Annual report pursuant to Section 13 and 15(d)

Income Taxes

v2.4.0.6
Income Taxes
 12 Months Ended
Dec. 31, 2012
Notes  
Income Taxes

Note 12 - Income Taxes

 

Income taxes are provided for temporary differences between financial and tax bases of assets and liabilities. The following is a reconciliation of the amount of benefit that would result from applying the federal statutory rate to pretax loss with the benefit from income taxes for the years ended December 31, 2012 and 2011:

 

Rate Reconciliation

 

2012

2011

Federal income tax (benefit) at statutory rate (34%)

 $(1,114,000)

 $(265,000)

State income tax (benefit) , net of federal benefit

 12,000

 17,000

Foreign income tax benefit

 7,000

 8,000

Losses allocated to preferred members of GCE Mexico

 1,151,000

 356,000

Losses allocated to other subsidiaries

 22,000

 -  

Share-based compensation

 54,000

 77,000

Expiration of operating loss and research credit carryforwards

75,000

221,000

Other differences

 (2,000)

 3,000

Change in valuation allowance

(205,000)

(417,000)

Income tax benefit

 $-  

 $-  

 

The components of deferred tax assets and liabilities are as follows at December 31, 2012 and 2011, using a combined deferred income tax rate of 40%:

 

Components of Net Deferred Taxes

 

2012

2011

Net operating loss carryforward

$     6,839,000 

$     7,263,000 

Share-based compensation

            692,000 

            725,000 

Accrued compensation and other liabilities

            499,000 

            661,000 

Impairment of long lived assets

58,000

                           -

Other

               (2,000)

               (2,000)

Valuation allowance

       (8,086,000)

       (8,647,000)

Net deferred tax asset

$                      - 

$                      - 

 

 

The Company has available net operating losses of approximately $20,070,000 which can be utilized to offset future earnings of the Company. The utilization of the net operating losses are dependent upon the tax laws in effect at the time such losses can be utilized. The loss carryforwards expire between the years 2013 and 2032. Should the Company experience a significant change of ownership, the utilization of net operating losses could be reduced.

 

The Company and its subsidiaries file tax returns in the U.S. Federal jurisdiction and, in the state of California. The Company is no longer subject to U.S. federal tax examinations for tax years before and including December 31, 2008. The Company is no longer subject to examination by state tax authorities for tax years before and including December 31, 2007. During the years ended December 31, 2012 and 2011, the Company did not recognize interest and penalties.