NOTE 4 - INCOME TAXES
There was no income tax expense for the periods ended December 31, 2017 and 2016 due to the Company’s net losses.
The components of the Company's net deferred tax asset is as follows:
|
| December 31, 2017 | December 31, 2016 | |||
| Deferred tax asset | |||||
| Federal net operating loss carryforward | $ | 31,500 |
| $ | 33,992 |
| Total deferred tax assets |
| 31,500 |
|
| 33,992 |
| Deferred tax liability |
| - |
|
| - |
| Net deferred tax asset |
| 31,500 |
|
| 33,992 |
| Valuation allowance |
| (31,500) |
|
| (33,992) |
| DEFERRED TAX ASSET | $ | - |
| $ | - |
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Deferred income taxes arise from timing differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. A deferred tax asset valuation allowance is recorded when it is more likely than not that deferred tax assets will not be realized. As management of the Company cannot determine that it is more likely than not that the Company will realize the benefit of the net deferred tax asset, a valuation allowance equal to 100% of the net deferred tax asset has been recorded at December 31, 2017 and 2016.
On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the “Act”) resulting in significant modifications to existing law. The Company has completed the accounting for the effects of the Act during the quarter ended December 31, 2017. The Company’s financial statements for the year ended December 31, 2017 reflect certain effects of the Act which includes a reduction in the corporate tax rate from 35% to 21% as well as other changes. As a result of the changes to tax laws and tax rates under the Act, the Company incurred incremental income tax expense of $21,070 during the year ended December 31, 2017, which consisted primarily of the remeasurement of its deferred tax asset from 35% to 21%.
A reconciliation between the statutory federal income tax rate and the Company's tax provision is as follows:
|
| December 31, 2017 |
| December 31, 2016 | |||||||
| Amount computed using the statutory rate | $ | (18,578) |
| (35%) |
| $ | (17,334) |
| (35%) | |
| Effect of change in the statutory rate |
| 21,070 |
|
| 40% |
|
| - |
| - |
| Non-recognition due to increase in valuation account |
| (2,492 |
|
| (5%) |
|
| 17,334 |
| 35% |
| Total income tax benefit | $ | - |
|
| -% |
| $ | - |
| -% |
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At December 31, 2017, the Company had cumulative federal and state net operating loss carry forwards of approximately $150,200 which will expire in fiscal years ending December 31, 2029 through December 31, 2032.
The Company does not have an accrual for uncertain tax positions as December 31, 2017 or 2016. If interest and penalties were to be assessed, the Company would charge interest to interest expense and penalties to other operating expense. It is not anticipated that unrecognized tax benefits would significantly increase or decrease within 12 months of the reporting date. Fiscal years starting December 31, 2015 through December 31, 2017 are open to examination by federal and state taxing agencies.