INCOME TAXES

12 Months Ended

May 31, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

Note 8. INCOME TAXES

Deferred taxes as of May 31, 2022 and 2021 are as follows:

	2022			2021
Deferred tax asset:
Net operating loss carryforward	$	1,876,710		$	2,487,650
Income, tax reporting in excess of financial		1,497,136			-
Inventory		30,480			7,620
Total deferred tax asset		3,404,326			2,495,270
Deferred tax liability:
Depreciation and amortization, tax reporting in excess of financial		(3,546,886	)		(3,274,778	)
Valuation allowance		(1,601,134	)		(1,601,134	)
Net deferred tax liability	$	(1,743,694	)	$	(2,380,642	)

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 $1,601,134 has been recorded as of May 31, 2022 and 2021. The NOLs that are anticipated to be utilized during the available years total $1,312,266.

The net change in deferred taxes for the year ended May 31, 2022 and 2021, is as follows:

	2022			2021
Income, tax reporting in excess of financial	$	1,497,136		$	-
Net operating loss carryforward		(610,940	)		(868,195	)
Depreciation and amortization, tax reporting in excess of financial		(272,108	)		(284,131	)
Accrued expenses		-			(35,445	)
Inventory		22,860			(83,820	)
Net change	$	636,948		$	(1,271,590	)

The provision for income taxes as of May 31, 2022 and 2021 consists of the following:

	2022			2021
Current income tax -
Federal	$	503,612		$	-
State		668,753			208,999
Deferred income tax		(636,948	)		1,271,591
Provision for income taxes	$	535,417		$	1,480,590

Greystone’s provision for income taxes for the years ended May 31, 2022 and 2021 differs from the federal statutory rate as follows:

	2022			2021
Tax provision using statutory rates		21	%		21	%
State income taxes		9			9
Permanent differences		(17	)		-
VIE income passed to members		(2	)		(1	)
Tax provision per financial statements		11	%		29	%

As of May 31, 2022, Greystone had net operating losses (NOLs) for Federal income tax purposes totaling $8,936,713, as follows:

	NOL Carryforward		Year Expiring
Year ended May 31, 2003		3,088,722	2023
Year ended May 31, 2004		1,632,774	2024
Year ended May 31, 2005		4,215,217	2025