Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income tax expense (benefit) consists of the following components:

	2017				2016

Current tax		$	751,377			$	209,576
Deferred tax			(2,258,393	)			456,605
Income tax expense (benefit)		$	(1,507,016	)		$	666,181

Income tax expense (benefit) reconciliation

The expense for income differed from the amounts computed by applying the applicable United States statutory rate of 35% before income taxes as a result of the following differences:

	2017			2016

Tax computed at statutory rate	$	1,157,141		$	742,863
Changes in taxes due to:
Non-controlling interest		(1,044	)		(100,891	)
Small company deduction		(591,074	)		(260,660	)
Dividend received deduction		(90,698	)		(92,731	)
Tax rate change		(1,488,646	)		-
Other		(492,695	)		377,600
Income tax expense (benefit)	$	(1,507,016	)	$	666,181

Major components that comprise the deferred tax liability

As a result of the TCJA described above in Note 1 - Summary of Significant Accounting Policies, the Company has recognized a decrease to their net deferred tax liability as of December 31, 2017 in the amount of $7,330,936. The Company has determined that no other changes are required to the deferred tax liability, and the current income tax expense is unaffected by this change in the law.

The following table summarizes the major components that comprise the deferred tax liability as reflected in the balance sheets:

	2017			2016

Investments	$	8,166,343		$	9,690,287
Cost of insurance acquired		1,349,941			2,543,589
Management/consulting fees		(27,202	)		(52,797	)
Future policy benefits		281,576			1,404,177
Deferred gain on sale of subsidiary		1,387,490			2,312,483
Other assets (liabilities)		59,095			13,245
Federal tax DAC		(220,839	)		(451,935	)
Deferred tax liability	$	10,996,404		$	15,459,049