INCOME TAXES

12 Months Ended

Oct. 31, 2013

Income Taxes

INCOME TAXES

7.  INCOME TAXES:

   The credit for income taxes from continuing operations is as follows:

	10/31/13	10/31/12	10/31/11
Currently payable:
Federal	$36,000	$65,000	$0
State	5,000	2,000	2,000
	41,000	67,000	2,000
Deferred:
Federal	(362,000)	(680,000)	(1,331,000)
State	(503,000)	(659,000)	2,000
	(865,000)	(1,339,000)	(1,329,000)
Total	($824,000)	($1,272,000)	($1,327,000)

   A reconciliation between the amount computed using the statutory federal income tax rate of 34% and the actual credit for income taxes is as follows:

	10/31/13	10/31/12	10/31/11
Computed at statutory rate	($495,000)	($845,000)	($1,330,000)
State income taxes, net of federal income tax	(411,000)	(433,000)	2,000
Nondeductible expenses	1,000	1,000	1,000
Other	81,000	5,000	0
(Credit) provision for income taxes from continuing operations	($824,000)	($1,272,000)	($1,327,000)

   The components of the deferred tax assets and liabilities as of October 31, 2013 and 2012 are as follows:

	10/31/13	10/31/12
Deferred tax assets:
Accrued expenses	28,000	27,000
Deferred income	(74,000)	158,000
Defined benefit pension	1,130,000	2,014,000
Asset impairment	2,688,000	1,408,000
AMT credit carryforward	466,000	424,000
Net operating losses	4,174,000	4,662,000
Valuation allowance	(2,269,000)	(2,528,000)
Contribution carryforward	48,000	32,000
Stock options	0	164,000
Deferred tax asset	6,191,000	6,361,000

	10/31/13	10/31/12
Deferred tax liability:
Depreciation	6,694,000	6,777,000
Land basis	(2,000)	66,000
	6,692,000	6,843,000
Deferred income tax liability, net	$501,000	$482,000

   At October 31, 2013, the Companies have approximately $466,000 of Alternative Minimum Tax (AMT) credit carryforward available to reduce future income taxes.  The AMT credit has no expiration date.

   At October 31, 2013, the Companies had available approximately $4,887,000 of federal net operating loss carryforwards which will expire from 2026 to 2033. The Companies also have state net operating loss carryforwards of approximately $25,230,000 that will expire from 2021 to 2033.  The Companies have recorded a valuation allowance against a portion of the state net operating losses, which are not expected to be utilized. In Fiscal 2013, $244,000 of the state valuation allowance was reversed due to the profit expected in Fiscal 2014, primarily related to the land sale which occurred on November 6, 2013.

   The Companies recognize interest and/or penalties related to income tax matters in income tax expense.

   At October 31, 2013, the Companies had unsettled federal tax returns for Fiscal 2010, 2011 and 2012 and unsettled state tax returns for Fiscal 2010, 2011 and 2012 for the states of Louisiana, Minnesota, New Jersey, Pennsylvania, Texas and Colorado.