Income Taxes:

12 Months Ended

Feb. 28, 2022

INCOME TAXES

Income Taxes:

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, 2022 and 2021 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:

	2022		2021
Expected expense (benefit)	$	(205,098)	$	(252,840)
Taxes directly to Dr. Burzynski		205,098		252,840
Nondeductible expenses and other adjustments		(9,880)		1,884
Change in valuation allowance		9,880		(1,884)
Provision for income tax	$	—	$	—

The components of the Company’s deferred income tax assets as of February 28, 2022 and 2021 are as follows:

	2022		2021
Deferred tax assets:
Net operating loss carryforwards	$	116,099	$	125,979
Alternative minimum tax credit carryforwards		42,603		42,603
Total deferred tax assets		158,702		168,582
Less valuation allowance		(158,702)		(168,582)
Net deferred tax assets	$	—	$	—

The Company’s ability to utilize net operating loss carryforwards (“NOL”) 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.

As a result of the Tax Cuts and Jobs Act of 2017 (the “Act”), NOL carryforwards generated in years beginning after December 31, 2017 would carryforward indefinitely, and would apply to 80% of future taxable income. Under the Act, carrybacks of NOLs were disallowed. In March 2020, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was enacted providing a five-year carryback for losses incurred in 2018, 2019, or 2020, which allows companies to modify tax returns up to five years prior to offset taxable income from those tax years. The CARES Act also suspended the NOL limit of 80% of taxable income.

As of February 28, 2022, the Company has net operating loss carryforwards in the amount of $473,902 that will expire between 2026 and 2038, and $78,948 that will carryforward indefinitely.  The NOL carryforwards expire as of February 28 or 29 of the following years:

2023	$	—
2024	$	—
2025	$	—
2026	$	44,638
2027	$	31,220
2028	$	7,737
2029	$	31,868
2030	$	—
2031	$	—
2032	$	—
2033	$	207,097
2034	$	76,643
2035	$	—
2036	$	—
2037	$	—
2038	$	74,699
2039	$	78,948
2040	$	—

In addition, the Company has alternative minimum tax credit carryforwards of $42,603 at February 28, 2022.