INCOME TAXES

The results of the Company’s operations are included in a federal income tax return. The Company provides deferred income taxes on the net differences between the carrying amounts of assets and liabilities for financial and income tax reporting.

No benefit (provision) has been recognized for the years ended December 31, 2023 and 2022.

The difference between the provision for income taxes reported in the consolidated financial statements and the provision for income taxes based on federal statutory rates results principally from (1) valuation allowance adjustments, (2) goodwill impairment and (3) certain other permanent differences.

Reconciliation of the statutory federal income tax rates consist of the following:


	December 31, 2023		December 31, 2022
Federal statutory rate	21.0	%	(21.0)	%
Goodwill impairment	—	%	5.8	%
Change in valuation allowance	(22.5)	%	15.4	%
Other	1.5	%	(0.2)	%
Total	—	%	—	%

The Company’s total deferred income taxes at December 31, 2023 and 2022 consisted of the following:


	December 31, 2023		December 31, 2022
Asset retirement obligation	$	1,177,403	$	1,097,566
Mineral rights and properties, plant, and equipment	423,328		697,805
Mining exploration, development, claims, and permit costs	729,282		404,649
Lease liability	176,122		2,695,912
Net operating loss carryforward	46,105,332		46,020,993
Capital loss carryforward	1,291,211		1,024,983
Fair value adjustments	—		3,827,353
Capitalized research expenditures	2,188,570		1,327,372
Other	1,271,660		624,764
Total deferred tax asset	53,362,908		57,721,397
Valuation allowance	(48,109,677)		(50,171,780)
Net deferred tax assets	5,253,231		7,549,617

Deferred tax liabilities:
Right of use asset – leases	(172,991)		(3,469,304)
Intangible assets	(2,951,300)		(4,080,313)
Fair value adjustments	(2,128,940)		—
Total deferred tax liabilities	(5,253,231)		(7,549,617)
Net deferred tax assets and liabilities	$	—	$	—

The Company records a valuation allowance if, based on the weight of all available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. At December 31, 2023, and 2022, the Company has determined that a full valuation allowance is necessary against its net deferred tax assets based on this evidence and have valuation allowances of $48.1 million and $50.2 million, respectively, against the net deferred tax assets.

At December 31, 2023, the Company has total net operating and capital loss carryforwards of approximately $225.6 million. Of this total, the Company has approximately $168.2 million in net operating loss carryforwards for federal income tax purposes which, if not utilized, will begin to expire in 2024 and could be subject to certain limitations under section 382 of the Internal Revenue Code of 1986, as amended, approximately $51.3 million for federal income tax purposes with no expiration, but which are subject to 80% limitation upon utilization, and approximately $6.1 million of capital loss carryforwards for federal income tax purposes which, if not utilized, will begin to expire in 2027.

At December 31, 2023, and 2022, the Company did not have any unrecognized tax benefits. The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. The Company currently has no federal or state tax examinations in progress nor has it had any federal or state tax examinations since its inception. The Company is subject to U.S. federal and state income tax examination for tax years 2020 and forward. Tax returns for years prior to 2020 may remain open with respect to net operating loss carryforwards that are utilized in a later year, as tax attributes from prior years can be adjusted during an audit of a later year.

Historical Timeline

Fiscal Year	Filed
2023	Feb 27, 2024	Showing above
2022	Mar 16, 2023

2021	Mar 28, 2022

2020	Mar 10, 2021

2019	Mar 30, 2020

2018	Feb 26, 2019

2017	Feb 20, 2018

2016	Mar 9, 2017

2015	Jan 28, 2016

About Income Taxes Disclosures

The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.

Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.

Comstock Inc. Income Taxes Disclosure

Historical Timeline

About Income Taxes Disclosures

Other Available Disclosures