NOTE 3–INCOME TAXES
The Company is subject to taxation in the United States and California. The benefit from income taxes for the years ended December 31, 2016 and 2015 are summarized below:
| 2016 | 2015 | |||||||
| Current: | ||||||||
| Federal | $ | - | $ | - | ||||
| State | - | - | ||||||
| Total current | - | - | ||||||
| Deferred: | ||||||||
| Federal | (12,116 | ) | (17,157 | ) | ||||
| State | - | - | ||||||
| Change in valuation allowance | 12,116 | 17,157 | ||||||
| Total deferred | - | - | ||||||
| Income tax provision (benefit) | $ | - | $ | - | ||||
At December 31, 2016, the Company had federal net operating loss carry forwards of approximately $95,084 which may be offset against future taxable income through 2036. No net deferred tax assets are recorded at December 31, 2016 or 2015, as all deferred tax assets and liabilities have been fully offset by a valuation allowance due to the uncertainty of future utilization.
At December 31, 2016 and 2015, deferred tax assets (liabilities) consist of the following:
| 2016 | 2015 | |||||||
| Net operating loss carry-forwards | $ | 27,287 | $ | 15,171 | ||||
| Other | - | - | ||||||
| Total deferred tax assets | 27,287 | 15,171 | ||||||
| Less: valuation allowance | (27,287 | ) | (15,171 | ) | ||||
| Net deferred tax assets | - | - | ||||||
The change in the valuation allowance during the year ended December 31, 2016 and 2015 was an approximate $12,000 increase and an approximate $15,000 decrease, respectively and a full valuation allowance has been recorded since, in the judgement of management, these net deferred tax assets are not more likely than not to be realized. The ultimate realization of deferred tax assets and liabilities is dependent upon the generation of future taxable income during periods in which those temporary differences and carryforwards become deductible or are utilized.
A reconciliation of the statutory federal income tax rate for the year ended December 31, 2016 and 2015 to the effective tax rate is as follows:
| 2016 | 2015 | |||||||
| Expected federal tax | 34.00 | % | 34.00 | % | ||||
| Valuation allowance | (34.00 | )% | (34.00 | )% | ||||
| Total | - | % | - | % | ||||
The Company follows FASB ASC 740-10, Uncertainty in Income Taxes. The Company recognizes interest and penalties associated with uncertain tax positions as a component of income tax expense. The Company does not have any unrecognized tax benefits or a liability for uncertain tax positions at December 31, 2016 and 2015. The Company does not expect to have any unrecognized tax benefits within the next twelve months. The Company recognizes accrued interest and penalties associated with uncertain tax positions, if any, as part of income tax expense. There were no tax related interest and penalties recorded for 2016 and 2015. Since the Company incurred net operating losses in every tax year since inception, all of its income tax returns are subject to examination and adjustments by the IRS for at least three years following the year in which the tax attributes are utilized.