Concrete Pumping Holdings, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Income Taxes

Income Taxes

9 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 9 Income Taxes

The income tax provision (benefit) consists of the following:

	December 31, 2017
Current
Federal	$	267,780
State		-
Deferred
Federal		-
State		-
Income tax provision expense	$	267,780

The Company’s net deferred tax assets are as follows:

	December 31, 2017
Deferred tax asset
Net operating loss carryforward	$	-
Unrealized loss on securities		-
Startup/Organizational Costs		175,869
Total deferred tax assets		175,869
Valuation Allowance		(175,869)
Deferred tax asset, net of allowance	$	-

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax assets, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, Management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the period ended December 31, 2017, the valuation allowance was approximately $176,000.

A reconciliation of the statutory federal income tax rate (benefit) to the Company’s effective tax rate (benefit) is as follows:

	December 31, 2017
Statutory federal income tax rate		34.0	%
State taxes, net of federal tax benefit		0.0	%
Federal tax rate change		-218.2	%
Meals &; entertainment		0.0	%
Valuation allowance		-352.5	%
Income tax provision expense/(benefit)		-536.7	%

On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act ("Tax Reform Legislation"), which made significant changes to U.S. federal income tax law. The Corporation expects that certain aspects of the Tax Reform Legislation will positively impact the Corporation's future after-tax earnings primarily due to the lower federal statutory tax rate. Beginning January 1, 2018, the Corporation's U.S. income will be taxed at a 21 percent federal corporate rate. Further, we are required to recognize the effect of this rate change on our deferred tax assets and liabilities, and deferred tax asset valuation allowances in the period the tax rate change is enacted. We do not expect any material non-cash impact from this rate change, with adjustments to deferred tax balances offset by adjustments to deferred tax valuation allowances.