Company: LRHC
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032211
Chunk: 1086

Company: La Rosa Holdings Corp.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 2
Chunk 1086
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 1,043,064 
  
    Ending balance of deferred income tax valuation allowance 
    $(4,582,120) 
     (1,577,303)

As of December 31, 2024, the Company has federal
net operating loss carryforwards of approximately $12.0 million and state net operating loss carryforwards of approximately $12.9 million
which can be carried forward indefinitely. As of December 31, 2023, the Company had federal net operating loss carryforwards of approximately
$5.1 million and state net operating loss carryforwards of approximately $5.3 million. Deferred tax assets for net operating loss carryforwards
are fully offset by a valuation allowance.

We have taken current and potential future expirations
into consideration when evaluating the need for valuation allowances against these deferred tax assets. A valuation allowance for deferred
tax assets is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Realization
is dependent upon the generation of future taxable income or the reversal of federal tax liabilities during the periods in which those
temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities projected future taxable income
and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable
income over the periods in which our deferred tax assets are deductible, we believe it is more likely than not that we will not realize
the benefits of these deductible differences. We have recorded a valuation allowance for deferred tax assets of $4,582,120 and $1,577,303
as of December 31, 2024 and 2023, respectively.

The Company applies the FASB’s provisions
for uncertain tax positions. The Company utilizes the two-step process to determine the amount of recognized tax benefit. For tax positions
meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that
has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company recognizes interest
and penalties associated with uncertain tax positions as a component of income tax expense.

As of December 31, 2024, management does not believe
the Company has any material uncertain tax positions that would require it to measure and reflect the potential lack of sustainability
of a position on audit in its financial statements. The Company will continue to evaluate its uncertain tax positions in future periods
to determine