INCOME TAXES

12 Months Ended

Sep. 30, 2012

INCOME TAXES

INCOME TAXES

8. INCOME TAXES

For the period ended September 30, 2012, the Company has reported a profit $295,852 and will utilize a portion of its net operating loss carryforward to offset its tax liability, therefore, we have no tax liability. The net deferred tax asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is approximately $4,197,000 at September 30, 2012 and will expire beginning in the year 2026.

The provision for Federal income tax consists of the following for the periods ended September 30, 2012 and October 2, 2011:

Federal income tax benefit attributable to:		2012		2011
Current Operations	$	(100,590)	$	(91,663)
Valuation allowance		100,590		91,663
Net provision for Federal income taxes	$	0	$	0

The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:

Deferred tax asset attributable to:		2012		2011
Net operating loss carryover	$	1,427,200	$	1,527,790
Less: valuation allowance		(1,427,200		(1,527,790)
Net deferred tax asset	$	0	$	0

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $4,197,000 for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.