Note 15 - Federal Income Taxes

12 Months Ended

Jan. 31, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

15. FEDERAL INCOME TAXES

The Trust and its subsidiaries have income tax net operating loss carry forwards of approximately $10.1 million at January 31, 2014.  The Trust periodically has ownership changes within the meaning of Internal Revenue Code Section 382.  However, the Trust determined that such ownership changes would not have a material impact on the future use of the net operating losses. Generally, the Trust is no longer subject to income tax examinations prior to 2011 for federal and 2010 for state purposes.

The Trust and subsidiaries have federal and state net operating loss carry forwards of approximately $10.1 million at January 31, 2014, having expiration dates ranging from fiscal years 2018 to 2031.

Total and net deferred income tax assets at January 31,	2014			2013
Net operating loss carryforwards	$	3,349,000		$	4,622,000
Bad debt allowance		(16,000	)		(17,000	)
Accrued expenses		1,537,000			1,496,000
Prepaid insurance		1,000			13,000
Alternative minimum tax credit		61,000			61,000
Total deferred income tax assets		4,932,000			6,175,000
Deferred income tax liability associated with book/tax differences in hotel properties		(2,195,000	)		(2,263,000	)
Net deferred income tax asset		2,737,000			3,912,000
Valuation allowance		(2,737,000	)		(3,912,000	)
Net deferred income tax asset	$	-		$	-

 The differences between the statutory and effective tax rates are as follows for the year ended January 31, 2014:

Federal statutory rates	$	(295,000	)	(34	%)
State income taxes		(64,000	)	(7	%)
Sale of syndication units		345,000		40	%
True-ups to prior year return, net		51,000		40	%
Effective rate	$	37,000		6	%

The true-ups to prior year return related primarily to the sale of syndication units in the Company’s subsidiaries which are treated as equity transactions in the Company’s financial statements but are taxed as capital gain transactions and totaled $1,232,000, causing the utilization of net operating loss carryforwards totaling $1,175,000, which were then offset by the release of valuation allowances.

 The differences between the statutory and effective tax rates are as follows for the year ended January 31, 2013:

Federal statutory rates	$	(406,000	)	(34	%)
State income taxes		(88,000	)	(7	%)
Change in valuation allowance		718,000		60	%
True-ups to prior year return		(237,000	)	(20	%)
Other		13,000		1	%
Effective rate	$	-		0	%

The valuation allowance increased by approximately $718,000 in the year ended January 31, 2013 primarily due to a reduction in deferred tax liabilities associated with hotel properties due to timing differences in depreciation recognition.

The Trust's practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Trust had no accrued interest or penalties at January 31, 2014 and 2013.