BITMINE IMMERSION TECHNOLOGIES, INC. Income Taxes Disclosure

NOTE 11 – INCOME TAXES

 

The provision for income taxes differs from the amount computed by applying the federal statutory income tax rate to the Company’s pre-tax income (loss) as follows:

 

SCHEDULE OF FEDERAL STATUTORY INCOME TAX RATE

		August 31, 2025				August 31, 2024
U.S. Federal Income Tax			21.0	%			21	%
Less: Non-current portion			(0.2	)%			(21	)%
Less: Settlement of notes receivable			0.0	%			0.0	%
Effective Tax Rate			20.9	%			0.0	%

 

The provision for income taxes consisted of the following for the periods ended August 31, 2025 and 2024:

SCHEDULE OF PROVISION FOR INCOME TAXES 

		August 31, 2025				August 31, 2024
Current
Federal		$	–			$	–
State			–				–
Deferred
Federal		$	92,295			$	–
State			–				–

 

Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities were as follows for the periods ended August 31, 2025 and 2024:

SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 

		August 31, 2025				August 31, 2024
Deferred tax assets
Net operating losses		$	10,626			$	3,614
Section 162(j) interest limitation carryforward			244				–
Accrued liabilities			1,734				–
Stock-based compensation			352,300				924
Total deferred tax assets		$	364,904			$	4,538
Deferred tax liabilities
Depreciation		$	(1,585	)		$	(1,326	)
Unrealized Gain/Loss on digital assets			(802,819	)			–
Total deferred tax liabilities		$	(804,404	)		$	(1,326	)
Net deferred tax asset/(liability)			(439,500	)			3,212
Less: valuation allowance			–				(3,212	)
Net deferred tax asset/(liability)		$	(439,500	)		$	–

 

The Company has $10,600 in U.S. Federal income tax NOL carryforwards as of August 31, 2025, that can be carried forward indefinitely and $3,600 of U.S. Federal income tax NOL carryforwards as of August 31, 2025. In addition, the Company has $244 of Section 163(j) interest expense limitation that can be carried forward indefinitely.

 

The Company recorded a valuation allowance of $0 and $3,200 at August 31, 2025 and 2024, respectively. The Company released the valuation allowance in 2025.

 

Valuation allowances have been established where the Company has concluded that it is more likely than not that such deferred tax assets are not realizable. The Company’s ability to realize its remaining deferred tax assets as of August 31, 2025, is primarily dependent upon generating sufficient taxable income of the proper character in future years. Management has concluded that there is sufficient positive evidence to support the expected realization of these deferred tax assets primarily due to the fact that the excess market value of the Company’s ETH over the cost basis of the Company’s ETH as of August 31, 2025 is a source of future taxable income that is expected to allow all of the Federal income tax net deferred tax assets to be realized. As part of the assessment of the amount of the valuation allowance, the Company considered that it has the ability and intent to execute tax planning strategies if necessary, including selling ETH with a built-in-gain.

 

After consideration of all available evidence, the Company has concluded that, as of August 31, 2025, it is more likely than not that its deferred tax assets will be realized. If the market value of ETH declines in future periods, the Company would need to assess other sources of forecasted taxable income of proper character, which could result in additional valuation allowances being recorded.