Deferred Tax Assets

At June 30, 2017 and June 30, 2016, the Company had net operating loss (“NOL”) carry–forwards for Federal income tax purposes of approximately $87,000 and $103,000 that may be offset against future taxable income through 2037. No tax benefit has been recorded with respect to these net operating loss carry-forwards in the accompanying financial statements as the management of the Company believes that the realization of the Company’s net deferred tax assets of approximately $29,400 was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by the full valuation allowance.

Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realization. The valuation allowance decreased approximately $5,700 for the fiscal year ended June 30, 2017 and increased approximately $10,000 for the fiscal year ended June 30, 2016.

Components of deferred tax assets are as follows:

Income Tax Provision in the Statement of Operations

A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows:

Tax Returns Remaining subject to IRS Audits

The Company has not filed its corporation income tax return for the reporting period ended June 30, 2017. The Company’s corporation income tax returns for the reporting periods ended June 30, 2017, 2016 and 2015 will remain subject to audit under the statute of limitations by the Internal Revenue Service for a period of three (3) years from the date they are filed.

Ohio - Commercial Activity Tax (CAT)

The Commercial Activity Tax (CAT) is an annual tax imposed on the privilege of doing business in Ohio, measured by gross receipts from business activities in Ohio. Businesses with Ohio taxable gross receipts of $150,000.00 per calendar year are subject to the CAT tax. Such “taxable gross receipts”, include 1) gross rents and royalties from real property located in Ohio, and 2) gross receipts from the sale of real property located in Ohio. For calendar years 2006 and thereafter, the first $1 million in taxable gross receipts are taxed at $150, thereafter at a rate of 0.2600%. For tax years prior to December 31, 2013, there is an annual minimum tax (AMT) of $150.00. Since the Company has not had gross receipts for the periods ended June 30, 2017, 2016 and 2015, the CAT tax is not applicable to the Company for the periods indicated.