INCOME TAXES

12 Months Ended

Jul. 31, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 6 - INCOME TAXES

The Company files income tax returns in the U.S. federal jurisdiction, and state and local jurisdictions.

The Company follows ASC 740. Deferred income taxes reflect the net effect of (a) temporary difference between carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carry-forwards. No net provision for refundable Federal income tax has been made in the accompanying statements of operations because no recoverable taxes were paid previously. Similarly, no deferred tax asset attributable to the net operating loss carry-forward has been recognized, as it is not deemed likely to be realized.

The income tax benefit for the years ended July 31, 2022 and 2021 consists of the following: 

	For the Years Ended
	July 31,
	2022			2021
Loss before income tax	$	(247,743	)	$	(74,384	)
Tax rate		21%			21%
Income tax expense (benefit) at statutory rate	$	(52,026	)	$	(15,621	)
Change in valuation allowance		52,026			15,621
Income tax expense (benefit)	$	–		$	–

Deferred taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts recorded for tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows: 

	As of July 31,
	2022			2021
NOL Carryover	$	546,983		$	494,957
Valuation allowance		(546,983	)		(494,957	)
Net deferred tax asset	$	–		$	–

The reconciliation of the effective income tax rate to the U.S. federal statutory rate as of July 31, 2022 and 2021: 

	As of July 31,
	2022		2021
Federal income tax (benefit)		(21)%		(21)%
Increase in valuation allowance		21%		21%
Effective income tax rate		0%		0%

At July 31, 2022 and 2021, the Company had $2,604,680 and $2,356,937, respectively of the U.S. net operating losses (the “U.S. NOLs”), which begin to expire beginning in 2035. NOLs generated in tax years prior to July 31, 2018, can be carryforward for twenty years, whereas NOLs generated after July 31,2018 can be carryforward indefinitely.

The Company assesses the likelihood that deferred tax assets will not be realized. FASB ASC Topic 740, “Income Taxes” requires that a valuation allowance be established when it is “more likely than not” that all, or a portion of, deferred tax assets will not be realized. A review of all available positive and negative evidence needs to be considered, including the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies. After consideration of all the information available, management believes that uncertainty exists with respect to future realization of its deferred tax assets and has, therefore, established a full valuation allowance as of July 31, 2022 and 2021.

The Company has not completed its evaluation of NOL utilization limitation under IRC Section 382, change of ownership rules, but believes that it had a change of ownership that would limit the amount of U.S. NOLs that could be utilized each year based on the “Internal Revenue Code, as Amended.”

The Company’s tax returns are subject to examination by tax authorities beginning with the year ended July 31, 2018.