The provision for income taxes for the years ended December 31, 2016 and 2015 is summarized as follows:
| 2016 | 2015 | |||||||||
| Current: | ||||||||||
| Federal | $ | – | – | |||||||
| State | – | – | ||||||||
| – | – | |||||||||
| Deferred: | ||||||||||
| Federal | – | – | ||||||||
| State | – | – | ||||||||
| $ | – | $ | – |
The Company has federal and state net operating loss carry forwards of approximately 50,653,000, which begin to expire 2025 and can be used to reduce future taxable income through 2034. The Company is open for tax years for the years ended 2008 through present.
The tax effects of temporary differences which give rise to deferred tax assets (liabilities) are summarized as follows:
| YEARS ENDED DECEMBER 31, | ||||||||
| 2016 | 2015 | |||||||
| Net operating loss carry-forwards | $ | (20,261,000 | ) | $ | (15,977,000 | ) | ||
| Stock based compensation – options/warrants | 3,540,000 | 3,267,000 | ||||||
| Stock issued for services | 971,000 | 971,000 | ||||||
| Gain on derivative instrument | (1,011,000 | ) | (489,000 | ) | ||||
| Disallowed entertainment expense | 56,000 | 52,000 | ||||||
| Charitable contribution limitation | 11,000 | 11,000 | ||||||
| Preferred Stock | 39,000 | 39,000 | ||||||
| Bad debt expense & reserves | 47,000 | 47,000 | ||||||
| Penalties | 1,000 | 1,000 | ||||||
| Loss on extinguishment of debt | 114,000 | 129,000 | ||||||
| Beneficial conversion features | 119,000 | 119,000 | ||||||
| Mobiquity-Spain – net loss | 830,000 | 695,000 | ||||||
| Impairment of long lived assets | 89,000 | 0 | ||||||
| Amortization of debt discount | 1,311,000 | 246,000 | ||||||
| Deferred Tax Assets | (14,144,000 | ) | (10,889,000 | ) | ||||
| Less Valuation Allowance | 14,144,000 | 10,889,000 | ||||||
| Net Deferred Tax Asset | $ | – | $ | – | ||||
A reconciliation of the federal statutory rate to the Company’s effective tax rate is as follows:
| YEARS ENDED DECEMBER 31, | ||||||||
| 2016 | 2015 | |||||||
| Federal Statutory Tax Rate | 34.00% | 34.00% | ||||||
| State Taxes, net of Federal benefit | 6.00% | 6.00% | ||||||
| Change in Valuation Allowance | (40.00% | ) | (40.00% | ) | ||||
| Total Tax Expense | 0.00% | 0.00% | ||||||