Income Tax

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Tax

Note 7. Income Tax

The Company’s net deferred tax assets (liability) at December 31, 2023 and 2022 are as follows:

	December 31, 2023			December 31, 2022
Deferred tax assets (liability)
Federal net operating loss	$	—		$	—
Organizational costs/startup expenses		567,219			237,677
Unrealized gain on Trust Account		—			(79,128	)
Total deferred tax assets (liability)		567,219			158,549
Valuation allowance		(567,219	)		(237,677	)
Deferred tax assets (liability), net of allowance	$	—		$	(79,128	)

The income tax provision for the year ended December 31, 2023 and 2022 consists of the following:

	December 31, 2023			December 31, 2022
Federal
Current	$	576,131		$	190,069
Prior year true-up		(79,128	)
Deferred		(329,542	)		(80,521	)
State and Local
Current		—			—
Deferred		—			—
Change in valuation allowance		329,542			159,649
Income tax provision	$	497,003		$	269,197

As of December 31, 2023 and 2022, the Company had no of U.S. federal net operating loss carryovers available to offset future taxable income.

In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the year ended December 31, 2023 and 2022, the change in the valuation allowance was $329,542 and $159,649, respectively.

A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2023 and 2022 is as follows:

	December 31, 2023			December 31, 2022
Statutory federal income tax rate		21.0	%		21.0	%
State taxes, net of federal tax benefit		—	%		—	%
Prior year true-up		—	%		0.1	%
Business combination expenses		4.9	%		0.0	%
Change in fair value of FPA		(17.6	)%		(30.4	)%
Change in valuation allowance		16.3	%		(13.7	)%
Income tax provision		24.6	%		(23.0	)%

The Company files US federal and New York City and State tax returns and is subject to examination by various taxing authorities.

The Company’s effective tax rates for the period presented differ from the expected (statutory) rates due to the recording of full valuation allowances on deferred tax assets and Business Combination expenses and change in fair value of warrants between book and taxable income.