v3.22.2.2
INCOME TAXES
 12 Months Ended
Jun. 30, 2022
INCOME TAXES  
14. INCOME TAXES

14.  INCOME TAXES

 

For the years ended June 30, 2022 and 2021, there was no provision for income taxes and deferred tax assets have been entirely offset by valuation allowances.

 

As of June 30, 2022, the Company has net operating loss carry forwards of approximately $3,276,815 that expire through the year 2040. The Company’s net operating loss carry forwards may be subject to annual limitations, which could reduce or defer the utilization of the losses as a result of an ownership change as defined in Section 382 of the Internal Revenue Code.

 

The Company’s income tax expense (benefit) differs from the “expected” tax expense (benefit) for Federal income tax purposes (computed by applying the United States Federal tax rate of 21% to income (loss) before income taxes), as follows:

 

 

 

Years Ended June 30,

 

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

Tax benefit at the statutory rate

 

$(118,758)

 

$(4,710,947)

State income taxes, net of federal income tax benefit

 

 

(248,245

)

 

 

(210,324)

Non-deductible items

 

 

556,524

 

 

 

4,787,602

 

Non-taxable items

 

 

-

 

 

 

-

 

Change in valuation allowance

 

 

(189,521

)

 

 

133,669

 

 

 

 

 

 

 

 

 

 

Total

 

$-

 

 

$-

 

 

The tax effects of the temporary differences between reportable financial statement income and taxable income are recognized as deferred tax assets and liabilities.

 

The tax years 2015 through 2021 remain open to examination by federal agencies and other jurisdictions in which it operates.

The tax effect of significant components of the Company’s deferred tax asset at June 30, 2022 and 2021, respectively, are as follows:

 

 

 

June 30,

 

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

Net operating loss carryforward

 

$688,131

 

 

$498,610

 

Less valuation allowance

 

 

(688,131)

 

 

(498,610)

 

 

 

 

 

 

 

 

 

Net

 

$-

 

 

$-

 

 

In assessing the realizability of 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 during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

 

Because of the historical earnings history of the Company, the net deferred tax assets as of June 30, 2022 and 2021 were fully offset by a 100% valuation allowance.