Company: REX
Filing Date: 2025-12-04
Form Type: 10-Q
Source: 0000930413-25-003566
Chunk: 24

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-12-04
Form: 10-Q
Item: Part I, Item 1
Chunk 24
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 respectively.

The Company assessed all available positive
and negative evidence to determine whether it expects sufficient future taxable income will be generated to allow for the realization
of existing federal deferred tax assets. There is sufficient objectively verifiable income for management to conclude that it is
more likely than not that the Company will utilize available federal deferred tax assets prior to their expiration.

On July 4, 2025, the OBBBA was signed into
law. The OBBBA contains various tax reform provisions affecting businesses. We are still evaluating any impact this may have on
our effective tax rate in the current year. In addition, we do anticipate that certain tax provisions in the OBBBA, such as the
extension of bonus depreciation for assets placed in service after January 19, 2025, to result in current deductions that will
lower cash paid for income taxes for 2025. The OBBBA made changes to the 45Z and 45Q tax credits that the Company intends to take
advantage of which could materially impact our effective tax rate. We continue to evaluate the tax and other provisions of the
OBBBA and the potential effects on financial position, results of operations, and cash flows.

The Company files a U.S. federal income tax
return and various state income tax returns. In general, the Company is no longer subject to U.S. federal, state or local income
tax examinations by tax authorities for years ended January 31, 2014 and prior. The Company is currently undergoing a federal

23

income tax examination for the years ended January 31, 2015
through January 31, 2022 related to refined coal production tax credits pursuant to IRC Section 45 and research and experimentation
credits pursuant to IRC Section 41 claimed during those years. The IRS has given us notice they plan to deny these credits. We
plan to vigorously defend these credits.

On a quarterly and annual basis, the Company
accrues for the effects of open uncertain tax positions and the related potential penalties and interest. It is reasonably possible
that the amount of the unrecognized tax benefit with respect to certain unrecognized tax positions will increase or decrease during
the next 12 months.

A reconciliation of the beginning and ending
amount of unrecognized tax benefits, including interest and penalties, for the nine-month periods ended October 31, 2025 and 2024,
is as follows (amounts in thousands):

    Nine Months Ended  October 31, 

    2025