Entity information:

NOTE 6 – INCOME TAXES

 

The Company provides for income taxes under ASC 740, “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

 

The provision for refundable federal income tax at 34% for the period ended December 31, 2016, and December 31, 2015, consisted of the following:

 

 

 

Years ended

 

 

 

December 31,

 

 

 

2016

 

 

2015

 

 

 

 

 

 

 

 

Current operations

 

$47,660

 

 

$24,351

 

Less: valuation allowance

 

 

(47,660)

 

 

(24,351)

Net refundable amount

 

$-

 

 

$-

 

 

The reconciliation of the effective income tax rate to the federal statutory rate is as follows:

 

Federal income tax rate

 

34.0

%

Increase in valuation allowance

 

(34.0

%)

Effective income tax rate

 

0.0

%

 

Utilization of the NOL carry forwards, of approximately $211,795 for federal income tax reporting purposes, which begin to expire 2035, may be subject to an annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"). These ownership changes may limit the amount of the NOL carry forwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an "ownership change" as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders.