NOTE 8 – INCOME TAXES

At May 31, 2017 and 2016, the Company had a federal operating loss carryforwards of approximately $487,000 and $282,000, respectively, which begins to expire in 2035.

Components of net deferred tax assets, including a valuation allowance, are as follows at May 31, 2017 and 2016:

The valuation allowance for deferred tax assets as of May 31, 2017 and 2016 was $170,000 and $99,000, respectively, which will begin to expire in 2035.  In assessing the recovery of the deferred tax assets, management 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.  Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment.  As a result, management determined it was more likely than not the deferred tax assets would not be realized as of May 31, 2017 and 2016 and maintained a full valuation allowance.

Reconciliation between the statutory rate and the effective tax rate is as follows at May 31, 2017 and 2016: