Deferred Tax Assets and Income Tax Provision

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Deferred Tax Assets and Income Tax Provision

Note 5 – Deferred Tax Assets and Income Tax Provision

Deferred Tax Assets

At December 31, 2018, the Company had net operating loss (“NOL”) carry–forwards for Federal income tax purposes of $45,000 that may be offset against future taxable income through 2037. No tax benefit has been reported with respect to these net operating loss carry-forwards in the accompanying financial statements because the Company believes that the realization of the Company’s net deferred tax assets of approximately $45,000 was not considered more likely than not and accordingly, the potential tax benefits of the net operating loss carry-forwards are fully offset by a full valuation allowance.

On September 12, 2018, the Company believes that an “ownership change” has occurred within the meaning of Sections 382 and 383 of the Code. An ownership change is generally defined as a more than 50 percentage point increase in equity ownership by “5 percent shareholders” (as that term is defined for purposes of Sections 382 and 383 of the Code) in any three-year period or since the last ownership change if such prior ownership change occurred within the prior three-year period. As a result of the ownership change on September 12, 2018, the limitations on the use of pre-change losses and other carry forward tax attributes in Sections 382 and 383 of the Code apply and the Company will not be able to utilize any portion of their NOL carry forwards from the years prior to December 31, 2017 and the portion of the NOL for 2018 allocable to the portion of the year prior to September 12, 2018. The utilization of the NOL for 2018 allocable to the portion of the year after September 12, 2018 and the NOLs from subsequent years should not be affected by the ownership change on the September 12, 2018.

Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realization. The valuation allowance decreased approximately $116,000 and $91,000 for the reporting period ended December 31, 2018 and 2017, respectively.

Components of deferred tax assets are as follows as of December 31,:

	2018			2017
Net deferred tax assets – Non-current:
Expected income tax benefit from NOL carry-forwards	$	45,000		$	161,000
Less valuation allowance		(45,000	)		(161,000	)
Deferred tax assets, net of valuation allowance	$	-		$	-

Income Tax Provision in the Statements of Operations

A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows for the years ended December 31,:

	2018			2017
Federal statutory income tax rate		21.0	%		21.0	%
Change in valuation allowance on net operating loss carry-forwards		(21.0	)		(21.0	)
Effective income tax rate		0.0	%		0.0	%