Registration of securities issued in business combination transactions

Income Tax

v3.21.1
Income Tax
 12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
Income Tax
NOTE 11 — INCOME TAX
The Company’s net deferred tax assets are as follows:
 
    
December 31,
  
    
2020
     
2019
  
Deferred tax assets
                  
Net operating loss carryforward
    $ 290,402      $ —    
Unrealized (gain) loss on marketable securities
      (7,818 )       1,361  
    
 
 
     
 
 
  
Total deferred tax assets
      282,584        1,361  
Valuation Allowance
      (282,584 )       —    
    
 
 
     
 
 
  
Deferred tax assets, net valuation allowance
    $ —        $ 1,361  
    
 
 
     
 
 
  
The income tax provision consists of the following:
 
    
As of December 31,
  
    
2020
     
2019
  
Federal
                  
Current
    $ —        $ 94,636  
Deferred
      (281,223 )       (1,361 ) 
State and Local
                  
Current
      —          —    
Deferred
      —          —    
Change in valuation allowance
      282,584        —    
    
 
 
     
 
 
  
Income tax provision
    $ 1,361      $ 93,275  
    
 
 
     
 
 
  
 
As of December 31, 2020 and 2019, the Company had $1,382,869 and $0 of U.S. federal and state net operating loss carryovers available to offset future taxable income.
In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the year ended December 31, 2020 and 2019, the change in the valuation allowance was $282,584 and $0.
A reconciliation of the federal income tax rate to the Company’s effective tax rate is as follows:
 
    
December 31,
2020
    
December 31,
2019
  
Statutory federal income tax rate
      21.0 %      21.0 % 
State taxes, net of federal tax benefit
      0.0 %      0.0 % 
Change in fair value of warrant
liability
      (19.2 )%      (20.7 )% 
Transaction costs allocable to warrant 
liabilities
      0.0 %      (1.7 )% 
Valuation allowance
      (1.9 )%      0.0 % 
    
 
 
    
 
 
  
Income tax provision
      (0.1 )%      (1.4 )% 
    
 
 
    
 
 
  
The Company files income tax returns in the U.S. federal jurisdiction and is subject to examination by the various taxing authorities. The Company’s tax returns since inception remain open to examination by the taxing authorities.