INCOME TAXES

9 Months Ended

Sep. 30, 2012

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

10.  INCOME TAXES:

The Company recorded a tax expense of approximately $25.8 million on a pre-tax loss from continuing operations of approximately $13.2 million for the nine month period ended September 30, 2012 based on the actual effective tax rate as of September 30, 2012.  The Company continues to estimate a range of possible outcomes due to the proportion of deferred tax expense from indefinite-lived intangibles over operating income.  Thus, the Company believes the actual effective rate best represents the estimated effective rate for the nine months ended September 30, 2012 in accordance with ASC 740-270, "Interim Reporting."

As of September 30, 2012, the Company continues to maintain a full valuation allowance for entities other than Reach Media for its net deferred tax assets, but excludes deferred tax liabilities related to indefinite-lived intangibles.  In accordance with ASC 740, "Accounting for Income Taxes", the Company continually assesses the adequacy of the valuation allowance by assessing the likely future tax consequences of events that have been realized in the Company's financial statements or tax returns, tax planning strategies, and future profitability.  As of September 30, 2012, the Company does not believe it is more likely than not that the deferred tax assets will be realized.  As part of the assessment, the Company has not included the deferred tax liability related to indefinite-lived intangible assets as a source of future taxable income to support realization of the deferred tax assets.

During 2011, the consolidation of TV One included an adjustment to the deferred tax liability related to the partnership investment in TV One. The Company evaluated the deferred tax liability and concluded that a portion will not reverse within the requisite period since it relates to indefinite-lived assets and cannot be offset against deferred tax assets. This item generated a tax expense of $402,000 for the nine months ended September 30, 2012. The deferred tax liability on the indefinite-lived intangible assets of Radio One generated a tax expense of approximately $25.3 million for the nine months ended September 30, 2012. The remaining portion of the tax expense or benefit primarily consists of Radio One state taxes of $248,000 which were offset by a tax benefit from Reach Media of $511,000.