Income Taxes.

12 Months Ended

Dec. 31, 2012

Notes

Income Taxes.

NOTE 9 INCOME TAXES

For the years ended December 31, 2012 and 2011, the Company has incurred net losses and, therefore, has 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 $1,068,000 at December 31, 2012, and will begin to expire in the year 2026.

The provision for Federal income tax consists of the following at December 31:

	2011	2012
Federal income tax attributable to:
Current operations	$ 305,000	$ 374,000
Less: valuation allowance	(305,000)	(374,000)

The cumulative tax effect at the expected rate of 35% of significant items comprising our net deferred tax amount is as follows:

	2011	2012
Deferred tax asset attributable to:
Net operating loss carryover	$ 305,000	$ 374,000
Less: valuation allowance	(305,000)	(374,000)
Net deferred tax asset	$ --	$ --

The valuation allowance increased by $69,000 and $39,000 in the years 2012 and 2011, respectively.

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards 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.