NOTE 5. INCOME TAXES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOTE 5. INCOME TAXES |
Deferred income taxes arise from the temporary differences between financial statement and income tax recognition of net operating losses. These loss carryovers are limited under the Internal Revenue Code should a significant change in ownership occur.
At December 31, 2014 and 2015 the Company had net operating loss carry forwards of approximately $6,383,000 and $7,048,000 respectively, that may be offset against future taxable income, if any, ratably through 2035. These carry-forwards are subject to review by the Internal Revenue Service.
The deferred tax asset of at each date of $1,277,000 and $1,410,000 created by the net operating losses has been offset by a 100% valuation allowance because the likelihood of realization of the tax benefit cannot be determined. The change in the valuation allowance in 2014 and 2015 was $123,000 and $133,000.
The effects of temporary differences that gives rise to significant portions of deferred tax assets at December 31, 2015 and 2014 are as follows:
There is no current or deferred tax expense for the years ended December 31, 2015 and 2014. The Company has not filed tax returns however management believes there are no taxes due as of December 31, 2014 and 2015.
There was no Federal income tax expense for the years ended December 31, 2015 and 2014 due to the Company's net losses. For the years ended December 31, 2015 and 2014 state income tax expense was zero.
The company includes interest and penalties arising from the underpayment of income taxes in the consolidated statements of operations in general and administrative expenses.
The tax years that remain subject to examination by major taxing jurisdictions are those for the tax year of 2015, 2014, and 2013. |
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