Company: INTG
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021858
Chunk: 9

Company: INTERGROUP CORP
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 2
Chunk 9
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 financial statements and tax returns, including the realizability of deferred tax assets and the effects
of changes in tax laws or their interpretation. Our income tax returns are subject to examination by the IRS and other taxing authorities;
changes in our assessment of these matters could materially affect our consolidated financial statements. We evaluate tax positions taken
or expected to be taken on a tax return and recognize benefits only when it is more-likely-than-not that the position will be sustained
upon examination, based on the technical merits and assuming full knowledge by the taxing authority. For positions that meet this threshold,
the recognized benefit is measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate
settlement. Positions that do not meet the recognition threshold are not recognized. Estimates, assumptions, and judgments are inherent
in these evaluations, and changes in our assessments could materially affect our consolidated financial statements. We recognize interest
and penalties related to uncertain tax positions in income tax expense.

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DEFERRED
INCOME TAXES – VALUATION ALLOWANCE

We
assess the realizability of deferred tax assets (“DTA”) each reporting period on a jurisdiction-by-jurisdiction basis. A
valuation allowance is recorded when it is more-likely-than not that some or all DTAs will not be realized. In forming this conclusion,
we weigh all available positive and negative evidence, placing significant weight on objectively verifiable evidence, including recent
financial results.

Cumulative
pre-tax losses over the preceding three years constitute significant negative evidence that DTAs may not be realizable, while cumulative
pre-tax income provides objective positive evidence of our ability to generate taxable income. Consistent with GAAP, when there is a
recent history of pre-tax losses, limited or no weight is placed on forecasts in assessing DTA realizability. When relevant, we use systematic
and logical scheduling to estimate the timing of reversal of temporary differences (i.e., when deferred tax liabilities will generate
taxable income and when DTAs will generate deductions). These assessments require assumptions and judgements and are inherently complex
and subjective. Significant judgment will also be required to determine the timing and amount of any future release of the valuation
allowance should our evidence change.

HOTEL
ASSETS AND DEFINITE-LIVED INTANGIBLE ASSETS

We
review hotel property and equipment and definite-lived intangible assets (together, “long-lived assets”) each quarter and
whenever events or changes in circumstances indicate that their carrying amounts may