Note 15 - Federal Income Taxes

12 Months Ended

Jan. 31, 2012

Income Tax Disclosure [Text Block]

15.  FEDERAL INCOME TAXES

The Trust and subsidiaries have income tax net operating loss carryforwards of approximately $13.2 million at January 31, 2012.  In 2005, the Trust had an ownership change within the meaning of Internal Revenue Code Section 382.  However, the Trust determined that such ownership change would not have a material impact on the future use of the net operating losses. The Trust and subsidiaries have federal and state net operating loss carryforwards of approximately $13,174,000 and $4,893,000, respectively, having expiration dates ranging from fiscal 2013 to 2032.

Total and net deferred income tax assets at January 31,	2012			2011
Net operating loss carryforwards	$	4,844,000		$	4,855,000
Bad debt allowance		(11,000	)		5,000
Accrued expenses		1,018,000			90,000
Prepaid insurance		13,000			42,000
Alternative minimum tax credit		61,000			61,000
Total deferred income tax assets		5,925,000			5,053,000
Deferred income tax liability associated with book/tax differences in hotel properties		(2,731,000	)		(2,996,000	)
Net deferred income tax asset		3,194,000			2,057,000
Valuation allowance		(3,194,000	)		(2,057,000	)
Net deferred income tax asset	$	-		$	-

Income taxes for the year ended January 31,	2012		2011
Current income tax provision (benefit)	$	-	$	27,000
Deferred income tax benefit (provision)		-		-
Net income tax provision (benefit)	$	-	$	27,000

The differences between the statutory and effective tax rates are as follows for the year ended January 31, 2012:

Federal statutory rates	$	(428,000	)	(34	%)
State income taxes		(89,000	)	(7	%)
Change in valuation allowance		1,137,000		90	%
True-ups to prior year return		(620,000	)	(49	%)
Other		-		0	%
Effective rate	$	-		0	%

 The differences between the statutory and effective tax rates are as follows for the year ended January 31, 2011:

Federal statutory rates	$	(673,000	)	(34	%)
State income taxes		(140,000	)	(7	%)
Change in valuation allowance		468,000		24	%
True-ups to prior year return		270,000		14	%
Other		102,000		5	%
Effective rate	$	27,000		1	%

The valuation allowance increased by approximately $1,137,000 and $468,000 in the years ended January 31, 2012 and 2011, respectively.

The Trust and certain of its subsidiaries file income tax returns in the U.S. federal jurisdiction and several states.  Neither the Trust nor any of its subsidiaries are currently under audit examination by federal or state taxing authorities for any previous tax years.

The Trust's practice is to recognize interest and/or penalties related to income tax matters in income tax expense.  The Trust had no accrued interest or penalties at January 31, 2012 and 2011.