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, 2015

Notes to Financial Statements

Income Tax Disclosure [Text Block]

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Income

Taxes

The income tax provision charged to operations for the years ended December 31, 2015, 2014 and 2013 was as follows:

	2015			2014			2013
Current:
U.S. Federal	$	25,029,693		$	17,243,130		$	13,381,265
State and local		400,689			398,401			327,730
		25,430,382			17,641,531			13,708,995
Deferred expense		(185,867	)		(974,997	)		(784,925	)
	$	25,244,515		$	16,666,534		$	12,924,070

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:

	2015			2014			2013
Computed tax expense at the statutory rate	$	26,349,057		$	18,001,044		$	14,049,902
Reduction in income taxes resulting from:
Statutory depletion		(1,320,605	)		(1,569,762	)		(1,317,177	)
State taxes		256,876			246,534			203,021
Other, net		(40,813	)		(11,282	)		(11,676	)
	$	25,244,515		$	16,666,534		$	12,924,070

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31, 2015 and 2014 are as follows:

	2015		2014
Basis difference in pension plan liability	$	118,967	$	269,271
Total deferred tax asset		118,967		269,271

Basis differences in real estate acquired through foreclosure		235,130		237,697
Deferred installment revenue on land sales for tax purposes		47,050		324,714
Total deferred tax liability		282,180		562,411
Net deferred tax liability	$	163,213	$	293,140

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 2012.