NOTE 6 - INCOME TAXES
At December 31, 2017 and 2016, the Company had available unused net operating loss carryforwards of approximately $325,392 and $299,148, respectively, which may be applied against future taxable income and which expire in various years from 2024 through 2037. Due to a substantial change in the Company’s ownership during June 2006, there will be an annual limitation on the amount of previous net operating loss carryforwards that can be utilized.
The amount of and ultimate realization of the benefits from the net operating loss carryforwards for income tax purposes is dependent, in part, upon the tax laws in effect, the future earnings of the Company, and other future events, the effects of which cannot be determined. Because of the uncertainty surrounding the realization of the net operating loss carryforwards, the Company has established a valuation allowance equal to the tax effect of the net operating loss carryforwards and, therefore, no deferred tax asset has been recognized for the net operating loss carryforwards. The net deferred tax assets are approximately $68,332 and $44,782 as of December 31, 2017 and 2016, respectively, with an offsetting valuation allowance of the same amount resulting in a change in the valuation allowance of approximately $(23,460) during the year ended December 31, 2017.
The Company has evaluated Staff Accounting Bulletin No. 118 regarding the impact of the decreased tax rates of the Tax Cuts & Jobs Act. The schedules below reflect the Federal tax provision, deferred tax asset and valuation allow using the new rates adjusted in the period of enactment.
Deferred tax assets and the valuation account are as follows:
| For the Years Ended December 31, | ||||||||
| 2017 | 2016 | |||||||
| Net operating loss carryforward (at 21% and 15%) | $ | 68,332 | $ | 44,872 | ||||
| Valuation allowance | (68,332 | ) | (44,872 | ) | ||||
| Deferred tax asset | $ | 0 | $ | 0 | ||||
A reconciliation of amounts obtained by applying the indicated Federal tax rates to pre-tax income to income tax benefit is as follows:
| For the Years Ended December 31, | ||||||||
| 2017 | 2016 | |||||||
| Federal tax benefit (at 21% and 15%) | $ | 5,511 | $ | 4,015 | ||||
| Change in valuation allowance | (23,460 | ) | (4,015 | ) | ||||
| Effect of rate change on Deferred Tax Asset | 17,949 | 0 | ||||||
| $ | 0 | $ | 0 | |||||
The Company did not have any tax positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease with the next 12 months.
The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operations in the provision for income taxes. As of December 31, 2017 and 2016 the Company had no accrued interest or penalties related to uncertain tax positions.
The tax years that remain subject to examination by major taxing jurisdictions are those for the years ended December 31, 2016, 2015 and 2014.