Note 9 - Income Taxes

12 Months Ended

May 31, 2024

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 9.    INCOME TAXES

Deferred taxes as of May 31, 2024 and 2023 are as follows:

	2024			2023
Deferred tax asset:
Net operating loss carryforward	$	1,051,595		$	2,084,595
Interest expense carryforward		-			172,126
Other		57,294			31,797
Total deferred tax asset		1,108,889			2,288,518
Deferred tax liability:
Depreciation and amortization recognized for tax in excess of financial		(5,160,509	)		(5,149,436	)
Valuation allowance		(793,337	)		(1,044,361	)
Net deferred tax liability	$	(4,844,957	)	$	(3,905,279	)

A deferred tax asset is recognized for tax-deductible temporary differences and operating losses using the applicable enacted tax rate. In assessing the realizability of deferred tax assets, management considers the likelihood of whether it is more likely than not the net deferred tax asset will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which net operating losses and the reversal of timing differences may offset taxable income. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character in carryforward periods under the tax law. Based on this evaluation, management has determined that Greystone will not be able to realize the full effect of the deferred tax assets and a valuation allowance of $793,337 and $1,044,361 has been recorded as of May 31, 2024 and 2023, respectively. The NOLs that are anticipated to be utilized during the available years total $1,229,802.

The net change in deferred taxes for the year ended May 31, 2024 and 2023, is as follows:

	2024			2023
Income recognized for tax in excess of financial	$	-		$	(1,497,136	)
Net operating loss carryforward		(1,033,000	)		207,885
Depreciation and amortization, tax reporting in excess of financial		(11,073	)		(1,602,550	)
Interest expense carryforward		(172,126	)		172,126
Valuation allowance		251,024			556,773
Other		25,496			1,317
Net change	$	(939,679	)	$	(2,161,585	)

The provision for income taxes as of May 31, 2024 and 2023 consists of the following:

	2024			2023
Current income tax -
Federal	$	282,153		$	-
State		(190,722	)		300,115
Deferred income tax		939,679			2,161,585
Provision for income taxes	$	1,031,204,		$	2,461,700

Greystone's provision for income taxes for the years ended May 31, 2024 and 2023 differs from the federal statutory rate as follows:

	2024			2023
Tax provision using statutory rates		21	%		21	%
State income taxes		8			8
Permanent differences		(0	)		(1	)
Change in state rates		(10	)		-
Change in valuation allowance		(2	)		-
Tax provision per consolidated financial statements		17	%		28	%

As of May 31, 2024, Greystone had net operating losses (NOLs) for Federal income tax purposes totaling $4,215,217, expiring in the fiscal year ended May 31, 2025, and $792,380, which does not expire.