Income Taxes

12 Months Ended

Sep. 30, 2012

Income Taxes

6.

Income Taxes:

Deferred tax assets (liabilities) are comprised of the following at September 30:

	2012			2011
	Current	Long Term	Current		Long Term
Deferred assets (liabilities):
Tax effect of net operating loss carry-forward (includes $13,000 of charitable carry-forward)	$ –	$ 2,666,000	$–		$ 3,128,000
Partnership basis difference	–	148,000	–		147,000
Deferred revenue	–	117,000	–		126,000
Property and equipment basis differences	–	387,000	–		339,000
Other accrued liability difference	68,000	57,000	63,000		43,000
Net deferred tax assets	68,000	3,375,000	63,000		3,783,000
Less valuation allowance*	(68,000)	(3,375,000)	(63,000)		(3,783,000)
Net deferred tax assets	$  –	$ –	$ –		$ –

*

The valuation allowance decreased by $403,000 during the year ended September 30, 2012.

The Company has net operating loss carry-forwards available for future periods, as discussed below, of approximately $777,000 for 2012 and $3,200,000 from 2011 and prior for income tax purposes which expire from 2013 through 2032.  Based on the change in control, which occurred in 2011, the utilization of the loss carry-forwards incurred for periods prior to 2012 is limited to approximately $160,000 per year.

Total income tax expense for the years ended 2012 and 2011 differed from the amounts computed by applying the U.S. Federal statutory tax rates to pre-tax income as follows:

	2012	2011
Total expense (benefit) computed by applying the U.S. Statutory rate (35%)	$ (272,000)	$ (355,000)
State income tax, net of federal tax benefit	(23,000)	(31,000)
Effect of change in valuation allowance	(403,000)	49,000
Permanent differences	13,000	22,000
Expiration of net operating loss carry-forward	680,000	312,000
Other	5,000	3,000
Provision for income taxes	$ –	$ –