NOTE 9 – INCOME TAXES
The components of deferred tax assets consist of:
| December 31, 2016 | December 31, 2015 | ||||||
| Net operating loss | $ | 177,000 | $ | 10,000 | |||
| Valuation allowance |
|
| (177,000) |
|
| (10,000) | |
| Deferred Tax Assets, Net | $ | 0 | $ | 0 | |||
The reconciliation of the effective income tax rate to the federal statutory rate is as follows:
| December 31, 2016 | December 31, 2015 | |
| US Federal statutory rate | (35%) | (35%) |
| State income tax, net of federal benefit | (5%) | (5%) |
| Write-off of NOL's | 0% | 19% |
| Change in valuation allowance | 40% | 21% |
| -% | -% |
The Company has approximately $442,000 net operating loss carryforwards that are available to reduce future taxable income. These NOLs begin to expire in 2036. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against all of the deferred tax assets for every period because it is more likely than not that all of the deferred tax assets will not be realized.
The Company files U.S. federal and several state tax returns that are subject to audit by tax authorities beginning with the year ended December 31, 2012. The Company’s policy is to classify assessments, if any, for tax and related interest and penalties as tax expense.