Texas Pacific Land Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Note 6 - Income Taxes

Note 6 - Income Taxes

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Income Tax Disclosure [Text Block]

(

)

Income

Taxes

The income tax provision charged to operations for the years ended

December

31,

2016,

2015

and

2014

was as follows:

	2016			2015			2014
Current:
U.S. Federal	$	21,665,130		$	25,029,693		$	17,243,130
State and local		376,041			400,689			398,401
		22,041,171			25,430,382			17,641,531
Deferred benefit		(4,193,801	)		(185,867	)		(974,997	)
	$	17,847,370		$	25,244,515		$	16,666,534

The Trust is taxed as if it were a corporation. Total income tax expense differed from the amounts computed by applying the U.S. Federal income tax rate of

35%

to income before Federal income taxes as a result of the following:

	2016			2015			2014
Computed tax expense at the statutory rate	$	19,280,422		$	26,349,057		$	18,001,044
Reduction in income taxes resulting from:
Statutory depletion		(1,608,961	)		(1,320,605	)		(1,569,762	)
State taxes		204,776			256,876			246,534
Other, net		(28,867	)		(40,813	)		(11,282	)
	$	17,847,370		$	25,244,515		$	16,666,534

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at

December

31,

2016

and

2015

are as follows:

	2016			2015
Deferred revenue	$	4,177,130		$	—
Basis difference in pension plan liability		(36,363	)		118,967
Total deferred tax assets		4,140,767			118,967

Basis differences in real estate acquired through foreclosure		233,977			235,130
Deferred installment revenue on land sales for tax purposes		32,002			47,050
Total deferred tax liability		265,979			282,180
Net deferred tax asset (liability)	$	3,874,788		$	(163,213	)

The Trust files a U. S. Federal income tax return. With few exceptions, the Trust is no longer subject to U. S. Federal income tax examination by tax authorities for years before

2013.