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Income Taxes	9 Months Ended
Sep. 30, 2020
Income Taxes
Income Taxes	Note 17. Income Taxes During the three and nine months ended September 30, 2020 income tax expense is nil because of net operating loss and deferred tax assets related to the net operating loss carryovers utilized had been offset by a valuation allowance. The Company had established a 100% valuation allowance against its net deferred tax assets due to its history of pre-tax losses and the likelihood that the deferred tax assets will not be realized. During the nine months ended September 30, 2019, the Company recorded an income tax benefit of $0.5 million, $0.2 million resulting from losses of Grapevine which offset deferred tax liabilities that were recognized on its acquisition and a $0.4 million reduction of the valuation allowance on Ideanomics’ deferred tax assets in excess of those reversed to offset Ideanomics’ income. The reduction in valuation allowance resulted from Ideanomics’ acquisition of additional ownership interests in Grapevine which caused Grapevine to be included in a consolidated tax return with Ideanomics beginning June 30, 2019. This meant that $0.4 million of Ideanomics’ deferred tax assets could be utilized to offset Grapevine’s remaining deferred tax liabilities. This resulted in an effective tax rate of (4.43%). The effective tax rate for the nine months ended September 30, 2019 differs from the U.S. statutory tax rate primarily due to the effect of taxes on foreign earnings, non-deductible expenses and the reduction in the beginning of the year deferred tax valuation allowance. There was no identified unrecognized tax benefit as of September 30, 2020 and December 31, 2019.

Income Taxes

9 Months Ended

Sep. 30, 2020

Note 17. Income Taxes

During the three and nine months ended September 30, 2020 income tax expense is nil because of net operating loss and deferred tax assets related to the net operating loss carryovers utilized had been offset by a valuation allowance. The Company had established a 100% valuation allowance against its net deferred tax assets due to its history of pre-tax losses and the likelihood that the deferred tax assets will not be realized.

During the nine months ended September 30, 2019, the Company recorded an income tax benefit of $0.5 million, $0.2 million resulting from losses of Grapevine which offset deferred tax liabilities that were recognized on its acquisition and

a $0.4 million reduction of the valuation allowance on Ideanomics’ deferred tax assets in excess of those reversed to offset Ideanomics’ income. The reduction in valuation allowance resulted from Ideanomics’ acquisition of additional ownership interests in Grapevine which caused Grapevine to be included in a consolidated tax return with Ideanomics beginning June 30, 2019. This meant that $0.4 million of Ideanomics’ deferred tax assets could be utilized to offset Grapevine’s remaining deferred tax liabilities. This resulted in an effective tax rate of (4.43%). The effective tax rate for the nine months ended September 30, 2019 differs from the U.S. statutory tax rate primarily due to the effect of taxes on foreign earnings, non-deductible expenses and the reduction in the beginning of the year deferred tax valuation allowance.

There was no identified unrecognized tax benefit as of September 30, 2020 and December 31, 2019.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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