Beeline Holdings, Inc. Income Taxes Disclosure

22. INCOME TAXES

 

The Company adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, as of January 1, 2025. The amendments enhanced the transparency of income tax disclosures and did not have a material impact on the Company’s financial statements.

 

The Company maintains deferred tax assets and liabilities that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

 

The items accounting for the difference between income taxes at the effective statutory rate and the provision for income taxes were as follows for the years ended December 31:

SCHEDULE OF PROVISION OF INCOME TAXES 

(Dollars in thousands)		2025				%				2024				%
Expected federal income tax benefit		$	(4,910	)			21.0	%		$	(2,139	)			16.3	%
State income taxes after credits			-				-				(1,145	)			8.8	%
Change in allowance			(7,924	)			33.9	%			3,284				(25.1	)%
Non-taxable items:
Adjustments to predecessor operating loss carryforwards			(2,474	)			10.6	%			-				-
Return to provision adjustments			15,032				(64.3	)%			-				-
Other			276				(1.2	)%			-				-
Total provision for income taxes		$	-				-			$	-				-

 

 

The Company’s approximate net deferred tax assets (liabilities) were as follows as of December 31:

SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 

(Dollars in thousands)		2025				2024
Current deferred tax assets (liabilities)
Accrued liabilities		$	35			$	-
Mortgage loans held for sale, net, at fair value			(51	)			(57	)
Total current deferred tax assets (liabilities)			(16	)			(57	)
Non-current deferred tax assets (liabilities)
Net operating loss carryforwards			18,262				34,853
Stock-based compensation			1,438				947
Right-of-use assets			(88	)			-
Property and equipment, net			(2,529	)			(2,369	)
Intangible assets, net			(1,065	)			(4,709	)
Lease liabilities			102				-
Equity method investment			-				(129	)
Total non-current deferred tax assets (liabilities)			16,120				28,593
Valuation Allowance			(16,104	)			(28,536	)
Net deferred tax assets (liabilities)		$	-			$	-

 

The gross operating loss carryforward was $77.0 million as of December 31, 2025. The Company provided a valuation allowance equal to the net deferred income tax assets (liabilities) for the years ended December 31, 2025 and 2024 because it was not known whether future taxable income will be sufficient to utilize the loss carryforward and other deferred tax assets (liabilities).

 

Additionally, the future utilization of the net operating loss carryforward to offset future taxable income is subject to an annual limitation as a result of ownership or business changes that may occur in the future. The Company has not conducted a study to determine the limitations on the utilization of these net operating loss carryforwards. If necessary, the deferred tax assets (liabilities) will be reduced by any carryforward that may not be utilized or expires prior to utilization as a result of such limitations, with a corresponding reduction of the valuation allowance.

 

The Company does not have any uncertain tax positions or events leading to uncertainty in a tax position. The Company’s 2022, 2023, and 2024 Corporate Income Tax Returns are subject to Internal Revenue Service examination.