NOTE 5 – DEFERED INCOME TAX
The Company maintains deferred tax assets and liabilities that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The deferred tax assets at June 30, 2017 and 2016 consist of net operating loss carryforwards. The net deferred tax asset has been fully offset by a valuation allowance because of the uncertainty of the attainment of future taxable income. The items accounting for the difference between income taxes at the effective statutory rate and the provision for income taxes for the year ended June 30, 2017 and 2016 were as follows :
| Year Ended June 30 | ||||||||
| 2017 | 2016 | |||||||
| Income tax benefit at U.S. statutory rate of 35% | $ | 23,602 | $ | 18,577 | ||||
| Total provision for income tax | (23,602) | (18,577) | ||||||
| $ | - | $ | - | |||||
The Company’s approximate net deferred tax asset as of June 30, 2017 and 2016 was as follows:
| Deferred Tax Asset: | June 30, 2017 | June 30, 2016 | ||||||
| Net operating loss carryforward | $ | 67,437 | $ | 54,639 | ||||
| Valuation allowance | (67,437) | (54,639) | ||||||
| Net deferred tax asset | $ | - | $ | - | ||||
The net operating loss carryforward was $67,437 at June 30, 2017. The Company provided a valuation allowance equal to the deferred income tax asset for the year ended June 30, 2017 and 2016 because it was not known whether future taxable income will be sufficient to utilize the loss carryforward. The increase in the allowance was $18,577 in 2016. The potential tax benefit arising from the loss carryforward will expire in 2036 .
Additionally, the future utilization of the net operating loss carryforward to offset future taxable income may be subject to an annual limitation as a result of ownership changes that could occur in the future. If necessary, the deferred tax assets will be reduced by any carryforward that expires prior to utilization as a result of such limitations, with a corresponding reduction of the valuation allowance .
The Company does not have any uncertain tax positions or events leading to uncertainty in a tax position .
The Company's income tax rate computed at the statutory federal rate of 35%, applied to our Net Operating Loss of $67,437 provided a deferred tax credit of $23,602, which will begin to expire in 2031 unless utilized first. An allowance of $23,602 has been established, since it is more likely than not that some or all of the deferred tax credit will not be realized.