Annual report pursuant to Section 13 and 15(d)

Income Taxes

v2.4.0.6
Income Taxes
12 Months Ended
Dec. 31, 2011
Income Taxes  
Income Tax Disclosure [Text Block]

NOTE 3 - INCOME TAXES

 

            As of December 31, 2011, the Company had a net operating loss carryforward for income tax reporting purposes of approximately $5,200,000 that may be offset against future taxable income through 2030.  Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs.  Therefore, the amount available to offset future taxable income may be limited.  No tax benefit has been reported in the financial statements, because the Company believes there is a 50% or greater chance the carry forwards will expire unused.  Accordingly, the potential tax benefits of the loss carry forwards are offset by a valuation allowance of the same amount.

            The Company has the following tax assets:

 

 

December 31,

 

December 31,

 

 

2011

 

2010

Net Operating Losses   

 

$1,768,000

 

$1,836,000

Depreciation and Other

 

(21,340)

 

93,840

Valuation Allowance

 

(1,746,660)

 

(1,929,840)

 

 

$             -

 

$             -

 

            The provision for income taxes differs from the amount computed using the federal US statutory income tax rate as follows:

 

 

December 31,

 

December 31,

 

 

2011

 

2010

Provision (Benefit) at US Statutory Rate

 

$(52,200)

 

$(213,000)

Net Operating Losses

 

80,240

 

(12,600)

Depreciation and Other

 

155,140

 

234,100

Increase (Decrease) in Valuation Allowance

 

(183,180)

 

(8,500)

 

 

$            -

 

$            -

 

            The Company evaluates its valuation allowance requirements based on projected future operations. When circumstances change and causes a change in management's judgement about the recoverability of deferred tax assets, the impact of the change on the valuation is reflected in current income.