Company: CPSS
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001683168-25-001548
Chunk: 300

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 1A
Chunk 300
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. Our net deferred tax asset of $1.0 million consists of approximately $479,000
of net U.S. federal deferred tax assets and $530,000 of net state deferred tax assets.

As of December 31, 2024, we
had net operating loss carryforwards for state income tax purposes of $4.1 million. These state net operating losses begin to expire in
2025.

We recognize a tax position
as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax
examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being
realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. We recognize
potential interest and penalties related to unrecognized tax benefits as income tax expense. At December 31, 2024, we had no unrecognized
tax benefits for uncertain tax positions.

We are subject to taxation
in the US and various state jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state, or local examinations
by tax authorities for years before 2020.

(10) Commitments and Contingencies

Leases

The Company has operating
leases for corporate offices, equipment, software and hardware. The Company has entered into operating leases for the majority of its
real estate locations, primarily office space. These leases are generally for periods of three to seven years with various renewal options.
The depreciable life of leased assets is limited by the expected lease term. Leases with an initial term of 12 months or less are not
recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the lease term.

We determine if a contract
contains a lease at contract inception. Right-of-use assets and liabilities are recognized based on the present value of lease payments
over the lease term. In determining the present value of lease payments, we use the Company’s incremental borrowing rate. Right-of-use
assets are included in other assets and lease liabilities are included in accounts payable and accrued expenses in our Condensed Consolidated
Balance Sheet.

     F-29 

CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the supplemental balance
sheet information related to leases:

    Schedule