Company: INTG
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010724
Chunk: 93

Company: INTERGROUP CORP
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 93
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form the basis for making judgments about the carrying values of assets and liabilities. The actual results may differ from these estimates
or our estimates may be affected by different assumptions or conditions. There have been no material changes to the Company’s critical
accounting policies during the nine months ended March 31, 2025.

INCOME
TAXES

Judgment
is required in addressing the future tax consequences of events that have been recognized in our consolidated financial statements or
tax returns (e.g., realization of deferred tax assets, changes in tax laws, or interpretations thereof). In addition, we are subject
to examination of our income tax returns by the IRS and other tax authorities. A change in the assessment of the outcomes of such matters
could materially impact our consolidated financial statements. We evaluate tax positions taken or expected to be taken on a tax return
to determine whether they are more likely than not of being sustained, assuming that the tax reporting positions will be examined by
taxing authorities with full knowledge of all relevant information, prior to recording the related tax benefit in our consolidated financial
statements. If a position does not meet the more likely than not standard, the benefit cannot be recognized. Assumptions, judgment, and
the use of estimates are required in determining if the “more likely than not” standard has been met when developing the
provision for income taxes. A change in the assessment of the “more likely than not” standard with respect to a position
could materially impact our consolidated financial statements.

The
Company and its subsidiary Portsmouth, compute and file income tax returns and prepare discrete income tax provisions for financial reporting.
The income tax benefit during the three months ended March 31, 2025 and 2024 represents primarily the combined income tax effect of Portsmouth’s
pretax loss which includes the net loss from the Hotel and the pre-tax loss from InterGroup (standalone). InterGroup and Portsmouth file
their respective income tax returns on a calendar year basis.

DEFERRED
INCOME TAXES – VALUATION ALLOWANCE

We
assess the realizability of our deferred tax assets quarterly and recognize a valuation allowance when it is more likely than not that
some or all of our deferred tax assets are not realizable. This assessment is completed by tax jurisdiction and relies on the weight
of both positive and negative evidence available, with significant weight placed on recent financial results. Cumulative pre-tax losses
for the three-year period are considered significant objective negative evidence that some or all of our deferred