Quarterly report pursuant to Section 13 or 15(d)

NOTE 7 - INCOME TAXES

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NOTE 7 - INCOME TAXES
 3 Months Ended
Mar. 31, 2012
Notes to Financial Statements  
NOTE 7 - INCOME TAXES

NOTE 7 - INCOME TAXES  

 

At March 31, 2012, the Company had federal and state net operating loss carry forwards of approximately $500,000 that expire in 2024.

 

Due to operating losses, there is no provision for current federal or state income taxes for the period ended March 31, 2012.

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for federal and state income tax purposes.

 

The Company’s deferred tax asset at March 31, 2012 consists of a net operating loss calculated using federal and state effective tax rates equating to approximately $195,000 less a valuation allowance in the amount of approximately $195,000. Because of the Company’s lack of earnings history, the deferred tax asset has been fully offset by a valuation allowance.

 

The Company’s total deferred tax asset as of March 31, 2012 is as follows: 

         
 Net operating loss   $ 195,000  
 Valuation allowance     (195,000 )
         
 Net deferred tax asset   $ —    

 

The reconciliation of income taxes computed at the federal and state statutory income tax rate to total income taxes for the period ended March 31, 2012 is as follows:

 

Income tax computed at the federal statutory rate     34 %
Income tax computed at the state statutory rate     5 %
Valuation allowance     (39 %)
         
Total deferred tax asset     0 %

 

During the three months ended March 31, 2012, the valuation allowance increased by approximated $39,000.