The reported income taxes differ from the amounts obtained by applying statutory rates to the loss before income taxes as follows:
| August 31, 2017 | August 31, 2016 | |||||||
| Net loss | $ | (192,570 | ) | $ | (165,330 | ) | ||
| 35.0 | % | 35.0 | % | |||||
| Expected income tax recovery | (67,000 | ) | (58,000 | ) | ||||
| Adjustment to prior year provision versus statutory tax return | (46,000 | ) | 46,000 | |||||
| Change in valuation allowance | 113,000 | 12,000 | ||||||
| Income tax recovery | $ | - | $ | - | ||||
The Company’s tax-effected future tax assets and liabilities are estimated as follows:
| August 31, 2017 | August 31, 2016 | |||||||
| Deferred tax assets | ||||||||
| Net operating loss carry forwards | $ | 796,000 | $ | 683,000 | ||||
| Less: Valuation allowance | (796,000 | ) | (683,000 | ) | ||||
| Net deferred income tax assets | $ | - | $ | - | ||||
At August 31, 2017, the Company has a deferred tax asset. A full valuation allowance has been established as management believes it is more likely that not that the deferred tax asset will not be realized.
As at August 31, 2017, the Company has non-capital losses of approximately $2,275,000 that may be carried forward and applied against federal and state taxable income of future years. The non-capital losses may be carried forward and expire between 2027 and 2037.
Tax attributes are subject to review, and potential adjustment by tax authorities.