Federal Income Taxes

12 Months Ended

May. 31, 2015

Income Tax Disclosure [Abstract]

Federal Income Taxes

Note 7. FEDERAL INCOME TAXES

Deferred taxes as of May 31, 2015 and 2014 are as follows:

	2015			2014
Deferred tax asset:
Net operating loss carryforward	$	1,892,673		$	1,936,834
Depreciation and amortization, financial reporting in excess of tax		-			219,838
Stock compensation costs		21,632			36,328
Allowance for doubtful accounts		4,508			17,000
Other		13,429			-
Total deferred tax asset		1,932,242			2,210,000
Deferred tax liability:
Depreciation and amortization, tax reporting in excess of financial		(153,005	)		-
Net deferred tax asset	$	1,779,237		$	2,210,000

Deferred tax assets were classified in the consolidated balance sheets at May 31, as follows:

	2015		2014
Deferred tax assets - current	$	1,222,110	$	1,077,000
Deferred tax assets - non-current		557,127		1,133,000
Deferred tax assets - total	$	1,779,237	$	2,210,000

In assessing the reliability of deferred tax assets, management considers the likelihood of whether it is more likely than not the net deferred tax asset will be realized. Based on this evaluation, management has reduced the valuation allowance which allows for recognition of the tax benefits as deferred tax assets for May 31, 2015 and 2014, respectively.

The net change in deferred taxes for the year ended May 31, 2015 and 2014 is as follows:

	2015			2014
Net operating loss carryforward	$	(44,121	)	$	(28,536	)
Depreciation and amortization, financial reporting in excess of tax		(372,843	)		(223,339	)
Stock compensation costs		(14,696	)		18,164
Deferred compensation accrual		-			(244,800	)
Allowance for doubtful accounts		(12,532	)		(17,000	)
Valuation allowance		-			1,546,511
Other		13,429			-
Total	$	(430,763	)	$	1,051,000

The provision (benefit) for income taxes at May 31 consists of the following:

	2015		2014
Current income tax – Federal and State	$	-	$	11,000
Deferred income tax provision (benefit)		430,763		(1,051,000	)
Provision for (benefit from) income taxes	$	430,763	$	(1,040,000	)

Greystone’s provision (benefit) for income taxes for the years ended May 31, 2015 and 2014 differs from the federal statutory rate as follows:

	2015			2014
Tax provision using statutory rates		34	%		34	%
Net operating loss expiration		7			-
Net change in valuation allowance		-			(75	)
Other		1			(9	)
Tax provision (benefit) per financial statements		42	%		(50	)%

At May 31, 2015, Greystone had a net operating loss (NOL) for Federal income tax purposes from inception through May 31, 2005 of $17,242,600 expiring in fiscal year 2015 through fiscal year 2025 of which $2,250,000 is management’s estimate of the usable amount pursuant to Internal Revenue Code Section 382. The limitation is due to a change in control of Greystone during the fiscal year ended May 31, 2005. The utilization of NOL’s accumulated through fiscal year 2005 is limited to approximately $225,000 per year.

	NOL Carryforward		Year Expiring
Cumulative through May 31, 2005	$	2,250,000		2016 - 2025
Year ended May 31, 2006		237,364		2026
Year ended May 31, 2007		2,151,837		2027
Year ended May 31, 2011		746,484		2031
Year ended May 31, 2015		266,095		2035

Greystone is no longer subject to income tax examinations by tax authorities for years prior to fiscal year 2006.

Greystone does not have any uncertain tax positions that could result in a material change to its financial position.