Note 2 - Income Tax Disclosure

12 Months Ended

Sep. 30, 2018

Note 2 - Income Taxes. At September 30, 2018, the Company had a depletion carryforward of $860,000 and a net operating loss carryforward ("NOL") of $2,332,000, which will expire in the years 2027 through 2038. The approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax assets at September 30, 2018, computed in accordance with the Income Tax Topic (Topic 740) of the Codification, is as follows:

Deferred Tax Assets		2018	2017
Depletion carryforward	$	181,000	301,000
Net operating loss carryforward		490,000	790,000
Accrued shareholder salary		215,000	359,000
Total Net Deferred Tax Assets		886,000	1,450,000
Less valuation allowance		(886,000)	(1,450,000)
Net Deferred Tax Asset	$	-	-

A valuation allowance has been provided because of the uncertainty of future realization. Income tax expense is different from amounts computed by applying the statutory Federal income tax rate for the following reasons:

		2018	2017
Tax benefit at 21% and 35% of net earnings at September 30, 2018 and September 30, 2017, respectively	$	(15,000)	(45,000)
Impact of rate change effective January 1, 2018		579,000	-
Change in valuation allowance for net deferred tax assets		(564,000)	45,000
Income tax expense	$	-	-

As of September 30, 2018, the Company has no unrecognized tax benefit as a result of uncertain tax positions. As of September 30, 2018, the Company’s tax years that remain subject to examination are 2015 - 2018 (Federal jurisdiction) and 2014 - 2018 (state jurisdictions).