Note 20 - Income Taxes
|12 Months Ended|
Dec. 31, 2017
|Notes to Financial Statements|
|Income Tax Disclosure [Text Block]||
2016,our deferred tax assets (“DTAs”) were approximately
$79.1million, respectively. The components of our deferred tax assets are summarized as follows:
Current accounting standards require a valuation allowance against
DTAs if, based on the weight of available evidence, it is more likely than
notthat some or all of the DTAs
notbe realized. Due to the uncertainty surrounding the realization of these DTAs in future tax returns, all of the DTAs have been fully offset by a valuation allowance at
December 31, 2017and
2016except the alternative minimum tax (“AMT”) credit carryforward amount described below.
In assessing the realizability of
DTAs, management considers whether it is more likely than
notthat some portion or all of the DTAs will
notbe realized. The ultimate realization of DTAs is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the DTAs are deductible, management believes it is more likely than
notthat the Company will
notrealize the benefits of these deductible differences or tax carryforwards as of
December 31, 2017except for the AMT credit carryforward.
The Tax Cuts and Jobs Act (the “Tax Act”) was signed into law on
December 22, 2017.The Tax Act reduces the U.S. federal corporate tax rate from
January 1, 2018.Consequently, we have recorded a decrease related to
$26.4million with a corresponding net adjustment to a valuation allowance of
$26.4million for the year ended
December 31, 2017.The impact of many provisions of the Tax Act lack clarity and is subject to interpretation until additional IRS guidance is issued. The ultimate impact of the Tax Act
maydiffer from the Company’s estimates due to changes in the interpretations and assumptions made as well as any forthcoming regulatory guidance.
The Tax Act repeals the AMT for corporations, and permits any existing AMT credit carryforwards to be used to reduce the regular tax obligation in
maycontinue using AMT credits to offset any regular income tax liability in years
50percent of remaining AMT credits refunded in each of the
2020tax years, and all remaining credits refunded in tax year
2021.This results in full realization of an existing AMT credit carryforward irrespective of future taxable income. Accordingly, the Company recorded AMT credit carryforwards of
$1.2million in other noncurrent assets in the consolidated balance sheet as of
December 31, 2017.
2016,we had U.S. net operating loss carryforwards of approximately
$193.3million, respectively. Of those amounts,
$15.3million relates to stock-based compensation tax deductions in excess of book compensation expense (“APIC NOLs”) as of
December 31, 2016,that will be credited to additional paid-in capital when such deductions reduce taxes payable as determined on a "with-and-without" basis. Accordingly, these APIC NOLs will reduce federal taxes payable if realized in future periods, but NOLs related to such benefits are
notincluded in the table above. As of
December 31, 2017,we adopted ASU
09and as such eliminated all APIC NOLs with a full offset to a valuation allowance.
2016,we also had state net operating loss carryforwards of approximately
$28.2million, respectively. The state net operating loss carryforwards will begin expiring in
2016,we had U.S. R&D credit carryforwards of approximately
U.S. net operating loss carryforwards or R&D credit carryforwards during
2016.The details of our U.S. net operating loss and federal R&D credit carryforward amounts and expiration dates are summarized as follows:
During the years ended
2015,Cardiosonix recorded losses for financial reporting purposes of
$11,000,respectively. As of
December 31, 2016,Cardiosonix had tax loss carryforwards in Israel of approximately
$7.7million. Under Israeli tax law, net operating loss carryforwards do
notexpire. Due to the uncertainty surrounding the realization of the related deferred tax assets in future tax returns and the Company’s intent to dissolve Cardiosonix in the near term, all of the deferred tax assets were fully offset by a valuation allowance at
December 31, 2016.Cardiosonix was legally dissolved in
September 2017and as such we eliminated all tax loss carryforwards with a full offset to a valuation allowance.
383of the IRC of
1986,as amended, the utilization of
U.S. net operating loss and R&D tax credit carryforwards
maybe limited under the change in stock ownership rules of the IRC. The Company completed a Section
notbelieve a Section
382ownership change has occurred since then that would impact utilization of the Company’s net operating loss and R&D tax credit carryforwards.
Reconciliations between the statutory federal income tax rate and our effective tax rate for continuing operations are as follows:
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.
Reference 1: http://www.xbrl.org/2003/role/presentationRef