Lionheart Acquisition Corp. II Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

INCOME TAX

INCOME TAX

12 Months Ended

Dec. 31, 2020

INCOME TAX

INCOME TAX

NOTE 8 —INCOME TAX

The Company’s net deferred tax assets (liability) at December 31, 2020 and 2019 are as follows:


	December 31,		December 31,
	2020		2019
Deferred tax assets (liability)
Net operating loss carryforward	$	306,991	$	210
Total deferred tax assets		306,991		210
Valuation Allowance		(306,991)		(210)
Deferred tax assets (liability)	$	—	$	—

The income tax provision for the year ended December 31, 2020 and for the period from December 23, 2019 (inception) through December 31, 2019 consists of the following:


	December 31, 2020		December 31, 2019
Federal
Current	$	—	$	—
Deferred		(306,781)		(210)
State and Local
Current		—		—
Deferred		—		—
Change in valuation allowance		306,781		210
Income tax provision	$	—	$	—

As of December 31, 2020 and 2019, the Company had $1,461,863 and $1,000 of U.S. federal and state net operating loss carryovers available to offset future taxable income, respectively.

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, the change in the valuation allowance was $306,781. For the period from December 23, 2019 (inception) through December 31, 2019, the change in the valuation allowance was $210.

A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2020 and 2019 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	—		—
Valuation allowance	(21.0)		(21.0)
Income tax provision	0.0	%	0.0	%

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..

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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