Linkhome Holdings Inc. Income Taxes Disclosure

NOTE 10 — INCOME TAXES

 

Linkhome Holdings was incorporated in the State of Nevada in November 2023 and is subject to a 21% corporate federal income tax rate. There is no state income tax in Nevada. Linkhome Holdings serves as a holding company for Linkhome Realty.

 

Effective July 13, 2021, Linkhome Realty elected to be taxed as an S-corporation, a pass-through entity, for which the income, losses, deductions, and credits flow through to the shareholders of the Company for federal tax purposes. The California state annual income tax for S-corporation is the greater of 1.5% of the corporation’s net income or $800. Effective January 1, 2024, Linkhome Realty’s tax status changed to C-corporation, subject to a 21% corporate federal income tax rate and an 8.84% California state income tax rate.

 

Effective for the tax year beginning January 1, 2024, and continuing thereafter unless revoked, Linkhome Holdings and Linkhome Realty have elected to file a consolidated federal income tax return. As a result, Linkhome Holdings’ net operating losses (“NOLs”) can be used to offset Linkhome Realty’s taxable income, reducing the Company’s overall tax liability.

 

The Company’s provision for income taxes consisted of the following:

 

		Year Ended December 31, 2025				Year Ended December 31, 2024
Current:
Federal income tax expense		$	22,865			$	207,469
State income tax expense			30,407				101,883
Deferred:
Federal income tax benefit			(557	)			—
State income tax benefit			(185	)			—
Adjustments related to prior-year tax returns			(1,197	)			—
Total income tax expense		$	51,333			$	309,352

 

The following tables reconciled the federal statutory income tax rate to the Company’s effective tax rate for the years ended December 31, 2025 and 2024:

 

		Year Ended December 31, 2025				Year Ended December 31, 2024
Federal statutory income tax rate			21.00	%			21.00	%
State statutory income tax rate, net of federal benefit			18.88	%			7.40	%
Permanent difference (non-deductible expenses)			1.74	%			0.04	%
Prior-year return-to-provision adjustment			(0.95	)%			—
Effective tax rate			40.67	%			28.44	%

As of December 31, 2025 and 2024, the net deferred tax assets consisted of the following:

 

		December 31, 2025				December 31, 2024
Deferred tax assets:
Capital loss carryforward		$	742			$	—
Less: valuation allowance			—				—
Deferred tax assets, net		$	742			$	—

 

The Company evaluates its valuation allowance requirements at the end of each reporting period by reviewing all available evidence, both positive and negative, and assessing whether, based on the weight of that evidence, a valuation allowance is needed. As of December 31, 2025, the Company had deferred tax assets of $742 related to capital loss carryforwards generated from realized losses on trading securities. Management evaluated the available evidence regarding the realizability of this deferred tax asset and concluded that a valuation allowance was not required as of December 31, 2025.