A reconciliation of the expected income tax recovery computed by applying the statutory United States federal income tax rates of 35% to income (loss) before taxes is as follows:
| July 31, 2017 | July 31, 2016 | |||||||
| Income tax recovery at statutory rate | $ | (26,610 | ) | $ | (20,190 | ) | ||
| Permanent differences | 6,300 | 6,300 | ||||||
| Change in valuation allowance | 20,310 | 13,890 | ||||||
| Provision for income taxes | $ | – | $ | – | ||||
The components of the net deferred income tax asset at July 31, 2017 and 2016 consist of:
| July 31, 2017 | July 31, 2016 | |||||||
| Accumulated net operating loss carry-forwards | $ | 162,080 | $ | 141,770 | ||||
| Valuation allowance | (162,080 | ) | (141,770 | ) | ||||
| Net deferred income tax asset | $ | – | $ | – | ||||
At July 31, 2017, the Company has net operating loss carry-forwards of approximately $463,090 which expire between fiscal 2028 and 2037. Pursuant to ASC 740, Income Taxes, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefit of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.
Current United States income tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited under IRC 382 of the Internal Revenue Code.