NOTE S – Income Taxes
For the three months ended December 31, 2016, the Company incurred net losses and therefore has no tax liability. The Company's net operating loss carry-forwards may be carried forward and can be used through the year 2036 to offset future taxable income. In the future, the cumulative net operating loss carry-forward for income tax purposes may differ from the cumulative financial statement loss due to timing differences between book and tax reporting.
The provision for Federal income tax consists of the following for the three months ended December 31, 2016:
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Income tax benefit attributable to: |
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Net loss |
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346,857 |
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Permanent differences |
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–– |
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Valuation allowance |
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(346,857) |
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Net provision for income tax |
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–– |
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The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows as of December 31, 2016:
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Deferred tax asset attributable to: |
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Net operating loss carryover |
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$ 3,085,784 |
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Valuation allowance |
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(3,085,784 |
) |
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Net deferred tax asset |
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–– |
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Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited as to use in future years.
The Company has identified the United States Federal tax returns as its “major” tax jurisdiction. The United States Federal return years 2010 through 2015 are still subject to tax examination by the United States Internal Revenue Service; however, we do not currently have any ongoing tax examinations. The Company is subject to examination and currently does not have any ongoing tax examinations.