Note 7. INCOME TAXES
The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences are as follows:
| Income tax provision at the federal statutory rate | 15 | % | ||
| Effect of operating losses | (15 | )% | ||
| 0 | % |
At December 31, 2016, the Company has a net operating loss carryforward of approximately $493,326 for Federal and state purposes. This loss will be available to offset future taxable income. If not used, this carryforward will begin to expire in 2034. The deferred tax asset relating to the operating loss carryforward has been fully reserved at December 31, 2016 and 2015. The principal difference between the operating loss for income tax purposes and reporting purposes is disallowed meals and entertainment and a temporary difference in depreciation expense.