Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 7. INCOME TAXES

The Company accounts for income taxes under ASC Topic 740: Income Taxes, which requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carry-forwards. ASC Topic 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets.

On December 22, 2017, the U.S. federal government enacted the Tax Cuts and Jobs Act (the “2017 Tax Act”). Management reviewed and incorporated the new tax bill implications in the 2017 financial statements. The main change is the re-measurement of deferred taxes at the new corporate tax rate of 21%, which reduced the Company’s net deferred tax assets, before valuation allowance, by $2.2 million. Due to full valuation allowance, the change in deferred taxes was fully offset by the change in valuation allowance.

	2019	2018
Deferred tax liabilities:
Temporary differences related to: Depreciation	-	(63,569)
Deferred tax assets:
Net operating loss carry forward	3,135,141	3,049,712
Related Party interest	-	1,452,887
Other	-	-
Net deferred tax asset before valuation allowance	3,135,141	4,439,030
Valuation Allowance	(3,135,141)	(4,439,030)
	$              -	$              -
	2019	2018
Income tax at federal rate	21.00%	21.00%
Permanent differences	-35.00%	-35.00%
Effective income tax rate	0.00%	0.00%

As of December 31, 2019 and 2018, the Company had available for income tax purposes approximately $21.0 million and $21.0 million respectively in federal net operating loss carry forwards, which may be available to offset future taxable income. These loss carry forwards expire in 2019 through 2038. The Company may be limited by Internal Revenue Code Section 382 in its ability to fully utilize its net operating loss carry forwards due to possible future ownership changes. Management has established a 100% valuation allowance against the net deferred tax asset since it appears more likely than not that it will not be realized.

The provision (benefit) for income taxes attributable to income (loss) from continuing operations does not differ materially from the amount computed at the federal income tax statutory rate.