INCOME TAXES

12 Months Ended

Oct. 31, 2021

INCOME TAXES

NOTE 4 - INCOME TAXES

NOTE 4 - INCOME TAXES

The Company follows Accounting Standards Codification 740, Accounting for Income Taxes. During 2009, there was a change in control of the Company.

Under section 382 of the Internal Revenue Code such a change in control negates much of the tax loss carry forward and deferred income tax. Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carry forwards. For federal income tax purposes, the Company uses the accrual basis of accounting, the same that is used for financial reporting purposes.

The Company’s deferred tax assets for the U.S. parent company and its US subsidiary consisted of the following as of October 31, 2021, and 2020:

	2021			2020
Income/(Loss) Before Income Taxes	$	(262,983	)	$	(109,561	)
Income Tax Recovery		(55,226	)		(23,008	)
Valuation Allowance		55,226			23,008
	$	--		$	--
Net Operating Losses	$	2,466,386		$	2,203,403
Tax Rate		21	%		21	%
Deferred Tax Assets		517,941			462,715
Valuation Allowance		(517,941	)		(462,715	)
Net Deferred Tax Assets	$	-		$	-

The US companies had a net loss of $262,983, and $109,561 for the years ended October 31, 2021 and 2020, respectively. As of October 31, 2021, the US Companies had a net operating loss carry forward of $2,466,386 which can be used to offset future taxable income. Beginning December 31, 2020, 80% of the qualified net operating loss can be carried forward and applied against future net income.

A reconciliation of income taxes at the federal statutory rate to amounts provided for the years ended October 31, 2021 and 2020 is as follows:

	2021			2020
U.S. federal statutory rate		21	%		21	%
Net operating loss	(21		)%	(21		)%
Effective tax rate	--		%	--		%

The US Companies due to their loss have not filed US Corporate tax returns and is subject to examination back to October 31, 2012.

The Company’s deferred tax assets for the Canadian subsidiary companies consisted of the following as of October 31, 2021, and 2020:

	2021			2020
Income/(Loss) Before Income Taxes	$	24,572		$	7,583
Income Tax Expense		6,512			2,009
Valuation Allowance		(6,512	)		(2,009	)
	$	--		$	--
Net Operating Losses	$	59,050		$	76,039
Tax Rate		26.5	%		26.5	%
Deferred Tax Assets		15,648			20,150
Valuation Allowance		(15,648	)		(20,150	)
Net Deferred Tax Assets	$	--		$	--

The Canadian Companies had net income of $24,572 and $ 7,583 for the years ended October 31, 2021 and 2020, respectively. As of October 31, 2021, the Company had a net operating loss carry forward of $76,039 which can be used to offset future taxable income. The carry forwards will begin to expire in 2038, or twenty years after the loss is first incurred, if not used prior to that date.

A reconciliation of income taxes at the federal statutory rate to amounts provided for the years ended October 31, 2021 and 2020 is as follows:

	2021			2020
Canadian federal statutory rate		26.5	%		26.5	%
Net operating loss		(26.5	)%		(26.5	)%
Effective tax rate		--	%		--	%

The Canadian Companies have filed corporate tax returns through October 31, 2020 and returns since 2014 are open to examination.

During the years ended October 31, 2021 and 2020 Cogent received tax refunds of $25,901and $16,004, respectively. The refunds are received under a scientific research and development program.