred gain on deconsolidation of EAM		2,135			2,132
Deferred non-cash postemployment compensation		(75	)		(62	)
Lease exit obligation		(12	)		(25	)
Depreciation and amortization		9			(45	)
Deferred professional fees		(11	)		(14	)
Total state and local tax liability		2,046			1,986
Deferred tax liability, long-term	$	19,273		$	18,574

The Company’s net operating loss carryforward of approximately $6.4 million was fully utilized during the nine months ended January 31, 2012. The tax effect of temporary differences giving rise to the Company’s long-term deferred tax liability is primarily a result of the federal, state, and local taxes related to the $50,510,000 gain from deconsolidation of the Company’s asset management and mutual fund distribution subsidiaries, partially offset by the long-term tax benefit related to the non-cash post-employment compensation of $1,770,000 granted to VLI’s former employee and the tax benefits related to the Company’s exit lease obligation of $914,000 all recognized in fiscal 2011.

At the end of each interim reporting period, the Company estimates the effective income tax rate to apply for the full year. The Company uses the effective income tax rate determined to provide for income taxes on a year-to-date basis and reflect the tax effect of any tax law changes and certain other discrete events in the period in which they occur.

The annual effective tax rate may change during fiscal 2012 due to a number of factors including but not limited to an increase or decrease in the ratio of items that do not have tax consequences to pre-tax income, the Company’s geographic profit mix between tax jurisdictions, new tax laws, new interpretations of existing tax laws and rulings by and settlements with tax authorities.

The overall effective income tax rates, as a percentage of pre-tax income, during the nine months ended January 31, 2012 and 2011, were 37.82% and 38.71%, respectively.

The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory income tax rate to pretax income as a result of the following:

	For the Nine Months Ended January 31,
	2012			2011
U.S. statutory federal rate		35.00	%		35.00	%
Increase/(decrease) in tax rate from:
State and local income taxes, net of federal income tax benefit		2.73	%		2.95	%
Effect of dividends received deductions		-0.11	%		-
Alternative minimum tax - net operating loss limitation		-			0.96	%
Other, net		0.20	%		-0.20	%
Effective income tax rate		37.82	%		38.71	%

The Company believes that, as of January 31, 2012, there were no material uncertain tax positions that would require disclosure under GAAP.

The Company is included in the consolidated federal income tax return of the Parent. The Company has a tax sharing agreement which requires it to make tax payments to the Parent equal to the Company’s liability/(benefit) as if it filed a separate return.

The Company’s federal income tax returns (included in the Parent’s consolidated returns) and state and city tax returns for fiscal years 2009, 2010, and 2011 are subject to examination by the tax authorities, generally for three years after they were filed. The IRS and New York State tax authorities have recently concluded an examination for the years ended through April 30, 2008, which resulted in no changes that had any adverse effect on the Company’s financial statements. More recently, the IRS has concluded its examination of the Company’s federal income tax returns through the fiscal year 2010, which resulted in no changes that had any adverse effect on the Company’s financial statements.