Entity information:
Note
3.
      Income Taxes     
 
The Company files federal and state income tax returns on a calendar year basis.
 
The net deferred tax liability in the accompanying balance sheets includes the followin
g components at
December 31, 2017
and
2016:
 
   
2017
    
2016
  
Deferred tax assets
   $
--
     $
--
  
Deferred tax liabilities
    
(187,664
 )    
(298,919
 )
    $
(187,664
 )   $
(298,919
 )
 
Reconciliation
s between the United States Federal statutory income tax provision, using the statutory rate of
34%,
and the Company’s provision for income taxes at
December 31, 2017
and
2016
are as follows:
 
   
2017
    
2016
  
Income tax on income before extraordinary item:
                
Tax at statutory rates
   $
199,270
     $
75,586
  
Tax effect of the following:
                
Statutory depletion
    
(29,994
 )    
(24,936
 )
Section 179 deduction
    
 
      
(5,229
 )
State income tax
    
12,475
      
808
  
Other
    
(7,272
 )    
(744
 )
Income tax on income
   $
174,479
     $
45,485
  
 
Deferred income taxes result from timing differences in the recognition of revenue and expenses for tax and financial statement purposes. The effect of these timing differences at
December 31,
2017
 and
2016
 is as follows:
 
   
2017
    
2016
  
Casualty loss
   $
(77,714
 )   $
(121,239
 )
Deferred gain
    
(109,950
 )    
(171,528
 )
Section 179 deduction
    
--
      
(6,152
 )
    $
(187,664
 )   $
(298,919
 )
 
The decrease to net deferred tax liabilities of
$111,255
is directly related to the
2017
Tax Act.
On
December 22, 2017,
H.R.
1,
also known as the Tax Cuts and Jobs Act (the
“2017
Tax Act”), was enacted. This enactment resulted in a number of significant changes to U.S. federal income tax law for U.S. corporations. Most notably for the Company, the statutory U.S. federal corporate income tax rate was changed from
35%
to
21%
for corporations.