What was the deferred tax expense (benefit) for Exit in 2023?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
roperty and equipment | 2,125,033 | - | 20,291 | | Impairment of digital assets | - | - | (1,820,185) | | Legal settlement | (1,500,000) | - | - | | Interest | 137,304 | 78,187 | 170,816 | | Total other income (expense) | 762,337 | 78,187 | (1,629,078) | | Loss before provision for income taxes and non-controlling | | | | | interests | (389,110) | (1,814,746) | (2,480,526) | | Benefit for income taxes | (459,827) | (486,997) | (342,266) | | Consolidated net income (loss) | 70,717 | (1,327,749) | (2,138,260) | | Noncontrolling interest in subsidiary's loss | 616 | 463 | 691 | | Net income (loss) before foreign currency translation gain (loss) | 71,333 | (1,327,286) | (2,137,569) | | Foreign currency translation gain (loss), net of tax | (162,790) | 7,338 | (40,611) | | Net comprehensive loss | $ (91,457) | $ (1,319,948) | $ (2,178,180) |
EXIT REALTY CORP. INTERNATIONAL CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
| Year Ending December | 31 | Amount | |---|---|---| | 2025 | | $ 290,017 | See accompanying notes to the consolidated financial statements
EXIT REALTY CORP. INTERNATIONAL CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
| 2024 | 2023 | 2022 | |
|---|---|---|---|
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the deferred tax expense (benefit) or deferred provision for income taxes in 2023 was $154,000. This figure appears in the Statements of Cash Flows, under the line item 'Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities'.
Deferred tax expenses or benefits arise from temporary differences between the book value of assets and liabilities and their tax bases. These differences can result from items like depreciation methods, accrued expenses, or prepaid items. A deferred tax expense indicates that Exit will pay more taxes in the future, while a deferred tax benefit suggests that Exit will pay less taxes in the future.
For a prospective Exit franchisee, understanding deferred tax implications is crucial for financial planning. It's important to note that deferred tax assets are subject to evaluation for realizability, and valuation allowances may be recorded against them if it is deemed more likely than not that some or all of the deferred tax assets will not be realized. Franchisees should consult with a tax professional to understand how these deferred tax items might affect their specific financial situation and tax liabilities.
It is important to note that the FDD also states that the company's tax returns remain open for three years, meaning that the 2023 tax year was still open for examination by federal and state tax authorities as of December 31, 2024. This means that the deferred tax expense (benefit) for 2023 could be subject to change upon examination.