INCOME TAXES

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements

Note 10. INCOME TAXES

Potential benefits of income tax losses and other tax assets are not recognized in the accounts until realization is more likely than not. As of March 31, 2012, the Company has net operating losses carried forward of $1,121,179 (December 31, 2011 – $1,022,465) for tax purposes in various jurisdictions subject to expiration as described below. Pursuant to ASC 740, Income Taxes, the Company is required to compute tax asset benefits for net operating losses carried forward and other items giving rise to deferred tax assets. Future tax benefits which may arise as a result of these losses and other items have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these items.

The actual income tax provisions differ from the expected amounts calculated by applying the combined income tax statutory rates applicable in each jurisdiction to the Company’s loss before income taxes and non-controlling interest. The components of these differences are as follows:

	As of March 31,
	2012			2011
Corporate income tax rate		34%			34%
Expected income tax (recovery)	$	(81,163	)	$	-
Goodwill impairment		-			-
Non-deductible finance costs and other		47,600			-
Change in valuation allowance		(33,563	)		-
State income tax net of federal benefit		-			-
Income tax provision	$	-		$	-

The Company’s tax-effected deferred income tax assets and liabilities are estimated as follows:

	March 31, 2012			December 31, 2011
Net operating loss carryforward	$	381,201		$	347,638
Total deferred tax assets		381,201			347,368
Less: Valuation allowance		(381,201	)		(347,368	)
Net deferred tax assets recognized	$	-		$	-

The Company has approximately $1,121,179 in net operating losses carried forward for United States income tax purposes which will expire, if not utilized, in 2030.