NOTE 8 – INCOME TAXES

Deferred taxes, estimated at 39% of taxable incomes, are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forward and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred 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 deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Net deferred tax assets consist of the following components as of July 31, 2017 and 2016:

A reconciliation of income taxes computed at the 39% statutory rate to the income tax recorded is as follows:

As of July 31, 2017, the Company did not pay any income taxes nor have they paid or accrued any taxes from inception through July 31, 2017.

The net federal loss carry forward will begin to expire in 2034. No tax benefit has been reported in the July 31, 2017 financial statements since the potential tax benefit is offset by a valuation allowance in the same amount. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual limitations. The Company has filed and extension for the year ended July 31, 2017 and anticipates filing the return within the extension period. All of the Company’s income tax years remained open for examination by taxing authorities.