As of November 30, 2017, the Company had net operating loss carry forward of $87,762. This amount may be available to reduce future years’ taxable income. The income tax benefit differs from the amount computed by applying the US federal income tax rate of 35% to net loss before income taxes. As at November 30, 2017 and 2016, the Company had no uncertain tax positions.
For the year ended November 30, 2017 |
For the year ended November 30, 2016 |
|||||||
| Net income (loss) before taxes | $ | (57,286 | ) | $ | 45,632 | |||
| Statutory rate | 35 | % | 35 | % | ||||
| Computed expected tax recovery | $ | 20,050 | $ | (15,971 | ) | |||
| Change in valuation allowance | (20,050 | ) | 15,971 | |||||
| Income tax provision | $ | – | $ | – | ||||
The significant components of deferred income tax assets and liabilities as at November 30, 2017 and 2016 after applying enacted corporate income tax rates are as follows:
As of November 30, 2017 |
As of November 30, 2016 |
|||||||
| Deferred tax asset: | ||||||||
| Net operating tax carry-forward | $ | 30,716 | $ | 26,637 | ||||
| Other | - | - | ||||||
| Gross deferred tax asset | 30,716 | 26,637 | ||||||
| Valuation allowance | (30,716 | ) | (26,637 | ) | ||||
| Net deferred tax asset | $ | - | $ | - | ||||
Realization of deferred tax asset is dependent upon sufficient future taxable income during the period that deductible temporary differences and carry-forward is expected to be available to reduce taxable income. As the achievement of required future taxable income is uncertain, the Company recorded a valuation allowance.
Reconciliation between statutory rate and the effective tax rate for both periods and as of November 30, 2017 and 2016:
| Federal statutory rate | (35.0 | )% | ||
| State taxes, net of federal benefit | (0.00 | )% | ||
| Change in valuation allowance | 35.0 | % | ||
| Effective tax rate | 0.0 | % |