Income Taxes

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 4 - INCOME TAXES

Reconciliation between actual tax expense (benefit) and income taxes computed by applying the U.S. federal income tax rate and state income tax rate to income from continuing operations before income taxes is as follows:

	For the Year ended,
	December 31, 2013			December 31, 2012
Net Taxable Loss	$	(908,000	)	$	(1,708,000	)
Income tax computed at combined U.S. and state rates (30%)		(270,000	)		(510,000	)
Permanent differences
Changes in valuation allowance		270,000			510,000
Total	$	-		$	-

Tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred liabilities are presented below:

	As of December 31,
	2013			2012
Deferred tax assets:
Net operating loss carryforwards	$	4,770,000		$	4,500,000
Other tax attributes		1,930,000			1,930,000
Less valuation allowance		(6,700,000	)		(6,430,000	)
Total	$	-		$	-

At December 31, 2013, Surge had net operating loss carryforwards of approximately $15,200,000 for federal and approximately $12,200,000 2012 for state income tax purposes, which will begin to expire, if unused, beginning in 2021. The valuation allowance increased by approximately $270,000 and $510,000 in the years ended December 31, 2013 and 2012 respectively. Internal Revenue Code Section 382 rules may place annual limitations on the Company’s net operating loss carryforward on a change in ownership. The above estimates are based upon management’s decisions concerning certain elections which could change the relationship between net income and taxable income. Management decisions are made annually and could cause the estimates to vary significantly. Deferred taxes are provided on a liability method for taxable temporary differences resulting from reported amounts of assets and liabilities and their tax basis. Deferred tax assets have resulted from the Company’s net operating loss carry-forward, which has been reduced by an equal valuation allowance. Valuation allowance has been established based on the opinion of management that it is more likely than not that some portion or all of the deferred tax assets will not be realized. A substantial portion of the tax loss carryforward will not be available as a result of the change of control, which occurred in October 2012. The years from 2009 to 2013 are still open.