Federal, State and Local Income Taxes:

6 Months Ended

Oct. 31, 2011

Income Tax Disclosure [Abstract]

Federal, State and Local Income Taxes:

Note 8-Federal, State and Local Income Taxes:

The Company computes its income tax provision in accordance with the requirements of the Income Tax Topic of the FASB’s ASC.

The provision for income taxes includes the following:

	For the Three Months Ended October 31,						For the Six Months Ended October 31,
($ in thousands)	2011			2010			2011			2010
Current tax expense/(benefit):
Federal	$	(93	)	$	23		$	(43	)	$	148
State and local		(123	)		-			(215	)		-
		(216	)		23			(258	)		148
Deferred tax expense:
Federal		1,330			769			2,336			1,833
State and local		(148	)		(38	)		33			39
		1,182			731			2,369			1,872
Income tax provision:	$	966		$	754		$	2,111		$	2,020

Deferred income taxes are provided for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. The tax effect of temporary differences giving rise to the Company’s deferred tax asset and deferred tax liability are as follows:

	October 31,			April 30,
($ in thousands)	2011			2011
Federal tax benefit:
Net operating loss	$	250		$	2,226
Unrealized gains on securities held for sale		(18	)		(34	)
Operating lease exit obligation		118			211
Deferred professional fees		21			109
Deferred charges		189			192
State and local tax benefit:
Net operating loss		31			268
Deferred state and local tax benefit, other		38			50
Deferred tax asset, short term	$	629		$	3,022

	October 31,			April 30,
($ in thousands)	2011			2011
Federal tax liability for deferred gain on EAM	$	17,679		$	17,679
Federal tax benefit deferred non-cash compensation		(619	)		(619	)
Federal tax benefit on lease exit obligation		(118	)		(108	)
Federal tax benefit on depreciation and amortization		(372	)		(364	)
Federal tax liability other		254			-
State and local tax liability for deferred gain on EAM		2,197			2,132
State and local tax benefit deferred non-cash compensation		(77	)		(62	)
State and local tax benefit on lease exit obligation		(15	)		(25	)
State and local tax benefit on depreciation and amortization		(46	)		(45	)
State and local tax benefit on deferred professional fees		(13	)		(14	)
Deferred tax liability, long-term	$	18,870		$	18,574

The Company’s net operating loss carryforward of approximately $714,000 is expected to be fully utilized during the fiscal year ending April 30, 2012. The tax effect of temporary differences giving rise to the Company’s long-term deferred tax liability is primarily a result of the federal, state, and local taxes related to the $50,510,000 gain from deconsolidation of the Company’s asset management and mutual fund distribution subsidiaries, partially offset by the long-term tax benefit related to the non-cash post-employment compensation of $1,770,000 granted to VLI’s former employee and the tax benefits related to the Company’s exit lease obligation of $914,000 all recognized in fiscal 2011.

At the end of each interim reporting period, the Company estimates the effective income tax rate to apply for the full year. The Company uses the effective income tax rate determined to provide for income taxes on a year-to-date basis and reflect the tax effect of any tax law changes and certain other discrete events in the period in which they occur.

The annual effective tax rate may change during fiscal 2012 due to a number of factors including but not limited to an increase or decrease in the ratio of items that do not have tax consequences to pre-tax income, the Company’s geographic profit mix between tax jurisdictions, new tax laws, new interpretations of existing tax laws and rulings by and settlements with tax authorities.

The overall effective income tax rates, as a percentage of pre-tax income, during the six months ended October 31, 2011 and 2010, were 34.60% and 37.24%, respectively.

The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory income tax rate to pretax income as a result of the following:

	For the Six Months Ended
	October 31,
	2011			2010
U.S. statutory federal rate		35.00	%		35.00	%
Increase/(decrease) in tax rate from:
State and local income taxes, net of federal income tax benefit		2.28	%		0.47	%
Effect of dividends received deductions		-0.10	%		0	%
Domestic production tax credit		-0.98	%		0	%
Alternative minimum tax/(benefit) - net operating loss limitation		-1.60	%		2.80	%
Other, net		-			-1.03	%
Effective income tax rate		34.60	%		37.24	%

The Company believes that, as of October 31, 2011, there were no material uncertain tax positions that would require disclosure under GAAP.

The Company is included in the consolidated federal income tax return of the Parent. The Company has a tax sharing agreement which requires it to make tax payments to the Parent equal to the Company’s liability/(benefit) as if it filed a separate return.

The Company’s federal income tax returns (included in the Parent’s consolidated returns) and state and city tax returns for fiscal years ended April 30, 2008, 2009, and 2010 are subject to examination by the tax authorities, generally for three years after they were filed. The IRS and New York State tax authorities have recently concluded an examination for the years ended through April 30, 2008, which resulted in no changes that had any adverse effect on the Company’s financial statements. More recently, the IRS commenced an audit of the fiscal year 2010.