NOTE 4. INCOME TAXES
PhotoAmigo's deferred tax assets, valuation allowance, and change in valuation allowance are as follows:
| Period Ending | Estimated NOL carry-forward | NOL expires | Estimated tax benefit from NOL and other tax benefits (20%) | Valuation allowance | Change in valuation allowance | Net tax asset | ||||||||||||||||||
| July 31, 2016 | $ | 269,370 | 2036 | $ | 53,900 | $ | (5,700 | ) | $ | (5,700 | ) | $ | - | |||||||||||
| July 31, 2017 | $ | 288,985 | 2037 | $ | 57,800 | $ | (3,900 | ) | $ | (3,900 | ) | $ | - | |||||||||||
Income taxes at the statutory rate are reconciled to reported income tax expense (benefit) as follows:
| 2017 | 2016 | |||||||
| Income tax benefit at statutory rate | (20 | %) | (20 | %) | ||||
| Deferred income tax valuation allowance | 20 | % | 20 | % | ||||
| Reported tax rate | 0 | % | 0 | % | ||||
At this time, the Company is unable to determine if it will be able to benefit from its deferred tax asset. There are limitations on the utilization of net operating loss carry-forwards, including a requirement that losses be offset against future taxable income, if any. In addition, there are limitations imposed by certain transactions which are deemed to be ownership changes. Accordingly, a valuation allowance has been established for the entire deferred tax asset.