Income Taxes

12 Months Ended

Oct. 31, 2024

NOTE 13 – INCOME TAXES

Provision for Taxes

The Tax Act was signed into law on December 22, 2017 and the Tax Act required the Company to use a statutory tax rate of 21% for the years ended October 31, 2024 and 2023.

The Company files a United States federal income tax return and a Canadian branch return on a fiscal year-end basis and files Mexican income tax returns for its two Mexican subsidiaries on a calendar year-end basis. The Company and two of its wholly owned subsidiaries, Minera Metalin and Minas, have not generated taxable income since inception.

Contratistas, another wholly owned Mexican subsidiary, has historically generated taxable income based upon intercompany fees billed to Minera Metalin on the services it provides. On August 26, 2021, Contratistas merged with and into Minera Metalin.

On April 16, 2010, a wholly owned subsidiary of the Company was merged with and into Dome, resulting in Dome becoming a wholly owned subsidiary of the Company. Dome, a Delaware corporation, files a tax return in the United States as part of the Company’s consolidated tax return.

The components of loss before income taxes were as follows:

	For the year ended
	October 31,
	2024			2023
United States	$	(40,000	)	$	(871,000	)
Foreign		(129,000	)		(380,000	)
Loss before income taxes	$	(169,000	)	$	(1,251,000	)

The components of the provision for income taxes are as follows:

	For the year ended
	October 31,
	2024		2023
Current tax expense	$	1,055	$	2,217
Deferred tax expense		—		—
	$	1,055	$	2,217

The Company’s provision for income taxes for the fiscal year ended October 31, 2024 consisted of a tax expense of $1,055 (2023 - $2,217) related to a provision for income taxes for the Silver Bull Canadian branch return for the fiscal year ended October 31, 2024.

The reconciliation of the provision for income taxes computed at the U.S. statutory rate to the provision for income tax as shown in the statement of operations and comprehensive loss is as follows:

	For the year ended
	October 31,
	2024			2022

Income tax benefit calculated at U.S. federal income tax rate	$	(35,000	)	$	(263,000	)

Differences arising from:
Other permanent differences		57,000			187,000
Differences due to foreign income tax rates		(26,000	)		(34,000	)
Adjustment to prior year taxes		153,000			269,000
Inflation adjustment foreign net operating loss		(51,000	)		(363,000	)
Foreign currency fluctuations		10,000			(320,000	)
Decrease in valuation allowance		(589,000	)		(831,000	)
Net operating loss carry forwards expiration - Mexico		484,000			1,359,000
Other		(2,000	)		(2,000	)
Net income tax provision	$	1,000		$	2,000

The components of the deferred tax assets at October 31, 2024 and 2023 were as follows:

	For the year ended October 31,
	2024			2023

Deferred tax assets:
Net operating loss carry forwards – U.S.	$	5,155,000		$	5,146,000
Net operating loss carry forwards – Mexico		2,080,000			2,806,000
Exploration costs		1,046,000			1,109,000
Other – United States		21,000			103,000
Other – Mexico		90,000			24,000
Total net deferred tax assets		8,392,000			9,188,000
Less: valuation allowance		(8,392,000	)		(9,188,000	)
Net deferred tax asset	$	—		$	—

At October 31, 2024, the Company has U.S. net operating loss carry-forwards of approximately $19 million that expire in the years 2028 through 2037 and $5 million which will be carried forward indefinitely. The Company has approximately $3 million of net operating loss carry-forwards in Mexico that expire in the calendar years 2024 through 2033.

The valuation allowance for deferred tax assets of $8.4 million and $9.2 million at October 31, 2024 and 2023, respectively, relates principally to the uncertainty of the utilization of certain deferred tax assets, primarily net operating loss carry forwards in various tax jurisdictions. The Company continually assesses both positive and negative evidence to determine whether it is more likely than not that the deferred tax assets can be realized prior to their expiration. Based on the Company’s assessment, it has determined that the deferred tax assets are not currently realizable.

Net Operating Loss Carry Forward Limitation

For U.S. federal income tax purposes, a change in ownership under IRC Section 382 has occurred as a result of the Dome merger in April 2010. When an ownership change has occurred, the utilization of these losses against future income would be subject to an annual limitation, which would be equal to the value of the acquired company immediately prior to the change in ownership multiplied by the IRC Section 382 rate in effect during the month of the change.

Accounting for Uncertainty in Income Taxes

During the fiscal years ended October 31, 2024 and 2023, the Company has not identified any unrecognized tax benefits or had any additions or reductions in tax positions and therefore a reconciliation of the beginning and ending amount of unrecognized tax benefits is not presented.

The Company does not have any unrecognized tax benefits as of October 31, 2024, and accordingly the Company’s effective tax rate will not be materially affected by unrecognized tax benefits

The following tax years remain open to examination by the Company’s principal tax jurisdictions:

United States:	2020 and all following years
Mexico:	2019 and all following years
Canada:	2020 and all following years

The Company has not identified any uncertain tax position for which it is reasonably possible that the total amount of unrecognized tax benefit will significantly increase or decrease within the next 12 months.

The Company’s policy is to classify tax related interest and penalties as income tax expense. There is no interest or penalties estimated on the underpayment of income taxes as a result of unrecognized tax benefits.

- Definition

The entire disclosure for income tax.

+ References

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+ Details

SILVER BULL RESOURCES, INC. 10-K