|12 Months Ended|
Dec. 31, 2022
|Income Tax Disclosure [Abstract]|
14. INCOME TAXES
Income before tax expense for 2022 was $38,399. Of this amount $38,789 is from domestic sources and ($390) is from foreign sources. Prior to 2022 there were no amounts that were from foreign sources and all amounts in years prior to 2022 were from domestic sources.
Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their bases for income tax purposes.
As of December 31, 2022 and 2021, the Company had a net deferred tax asset of $6,634 and $10,702, respectively.
A summary of deferred tax assets and liabilities as follows:
The following table reconciles the provision for income taxes to the U.S. Federal statutory tax rate:
During 2022, the Company has recorded a deferred tax asset associated with net operating losses of its foreign subsidiary. Realization of the deferred tax asset is contingent on the foreign subsidiary generating future taxable income. Given the foreign subsidiary has recently initiated operations and does not yet have a history of sales, the Company has concluded that the deferred tax asset does not currently meet the more-likely-than-not threshold for realizability. Accordingly, a full valuation allowance has been recorded with respect to the net operating losses of the Company’s foreign subsidiary in the amount of $68 at December 31, 2022. There were no valuation allowances at December 31, 2021.
Of the total net deferred taxes at December 31, 2022 and 2021, $93 and $31, respectively, of the net deferred tax liabilities relate to non-controlling interests. These amounts are included in deferred tax and other liabilities on the Consolidated Statement of Financial Position, respectively.
In the normal course of business, the Company is subject to examination by federal, state, and local tax regulators. As of December 31, 2022, the Company’s U.S. federal income tax returns for the years 2019 through 2022 are open under the normal three-year statute of limitations and therefore subject to examination.
The impact from the Inflation Reduction Act of 2022 is incorporated in the 2022 financials. There was no material impact to the Company.
The guidance for accounting for uncertainty in income taxes prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company does not believe that it has any tax positions for which it is reasonably possible that the total amounts of unrecognized tax
benefits will significantly increase or decrease within the next twelve months. Furthermore, the Company does not have any material uncertain tax positions at December 31, 2022 and 2021.
No definition available.
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/disclosureRef