DEFERRED INCOME TAXES - NET

9 Months Ended

Sep. 30, 2012

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE 10 – DEFERRED INCOME TAXES - NET

 The Company accounts for income taxes using the asset and liability approach, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. This method also requires the recognition of future tax benefits, such as net operating loss carry forwards and other tax credits. Deferred tax assets are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse, including those of discontinued operations that remain with the Company. Further, the Company evaluates the likelihood of realizing its deferred tax assets by estimating future sources of future taxable income and the impact of tax planning strategies.

Under the direction of the authoritative guidance issued by the Financial Accounting Standards Board pertaining to the accounting for income taxes, the Company recorded, in years prior to 2012, a partial valuation allowance against certain of its deferred tax assets, since the Company believed that it was more likely than not that, based on evidence available at that time, the entire net deferred tax asset would not be realized in the foreseeable future. However, as of September 30, 2012 the Company believes that, based upon the fact that it has been profitable for the year ended December 31, 2011, as well as the nine months ended September 30, 2012, combined with its projected future sources of taxable income, it is appropriate to reduce the valuation allowance by $2,358,000, thus increasing the total deferred tax assets recorded on the balance sheet. After this reduction and the expected utilization of certain deferred tax assets in the current year, there remains a full valuation allowance on certain state deferred tax assets. As a result of the decrease in the valuation allowance, the Company has recognized a tax benefit of $2,358,000 for the three- and nine-month periods ended September 30, 2012.