8. INCOME TAXES

The income tax (provision) benefit for the six months and three months ended December 31, 2013 and 2012, are as follows:

	For the six months ended December 31,				For the three months ended December 31,
	2013		2012		2013		2012

Current
USA	$	-	$	(24,100)	$	-	$	100
China		-		-		-		-
		-		(24,100)		-		100
Deferred
USA		4,733		(55,000)		(17,767)		78,000
China		-		-		-		-
		4,733		(55,000)		(17,767)		78,000
Total	$	4,733	$	(79,100)	$	(17,767)	$	78,100

Deferred tax assets are comprised of the following:

	December 31,		June 30,
	2013		2013

Allowance for doubtful accounts (A)	$	301,000	$	301,000
Stock-based compensation		307,000		307,000
Net operating loss		580,000		443,000
Total deferred tax assets		1,188,000		1,051,000
Valuation allowance (A)		(1,069,200)		(945,900)
Deferred tax assets, net - long-term (A)	$	118,800	$	105,100

Note (A): Net balance was not significant, therefore, considered as part of long-term portion

Operations in the US have incurred a cumulative net operating loss of approximately $1,287,450 as of December 31, 2013, which may be available to reduce future taxable income. This carry-forward will expire if not utilized by 2034. Other deferred tax assets relating to the allowance for doubtful accounts, stock compensation expenses and net operating loss amounting to $301,000, $307,000 and $580,000 have been recorded respectively. 90% of the deferred tax assets balance has been provided as valuation allowance as of December 31, 2013 based on management’s estimate of realizability.