Note 11 - Income Taxes

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note

1

1

:

      Income Taxes     

The Company files federal and state income tax returns on a calendar year basis. The net deferred tax liability in the accompanying balance sheets includes the following components at

December 31, 2018

and

2017:

	2018			2017
Deferred tax assets		-			-
Deferred tax liabilities		(187,664	)		(187,664	)
	$	(187,664	)	$	(187,664	)

Reconciliations between the United States Federal statutory income tax provision, using the statutory rate of

21%

and

34%,

respectively, and the Company’s provision for income taxes at

December 31, 2018

and

2017

are as follows:

	2018			2017
Income tax on income before extraordinary item:
Tax at statutory rates	$	307,830		$	199,270
Tax effect of the following:
Statutory depletion		(18,175	)		(29,994	)
Section 179 deduction		(1,149	)		-
State income tax		62,137			12,475
Other		-			(7,272	)
Income tax on income	$	350,643		$	174,479

The income tax on income for

2018

is slightly different from the stated income tax expense on the statement of operations due to penalties being grouped with income tax expense.

Deferred income taxes payable results from timing differences in the recognition of revenue and expenses for tax and financial statement purposes. The effect of these timing differences at

December 31, 2018 

and

2017

 is as follows:

	2018			2017
Casualty loss	$	(77,714	)	$	(77,714	)
Deferred gain		(109,950	)		(109,950	)
	$	(187,664	)	$	(187,664	)

On

December 22, 2017,

H.R.

1,

also known as the Tax Cuts and Jobs Act (the

“2017

Tax Act”), was enacted. This enactment resulted in a number of significant changes to U.S. federal income tax law for U.S. corporations. Most notably for the Company, the statutory U.S. federal corporate income tax rate was changed from

35%

to

21%

for corporations. 

The Company files income tax returns for federal and state purposes. Generally, the Company’s tax returns remain open for

three

years for tax examination purposes. Tax positions are recognized when they are more likely than

not

to be sustained upon examination. The amount recognized is measured as the largest amount of benefit that is more likely than

not

to be realized upon settlement. The Company is subject to periodic audits by the Internal Revenue Service and other state and local taxing authorities. These audits

may

challenge certain of the Company’s tax positions such as timing and amount of income and deductions and the allocation of taxable income to various tax jurisdictions. The Company evaluates its tax positions and establishes liabilities if significant in accordance with the applicable accounting guidance on uncertainty in income taxes. There were

no

uncertain tax positions as of

December 31, 2018.