INCOME TAXES

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company accounts for income taxes using ASC 740, “Income Taxes,” which is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized differently in the financial statements and the tax returns. The provision for income taxes consists of the following at December 31:

($ in thousands)	2025		2024		2023
Total provision (benefit):	$	1,088	$	976	$	2,323
Federal:
Current	110		26		1,371
Deferred	652		633		353
	762		659		1,724
State:
Current	85		260		584
Deferred	241		57		15
	326		317		599
Total	$	1,088	$	976	$	2,323

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities were as follows at December 31:

($ in thousands)	2025		2024
Deferred income tax assets:
Accrued expenses	$	199	$	319
Deferred revenues	614		644
Capitalization of costs	1,099		1,157
Pension adjustment	1,797		1,801
Stock grant expense	1,183		2,164
State deferred taxes	240		248
Book deferred gains	2,127		2,127
Joint venture allocations	130		524
Provision for additional capitalized costs	699		699
Interest rate swap	1,444		1,444
Other	490		74
Total deferred income tax assets	$	10,022	$	11,201
Deferred income tax liabilities:
Deferred gains	$	1,753	$	1,753
Depreciation	5,960		5,447
Cost of sales allocations	872		872
Joint venture allocations	7,249		7,729
Capitalized stock compensation	1,626		1,431
Straight line rent	165		231
Prepaid expenses	130		679
Interest rate swap	1,444		1,444
Other	672		674
Total deferred income tax liabilities	$	19,871	$	20,260
Net deferred taxes	$	(9,849)	$	(9,059)

Due to the nature of the Company's deferred tax assets, the Company believes they will be used through operations in future years and a valuation allowance is not necessary. As of December 31, 2025, the Company had tax-effected net operating loss carryforwards of $207,000 that can be carried forward indefinitely under federal law. As of December 31, 2025, the Company had tax-effected net operating loss carryforwards of $195,000 that are generally carried forward a maximum of 20 years.

The Company made $50,000 in estimated federal tax payments in 2025 and $0 in 2024. The Company made $380,000 in estimated California state tax payments in 2025 and $315,000 in 2024. The Company received tax refunds of $28,000 and $1,000 in 2025 and 2024, respectively.

The Company evaluates its tax positions for all income tax items based on their technical merits to determine whether each position satisfies the “more likely than not to be sustained upon examination” test. The tax benefits are then measured as the largest amount of benefit, determined on a cumulative basis, that is “more likely than not” to be realized upon ultimate settlement. As a result of this evaluation, the Company determined there were no uncertain tax positions that required recognition and measurement for the years ended December 31, 2025 and 2024 within the scope of ASC 740, "Income Taxes." Tax years from 2022 to 2024 and 2021 to 2024 remain available for examination by the Federal and California State taxing authorities, respectively.

In 2025, the Company’s effective tax rate varied from the statutory federal rate primarily due to permanent differences related to Section 162(m) limitations, state taxes and excess stock compensation expense. The Section 162(m) compensation deduction limitations occurred as a result of changes in tax law arising from the 2017 Tax Cuts and Jobs Act, which first impacted the Company in 2020. A reconciliation of the provision for income taxes, with the amount computed by applying the statutory Federal income tax rate of 21% in 2025, 2024 and 2023, is as follows for the years ended December 31: 

The income tax rate reconciliation was as follows at December 31:

	2025				2024				2023
($ in thousands)	Amount		Tax Rate		Amount		Tax Rate		Amount		Tax Rate
Income tax at statutory rate	$	250	21.0	%	$	770	21.0	%	$	1,195	21.0	%
State income taxes, net of federal benefit	257		21.6	%	256		7.0	%	578		10.2	%
Excess stock compensation expense (benefit)	104		8.7	%	6		0.2	%	(501)		(8.1)	%
Non-deductible compensation	608		53.6	%	181		4.9	%	1,302		22.9	%
Oil and mineral depletion	(109)		(9.1)	%	(129)		(3.5)	%	(130)		(2.3)	%
Permanent differences	5		0.4	%	(11)		(0.3)	%	9		0.2	%
Other	(27)		(2.3)	%	(97)		(2.7)	%	(130)		(2.3)	%
Tax provision	$	1,088	93.9	%	$	976	26.6	%	$	2,323	41.6	%