EZEN: Tax/accounting question?:
EZEN released an 8k yesterday stating they need to file an amended 10k because of clerical errors in Note 6 (Income Taxes).
The following paragraph from Note 6 says EZEN paid $47k for federal alternative minimum tax (AMT), so it seams to me they must have used their NOL carry-back to offset the amount of tax they would have owed on the $3.712M income before taxes they reported....and that's why they were only subject to the AMT.
Therefore it seams to me the issue may be that they should have realized a larger tax benefit from NOL carry backs and released more "valuation allowance"?
Does anyone agree or disagree that this is the underlying issue? This is income taxes, so maybe I'm relying too much on logic?
Management has determined at this time that it is more likely than not that the Company will recognize a portion of the benefits of its federal and state deferred tax assets. Accordingly, in 2005 a provision for current income tax of approximately $47 thousand relating primarily to federal alternative minimum taxes was recorded, which was offset by the release of a valuation allowance of approximately $138 thousand in the fourth quarter. As a result, a valuation allowance of approximately $31.9 million has been established at December 31, 2005, resulting in a net deferred tax asset of approximately $138 thousand. The amount of the deferred tax asset considered realizable could be reduced or increased in the near term if estimates of future taxable income during the carryforward period change.
P.S.: Thanks for the reply michael t, but if it were as you suggested, then EZEN's tax benefits would last an eternity.
"Our houses are such unwieldy property that we are often imprisoned rather than housed in them." - Henry David Thoreau, Walden: Economy, 1854
AI
