Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 533

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1B
Chunk 533
---
1,894) 
     — 
  
    Derivative mark to market 
     (89) 
     — 
  
    Other items 
     (236) 
     — 
  
    Total deferred tax liabilities 
     (3,407) 
     (805)
  
    Net deferred tax assets 
    $9,027  
    $4,884 

A valuation allowance for deferred tax assets
is recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization
of deferred tax assets is dependent upon the generation of future taxable income and tax planning strategies which will create taxable
income during the periods in which those temporary differences become deductible. Management considered the scheduled reversal of deferred
tax liabilities, projected future taxable income, net operating loss carry-back potential, and tax planning strategies in making this
assessment. Based upon the Company’s assessment of all available evidence, management determined it was more likely than not that
the net deferred tax asset would be realized at December 31, 2024.

At December 31, 2024,
the Company had federal operating loss carry-forwards of approximately $13.0 million, $2.8 million of which are subject to Internal Revenue
Code (“IRC”) Section 382 limitations, which limit the annual use of acquired losses to $250,000 per year, and begin to expire
in 2028. At December 31, 2024, the Company recorded deferred tax assets of $2.7 million related to the Federal net operating loss
carry-forwards.

It is the Company’s
policy to provide for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether
a tax benefit is more likely than not to be sustained upon examination by tax authorities. As of December 31, 2024, and 2023, there were
no material uncertain tax positions related to federal and state income tax matters. The Company does not expect the amounts of unrecognized
tax benefits to significantly increase or decrease within the next twelve months.

The Company files consolidated U.S. federal
and various state income/franchise tax returns. The Company is no longer subject to examination by U.S. federal taxing authorities for
years before 2021 and is no longer subject to examination by state taxing authorities for years before 2020. Our federal and state tax
returns have not been audited for the past seven years. 

111

NOTE