NOTE 12 – INCOME TAXES

The provision (benefit) for income taxes for the years ended December 31, 2016, and 2015, consists of the following:

The income tax provision differs from the amount of income tax determined by applying the U.S. federal and applicable state income tax rates to pretax income from continuing operations for the years ended December 31, 2016, and 2015, due to the following:

Net deferred tax liabilities consist of the following components as of December 31, 2016, and 2015:

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations.  If a change in ownership occurs, then net operating loss carryforwards may be limited as to use in future years.  At December 31, 2016, the Company had net operating loss carryforward of approximately $1,203,100 that may be offset against future taxable income from the year 2016 through 2032. The availability of some of the net operating loss will extend into 2035 if not previously utilized. During 2016, the Company evaluated its deferred tax assets and concluded that none of the asset is currently realizable and that a full valuation allowance should be recorded.  The valuation allowance decreased by $8,413,617 and leaves the Company with a net deferred tax asset of $«GNJGNX33|Tag=us-gaap:DeferredTaxAssetsLiabilitiesNet|Label=*»0 as of December 31, 2016.  

Included in the balance at December 31, 2015, are no tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.  Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.