NOTE 5. INCOME TAXES
As of April 30, 2017, the Company had a federal net operating loss carryforward of approximately $1,265,000, which expires beginning in 2018 and through 2037. This carryforward is limited due to the changes in control that took place in the years ended April 30, 2008 and April 30, 2016 and maybe further limited in the future upon change(s) in control of the Company in accordance with the provisions under Internal Revenue Code Section 381.
In assessing the recovery of the deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. As of April 30, 2017, the Company determined it was more likely than not the deferred tax assets would not be realized and recorded a full valuation allowance.
The following table reconciles the provision (benefit) for taxes to the U.S. Federal statutory tax rates:
| Year Ended April 30, | ||||||||
| 2017 | 2016 | |||||||
| Statutory U.S. Federal Income Tax Rate | 35 | % | 35 | % | ||||
| State Income Taxes | 5 | % | 5 | % | ||||
| Change in Valuation Allowance | (40 | %) | (40 | %) | ||||
| Effective Income Tax Rate | 0 | % | 0 | % | ||||