Income Taxes
| a) | The income tax provision differsfrom the amount of income tax determined by applying the U.S. federal income tax rate to pretax income from continueing operations for the years ended January 31, 2016 and 2015: |
| 2016 | 2015 | |||||||
| Net (loss) before income taxes | $ | (18,812 | ) | $ | (30,271 | ) | ||
| Adjusted net loss for tax purposes | (18,812 | ) | (30,271 | ) | ||||
| Statutory rate | 34 | % | 34 | % | ||||
| (6,396 | ) | (10,292 | ) | |||||
| Valuation allowance | 6,396 | 10,292 | ||||||
| Provision for income taxes | $ | - | $ | - | ||||
| b) | Deferred taxes are provided on a liability method, whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temprorary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deffered tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deffered tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. |
Deferred Income Tax Assets
The tax effects of temporary differences that give rise to the deferred income tax assets at January 31, 2016 and 2015 are as follows:
| 2016 | 2015 | |||||||
| NOL Carryover | $ | 37,600 | $ | 31,200 | ||||
| Valuation Allowance | $ | 37,600 | $ | 31,200 | ||||
| c) | Cumulative Non-Capital Losses |
The Company has non-capital losses carried forward of approximately $110,664 available to reduce future years' taxable income. These losses will expire as follows:
| 2032 | $ | 566 | ||
| 2033 | 18,684 | |||
| 2034 | 42,331 | |||
| 2035 | 30,271 | |||
| 2036 | 18,812 | |||
| $ | 110,664 |
At January 31, 2016, the Company had net operating loss carryforwards of approximately $110,664 that may be offset against future taxable income for the year 2018 through 2036. No tax benefit from continuing or discontinued operations have been reported in the January 31, 2016 consolidated financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.
Due to change in ownership provisions of the Tax Reform Act of 1986, net operation loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.
The Company had no accruals for interest and tax penalties at January 31, 2016 and 2015.
The Company does not expect the amount of unrecognized tax benefits to materially change within the next twelve months.
The Company is required to file income tax returns in the U.S. and the state of Nevada.