Income Taxes (Tables)
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6 Months Ended |
Jun. 30, 2021 |
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| Income Tax Disclosure [Abstract] |
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| Components of Provision for Income Taxes |
Significant components of the tax expense (benefit) recognized in the accompanying consolidated statements of operations for the Three and Six Months ended June 30, 2021 and June 30, 2020 are as follows:
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Three Months Ended
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Three Months Ended
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Six Months Ended
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Six Months Ended
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June 30, 2021
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June 30, 2020
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June 30, 2021
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June 30, 2020
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Current tax benefit
|
|
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|
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|
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Federal
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$
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2,324,460
|
|
|
$
|
-
|
|
|
|
$
|
3,238,298
|
|
|
$
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(148,257
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)
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State
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480,942
|
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-
|
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670,019
|
|
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(30,675
|
)
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Total current tax benefit
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|
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2,805,402
|
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|
|
-
|
|
|
|
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3,908,317
|
|
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(178,932
|
)
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Deferred tax expense
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13,781
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-
|
|
|
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21,995
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|
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39,257
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Valuation allowance (expense)
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|
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(2,805,403
|
)
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|
|
-
|
|
|
|
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(3,913,048
|
)
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|
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139,675
|
|
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Income tax (reduction) benefit
|
|
$
|
13,780
|
|
|
$
|
-
|
|
|
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$
|
17,264
|
|
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$
|
-
|
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| Schedule of Reconciliation of Tax Provision with Expected Provision |
The reconciliation of the income tax computed at the combined federal and state statutory rate of 25.3% for the Three and Six Months ended June 30, 2021 and 2020 to the income tax benefit is as follows:
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Three Months Ended
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Three Months Ended
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Six Months Ended
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Six Months Ended
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June 30, 2021
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June 30, 2020
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June 30, 2021
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June 30, 2020
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Benefit on net loss
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|
$
|
2,818,684
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|
25.0%
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|
$
|
-
|
|
0.0%
|
|
|
$
|
3,928,774
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|
25.3%
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|
$
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(139,675
|
)
|
25.3%
|
|
|
Nondeductible expenses
|
|
|
499
|
|
0.0%
|
|
|
-
|
|
0.0%
|
|
|
|
1,538
|
|
0.0%
|
|
|
-
|
|
0.0%
|
|
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Valuation allowance (expense)
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|
|
(2,805,403
|
)
|
-24.9%
|
|
|
-
|
|
0.0%
|
|
|
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(3,913,048
|
)
|
-25.2%
|
|
|
139,675
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|
-25.3%
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Other items
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-
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0.0%
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-
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0.0%
|
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|
-
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0.0%
|
|
|
-
|
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0.0%
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|
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Tax benefit/effective rate
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|
$
|
13,780
|
|
0.1%
|
|
$
|
-
|
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(—)%
|
|
|
$
|
17,264
|
|
0.1%
|
|
$
|
-
|
|
(—)%
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| Components of Deferred Tax Assets and Liabilities |
The significant components of the Company’s deferred tax liabilities and assets as of June 30, 2021 and December 31, 2020 are as follows:
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As of June 30, 2021
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As of December 31, 2020
(Audited)
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Deferred tax liabilities:
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Tax expense for internally developed software
|
|
$
|
-
|
|
|
$
|
(1,814
|
)
|
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Tax depreciation in excess of book
|
|
|
-
|
|
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(2,916
|
)
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Total deferred tax liabilities
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|
|
-
|
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(4,730
|
)
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Deferred tax assets:
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Loss carryforwards
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5,262
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3,913,579
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Step up in basis at contribution to C-Corp
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516,683
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511,052
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Stock option expense
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124,876
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124,876
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Step up in basis - purchase of non-controlling interest
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47,627
|
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49,950
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|
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Allowance for credit losses
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33,466
|
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33,466
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Accrued liabilities
|
|
|
-
|
|
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20,573
|
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Total deferred tax asset
|
|
|
727,914
|
|
|
|
4,653,496
|
|
|
Valuation allowance
|
|
|
(745,178
|
)
|
|
|
(4,658,226
|
)
|
|
Net deferred tax asset
|
|
$
|
(17,264
|
)
|
|
$
|
-
|
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