NOTE 10 - INCOME TAXES
The reported income taxes differ from the amounts obtained by applying statutory rates to the loss before income taxes as follows:
|
| May 31, 2017 |
| May 31, 2016 | ||
| Net loss | $ | (1,249,446) |
| $ | (2,139,137) |
| Statutory tax rate |
| 34% |
|
| 34% |
| Expected income tax recovery |
| (425,000) |
|
| (727,000) |
| Permanent differences and other |
| 40,000 |
|
| 305,000 |
| Effect of foreign exchange |
| (1,000) |
|
| - |
| Change in valuation allowance |
| 386,000 |
|
| 422,000 |
| Income tax recovery | $ | -- |
| $ | -- |
The Company’s tax-effected future income tax assets and liabilities are estimated as follows:
|
| May 31, 2017 |
| May 31, 2016 | ||
| Deferred income tax assets (liabilities) |
|
|
|
|
|
| Losses carried forward | $ | 1,035,000 |
| $ | 693,000 |
| Equipment |
| 50,000 |
|
| 8,000 |
| Less: Valuation allowance |
| (1,085,000) |
|
| (701,000) |
| Net deferred income tax assets | $ | -- |
| $ | -- |
At May 31, 2017 and 2016, the Company has recorded a valuation allowance for the aggregate of its tax assets as management believes it is more likely than not that the deferred tax asset will not be realized.
As at May 31, 2017, the Company had net operating loss carry forwards in the United States of approximately $2,042,000 to reduce future federal and state taxable income. These losses expire commencing in 2030 and until 2037.
As at May 31, 2017, the Company also had non-capital loss carry forwards of approximately $8,000 to reduce future Canadian taxable income. These losses expire in 2037.
The Company is not currently subject to any income tax examinations by any tax authority. Should a tax examination be opened, management does not anticipate any tax adjustments, if accepted, that would result in a material change to its financial position.