6.             Income Taxes:

 

The costs incurred related to the conduct of FDA approved clinical trials incurred directly by Dr. Burzynski within his medical practice are deducted by Dr. Burzynski and are not included in the Company’s tax provision.

 

The actual income tax benefit attributable to the Company’s losses for the years ended February 28, 2017 and February 29, 2016 differ from the amounts computed by applying the U.S. federal income tax rate of 34% to the pretax loss as a result of the following:

 

 

The components of the Company’s deferred income tax assets as of February 28, 2017 and February 29, 2016 are as follows:

 

 

The Company’s ability to utilize net operating loss carryforwards and alternative minimum tax credit carryforwards will depend on its ability to generate adequate future taxable income.  The Company has no historical earnings on which to base an expectation of future taxable income.  Accordingly, a valuation allowance for the total deferred tax assets has been provided.

 

The Company has net operating loss carryforwards available to offset future income in the amount of $587,056 as of February 28, 2017.  The net operating loss carryforwards expire as of February 28 or 29 of the following years:

 

 

In addition, the Company has alternative minimum tax credit carryforwards of $42,603 at February 28, 2017.