Entity information:
NOTE 7 - INCOME TAXES

The income taxes provision for the year ended December 31, 2016 consists of current income taxes of $29,524 and over-accrued federal taxes from 2015 of $2,194.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets at December 31, 2016 and 2015 are presented below:

 
  
Year Ended December 31,
  
 
  
2016
    
2015
  
Net operating loss
  
$
-
    
$
-
  
Settlement loss deductible in future years
    
-
      
8,568
  
(State expense)/Benefit
    
-
      
(601
)
Total deferred tax assets
    
-
      
7,967
  
(Valuation allowance)/Reversal of valuation allowance
    
-
      
(7,967
)
Net deferred tax assets
  
$
-
    
$
-
  

At December 31, 2016 and 2015, deferred tax assets were immaterial. 

The reconciliation of federal statutory income tax rate to the Company’s effective income tax rate is as follows:

 
  
Year Ended December 31,
  
 
  
2016
    
2015
  
 
            
Income tax at U.S. statutory rate (34%)
  
$
31,856
    
$
112,958
  
State tax
    
5,466
      
29,369
  
Prior period under-accrual (over-accrual)
    
(2,194
)
    
(14,305
)
Nondeductible expenses
    
9,185
      
8,668
  
Change in valuation allowance
    
(7,290
)
    
(64,940
)
 
  
$
37,023
    
$
71,750
  

Uncertain Tax Positions

Interest associated with unrecognized tax benefits is classified as income tax and penalties are included in selling, general and administrative expenses in the statements of operations and comprehensive income.

For the year ended December 31, 2016 and 2015, the Company had no unrecognized tax benefits and related interest and penalties expenses. Currently, the Company is not under examination by major tax jurisdictions.