v3.26.1
Note 10 - Income Taxes
 12 Months Ended
May 31, 2026
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

Note 10. INCOME TAXES

 

Deferred taxes as of May 31, 2026 and 2025 are as follows:

 

    May 31,     May 31,  
   

2026

    

2025

  

Deferred tax asset:

                

Net operating loss carryforward

   $ 1,757,711     $ -  

Other

     333,562       179,295  

Total deferred tax asset

     2,091,273       179,295  

Deferred tax liability:

                

Depreciation and amortization recognized for tax in excess of financial

     (4,378,229 )     (4,804,317 )

Deferred rent adjustments

     (969,292 )     (1,167,327 )

Other

     (3,855 )     -  

Valuation allowance

     (1,757,711 )     -  

Net deferred tax liability

   $ (5,017,814 )   $ (5,792,349 )

 

A deferred tax asset is recognized for tax-deductible temporary differences and operating losses using the applicable enacted tax rate. In assessing the realizability of deferred tax assets, management considers the likelihood of whether it is more likely than not the net deferred tax asset will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which net operating losses and the reversal of timing differences may offset taxable income. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character in carryforward periods under the tax law. Based on this evaluation, management has determined that Greystone will not be able to realize the full effect of the deferred tax assets and a valuation allowance of $1,757,711 and $0 has been recorded as of May 31, 2026 and 2025, respectively. All remaining net operation losses do not expire but are subjection to a utilization limitation.

 

The net change in deferred taxes for the years ended May 31, 2026 and 2025, is as follows:

 

   

2026

    

2025

  

Net operating loss carryforward

   $ 1,757,711     $ (1,051,595 )

Depreciation and amortization, tax reporting in excess of financial

     426,088       356,192  

Deferred rent adjustments

     198,035       (1,167,327 )

Valuation allowance

     (1,757,711 )     793,337  

Other

     150,412       122,002  

Net change

   $ 774,535     $ (947,391 )

 

The provision for income taxes as of May 31, 2026 and 2025 consists of the following:

 

   

2026

    

2025

  

Current income tax:

                

Federal

   $ 240,785     $ 110,115  

State

     94,231       48,959  

Deferred income tax expense (benefit)

     (774,535 )     947,391  

Provision (Benefit) for income taxes

   $ (439,519 )   $ 1,106,465  

 

Greystone’s provision for income taxes for the years ended May 31, 2026 and 2025 differs from the federal statutory rate as follows:

 

   

2026

    

2025

  
   

Tax Effect ($)

    

Rate Effect (%)

    

Tax Effect ($)

    

Rate Effect (%)

  

Tax (benefit) provision using statutory rates

     (1,801,151 )     21 %     717,034       21 %

State income taxes (benefits)

     (481,079 )     6       202,035       6  

Permanent differences

     82,634       1       27,510       1  

Provision to return adjustment

     2,366       -       277,608       7  

Change in valuation allowance

     1,757,711       21       (117,722 )     (3 )

Tax (benefit) provision per consolidated financial statements

   $ (439,519 )     (5 )%   $ 1,106,465       32 %