Note 8: Income Taxes
As of December 31, 2016, the Company had net operating loss carry forwards of approximately $11.5 million that may be available to reduce future years' taxable income through 12/31/2032. Future tax benefits, which may arise as a result of these losses, have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.
The provision for federal income tax consists of the following for the twelve months ended:
|
| December 31, 2016 |
| December 31, 2015 |
| ||||
| Federal income tax benefit attributable to: |
|
|
|
| ||||
| Current Operations |
| $ | 62,626 |
|
| $ | 3,295,702 |
|
| Less: valuation allowance |
|
| (62,626 | ) |
|
| (3,295,702 | ) |
| Net provision for Federal income taxes |
| $ | - |
|
| $ | - |
|
The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:
|
|
| December 31, 2016 |
|
| December 31, 2015 |
| ||
| Deferred tax asset attributable to: |
|
|
|
|
|
| ||
| Net operating loss carryover |
| $ | 3,917,473 |
|
| $ | 3,854,846 |
|
| Less: valuation allowance |
|
| (3,917,473 | ) |
|
| (3,854,846 | ) |
| Net deferred tax asset |
| $ | - |
|
| $ | - |
|
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of $11.5 million for federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, the net operating loss carry forwards may be limited as to use in future years.