INCOME TAXES

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Note 5. INCOME TAXES

At September 30, 2017, the Company had a net operating loss carry–forward for Federal income tax purposes of $780,537 that may be offset against future taxable income through 2032. 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 $265,383, calculated at an effective tax rate of 34%, was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are fully offset by a valuation allowance of $265,383.

	Net Loss		Permanent Differences		Taxable Loss
Year Ended
December 31, 2011	$	7,789	$	-	$	7,789
December 31, 2012		20,533,321		20,450,000		83,321
December 31, 2013		122,089		-		122,089
December 31, 2014		3,780,487		13,741,679		38,808
December 31, 2015		64,416		-		64,416
December 31, 2016		1,670,950		1,360,800		310,150
September 30, 2017		204,615		-		204,615
Estimated Loss carried forward	$	36,383,667	$	35,552,479	$	831,188
Tax rate						34	%
Potential Tax Benefit Carried Forward					$	282,604

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 realizability.

The Company has open tax periods, subject to IRS audit for the years 2013 through 2017.