Gaia, Inc. Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Our provision for income tax expense (benefit) for continuing operations is comprised of the following:

Variations from the federal statutory rate are as follows:


(in thousands)	2013			2012			2011
Expected federal income tax expense (benefit) at statutory rate of 34%	$	2,003		$	(4,348	)	$	(12,235	)
Effect of permanent goodwill impairment and worthless stock differences		—			—			7,668
Effect of 2008 State NOL’s and option forfeitures		189			—			—
Effect of permanent enhanced charitable donation differences		—			(31	)		(25	)
Effect of permanent other differences		269			34			96
Effect of change in financial statement carrying value of investment		—			(5,077	)		(5,534	)
State income tax expense (benefit), net of federal benefit		67			(196	)		(872	)
Federal tax credits		—			—			(164	)
Establishment of valuation allowance on net deferred tax assets		23,153			—			—
Other		337			209			406
Effect of differences between U.S. taxation and foreign taxation		(44	)		(35	)		(53	)

Income tax expense (benefit)	$	25,974		$	(9,444	)	$	(10,713	)

The components of the net accumulated deferred income tax assets as of December 31, 2013 and 2012 are as follows:


	December 31,
(in thousands)	2013			2012
Deferred tax assets (liabilities):
Current:
Provision for doubtful accounts	$	171		$	245
Inventory-related expense		950			699
Accrued liabilities		3,341			3,888
Net operating loss carryforward		820			3,617
Worthless Stock Deduction		3,055			—
Impaired loans to affiliate		—			959
Prepaid and deferred catalog costs		(103	)		(250	)
Other		35			(29	)
Exit Activity Accruals		1,603			—

Total current deferred tax assets		9,872			9,129
Valuation allowance		(9,872	)		—

Total current deferred tax assets, net of valuation allowance	$	—		$	9,129

Non-current:
Depreciation and amortization	$	(825	)	$	288
Section 181 qualified production expense		(850	)		(4,579	)
Net operating loss carryforward		15,297			13,737
Charitable carryforward		1,567			1,681
Loss (gain) from change in financial statement carrying value of investment, net		55			228
Gain from foreign business acquisition		(347	)		(347	)
Impairment of intangibles		—			5,412
Tax credits		920			899
Other		69			42

Total non-current deferred tax assets		15,886			17,361
Valuation allowance		(15,886	)		(2,669	)

Total non-current deferred tax assets, net of valuation allowance		—			14,692

Total net deferred tax assets	$	—		$	23,821

The sources of income (loss) before income taxes are as follows: