INCOME TAXES (Tables)

12 Months Ended

Jun. 30, 2019

INCOME TAXES

Schedule of Company's income tax expense

The provision for the Company’s income tax expense is comprised of the following:

For the years ended June 30,	2019		2018
Federal
Current tax (expense) benefit	$	(1,387,000)	$	1,455,000
Deferred tax benefit (expense)		2,563,000		(3,567,000)
		1,176,000		(2,112,000)
State
Current tax expense		(25,000)		(227,000)
Deferred tax expense		(850,000)		(717,000)
		(875,000)		(944,000)
Income Tax Benefit (expense)	$	301,000	$	(3,056,000)

Schedule of Effective income tax rate reconciliation

The provision for income taxes differs from the amount of income tax computed by applying the federal statutory income tax rate to income before taxes as a result of the following differences:

For the years ended June 30,	2019		2018
Statutory federal tax rate	$	(457,000)	$	(2,218,000)
State income taxes, net of federal tax benefit		(972,000)		(623,000)
Dividend received deduction		16,000		24,000
Valuation allowance		2,158,000		(330,000)
Basis difference in investments		815,000		—
Carryback tax payable		(1,140,000)		—
Other		(119,000)		91,000
	$	301,000	$	(3,056,000)

Schedule of Deferred tax assets and liabilities

The components of the deferred tax asset and liabilities are as follows:

	June 30, 2019		June 30, 2018
Deferred tax assets:
Net operating loss carryforwards	$	6,810,000	$	7,413,000
Capital loss carryforwards		1,283,000		1,132,000
Investment impairment reserve		1,295,000		1,276,000
Accruals and reserves		1,095,000		766,000
Interest expense		162,000		—
Tax credits		619,000		733,000
Unrealized loss on marketable securities		547,000		—
Other		231,000		190,000
Valuation allowance		(524,000)		(2,610,000)
		11,518,000		8,900,000
Deferred tax liabilities:
Equity earnings		(3,188,000)		(2,564,000)
Deferred gains on real estate sale and depreciation		(6,844,000)		(5,638,000)
Unrealized gains on marketable securities		—		(765,000)
State taxes		(18,000)		(178,000)
		(10,050,000)		(9,145,000)
Net deferred tax asset (liability)	$	1,468,000	$	(245,000)

Schedule of Net operating losses (NOLs)

As of June 30, 2019, the Company had estimated net operating losses (NOLs) of $25,447,000 and $16,583,000 for federal and state purposes, respectively. Below is the break-down of the NOLs for Intergroup, Santa Fe and Portsmouth. The carryforward expires in varying amounts through the year 2037.

	Federal		State
InterGroup	$	—	$	—
Santa Fe		9,735,000		3,913,000
Portsmouth		15,712,000		12,670,000
	$	25,447,000	$	16,583,000