v3.25.1
TAXES
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
TAXES

NOTE 8-TAXES

 

The following table sets forth a reconciliation of the statutory federal income tax for the years ended December 31, 2024 and 2023.

  

   2024   2023 
         
Income (loss) before income taxes  $(8,216,112)  $(3,211,277)
           
Income tax expense (benefit) computed at statutory rates  $(1,725,727)  $(674,368)
Permanent differences, nondeductible expenses   28    9 
Increase (decrease) in valuation allowance   1,807,535    710,336)
Expiration of options   32,060    - 
RTA True-Ups   (227,729)   (10,919)
Deferred True-Up   113,833    (25,088)
Tax provision  $-   $- 
           
Total provision          
Foreign  $-   $- 
Total provision (benefit)  $-   $- 

 

At December 31, 2024 the Company has a federal tax loss carry forward of $12,741,145 and a foreign tax credit carry forward of $18,865, both of which have been fully reserved. The foreign tax credit will expire in 2025.

 

The tax effects of the temporary differences between financial statement income and taxable income are recognized as a deferred tax asset and liabilities. Significant components of the deferred tax asset and liability as of December 31, 2024 and 2023 are set out below.

  

   2024   2023 
Non-Current Deferred tax assets:          
Net operating loss carry forward   12,729,620   $12,355,137 
Foreign tax credit carry forward   18,865    18,865 
Deferred state tax   -    - 
Stock compensation   460,368    470,816 
Book in excess of tax depreciation, depletion and capitalization methods on oil and gas properties   1,497,253    53,720 
Other   -    - 
ASC 842 lease standard - building lease   248    281 
Pass-through investment   -    - 
Total Non-Current Deferred tax assets   14,706,354    12,898,819 
Valuation Allowance   (14,706,354)   (12,898,819)
Net deferred tax asset   -   $- 

 

 

Schedule of Net Operating Loss Carryforwards

 

The Company is currently subject to a three-year statute of limitation for federal tax purposes and, in general, three to four-year statute of limitation for state tax purposes. State NOL expiration will occur beginning in 2033 and Federal NOL expiration will begin in 2032. The Company files income tax returns in the U.S. federal jurisdiction, and Texas and Oklahoma state jurisdictions. The Company is currently subject to a three-year statute of limitation for federal tax purposes and, in general, three to four year statute of limitation for state tax purposes. The federal tax years open to examination are tax years 2021, 2022, and 2023. The state tax years open to examination are tax years 2020, 2021, 2022, and 2023.

 

Under the Tax Cuts and Jobs Act of 2017, net operating losses incurred for tax years beginning after December 31, 2017 will have no expiration date but utilization will be limited to 80% of taxable income. For losses generated prior to January 1, 2018, there will be no limitation on the utilization, but there is an expiration on the carryforward of 20 years for federal tax purposes.

 

The provisions were subsequently amended further under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) on March 27, 2020. The CARES Act amended the net operating loss provisions in the 2017 Tax Cuts and Jobs Act (“TCJA”) and allows for the carryback of NOL’s arising in the taxable years ending December 31, 2017 and before January 1, 2021, to each of the five taxable years preceding the taxable year of the loss. Additionally, the 80% limitation related to application of NOL’s towards current federal taxable income has been removed for taxable years prior to January 1, 2021; thereby allowing 100% of the NOL to be applied to federal taxable income.

 

To the best of the Company’s knowledge, Hupecol Meta has made all requisite filings relative to its operations, including those in Colombia, and that there are no know or expected tax issues, payments due, or judgments related to Hupecol Meta that would adversely impact the Company’s cost method investment therein.