5. Income Taxes:

The costs incurred related to the conduct of FDA approved clinical trials incurred directly by Dr. Burzynski within his medical practice are deducted by Dr. Burzynski and are not included in the Company’s tax provision.

The actual income tax benefit attributable to the Company’s losses for the years ended February 28, 2019 and 2018 differ from the amounts computed by applying the U.S. federal income tax rate of 21% to the pretax loss as a result of the following:


	2019		2018
Expected benefit	$	(343,921)	$	(338,541)
Effect of expenses deducted directly by Dr. Burzynski		343,921		338,541
Other adjustments		(16,579)		(60,630)
Change in valuation allowance		16,579		60,630
Income tax expense	$	—	$	—

The components of the Company’s deferred income tax assets as of February 28, 2019 and 2018 are as follows:


	2019		2018
Deferred tax assets:
Net operating loss carryforwards	$	155,548	$	138,969
Alternative minimum tax credit carryforwards		42,603		42,603
Total deferred tax assets		198,151		181,572
Less valuation allowance		(198,151)		(181,572)
Net deferred tax assets	$	—	$	—

The Company’s ability to utilize net operating loss carryforwards and alternative minimum tax credit carryforwards will depend on its ability to generate adequate future taxable income. The Company has no historical earnings on which to base an expectation of future taxable income. Accordingly, a valuation allowance for the total deferred tax assets has been provided.

The Company has net operating loss carryforwards available to offset future income in the amount of $661,756 as of February 28, 2019. The net operating loss carryforwards expire as of February 28 or 29 of the following years:


2022	$	29,250
2023	$	73,401
2024	$	69,394
2025	$	13,475
2026	$	46,972
2027	$	31,220
2028	$	7,737
2029	$	31,868
2030	$	—
2031	$	—
2032	$	—
2033	$	207,097
2034	$	76,643
2035	$	—
2036	$	—
2037	$	74,699

As a result of the Tax Cuts and Jobs Act of 2017 (the “Act”), net operating loss carryforwards generated in years beginning after December 31, 2017 will carryforward indefinitely, and will apply to 80% of future taxable income. For the year ended February 28, 2019, the Company had a net operating loss carryforward in the amount of $78,948 that will carryforward in accordance with the Act.

In addition, the Company has alternative minimum tax credit carryforwards of $42,603 at February 28, 2019.