12. Income Taxes

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

12. Income Taxes

As of December 31, 2013 and 2012, the Company had net operating loss attributable to Lustros, Inc. of $6,697,711 and $3,255,580, respectively that may be available to reduce future years’ federal taxable income through 2032. Future tax benefits which may arise as a result of these losses 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 tax loss carryforwards.

A reconciliation of the expected consolidated income tax expense, computed by applying a 35% U.S. Federal corporate income tax rate to income before taxes to income tax expense is as follows December 31, 2013 and 2012:

	2013			2012
Deferred tax asset:
Net operating loss	$	(2,344,220	)	$	(1,139,457	)
Impairment charges		(1,577,367	)		–
Total deferred tax asset	$	(3,921,587	)	$	(1,139,457	)
Less: Valuation allowance		3,921,587			1,139,457
Net deferred tax asset	$	–		$	–

The valuation allowance for deferred tax assets as of December 31, 2013 and 2012 was $3,921,587 and $1,139,457, respectively, which may be applied against future taxable income, if any, through 2032. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would not be realized as of December 31, 2013 and 2012.