Income Taxes

9 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 6 - INCOME TAXES

As of December 31, 2019, the Company had net operating loss carry forwards of approximately $1,654,000, available to the Company indefinitely and up to 80% of the operating loss can be used against future taxable income.

As of September 30, 2020, the Company had $741,600 net operating loss carry forward available to the Company.

On March 27, 2020, the CARES Act was enacted into law. The CARES Act is a tax and spending package intended to provide economic relief to address the impact of the COVID-19 pandemic. The CARES Act includes several significant income and other business tax provisions that, among other things, would eliminate the taxable income limit for certain net operating losses (“NOLs”) and allow businesses to carry back NOLs arising in 2018, 2019, and 2020 to the five prior tax years. The Company was able to carryback the NOL to 2017 tax years and generate an estimated refund of previously paid income taxes at an approximate 34% federal tax rate. This resulted in a net benefit of $573,685 which has been recorded in the first quarter 2020.

The Company recorded a further net benefit of $210,253 in the second quarter 2020. In the third quarter 2020, the Company recorded a $21,222 net tax benefit for deferred tax liability adjustment related to goodwill impairment. For the nine months ended September 30, 2020, the Company has recorded $805,160 in net tax benefits.

The condensed consolidated statement of operations shows an effective tax rate for the three months ended September 30, 2020 and 2019, of 4.3% and 0%, respectively.

The condensed consolidated statement of operations shows an  effective tax rate for the nine months ended September 30, 2020 and 2019, of 31.7% and 0%, respectively.

The statutory tax rate was 21.0% in 2020 and 21.0% in 2019.

The income tax (benefit) for the three months ended September 30, 2020 and 2019 consists of:

	2020			2019
Current:
Federal	$	-		$	-
State		800			-
Deferred:
Federal		(22,022	)		-
State		-			-
Income Tax Provision	$	(21,222	)	$	-

The income tax (benefit) for the nine months ended September 30, 2020 and 2019 consists of:

	2020			2019
Current:
Federal	$	(806,800	)	$	-
State		1,640			-
Deferred:
Federal		(4,862	)		(11,340	)
State		4,862			(660	)
Income Tax (Benefit)	$	(805,160	)	$	(12,000	)