v3.26.1
Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Taxes  
Income Taxes

Note 5.  Income Taxes

The Company accounts for income taxes in accordance with ASC 740-10-25, “Accounting for Income Taxes”. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2024 and 2023. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The Company has net operating loss carryforwards (“NOL’s) of approximately $5,018,000 which expire at various times through 2042. Management has determined that it is more likely than not that the NOL’s will not be fully utilized; therefore a full valuation allowance has been provided.

Approximately $3,785,000 of these NOL’s are subject to an annual limitation of approximately $70,000 due to a change of ownership pursuant to Internal Revenue Code section 382. Due to this annual limitation, NOL’s of approximately $2,881,000 have been lost. As a result, only approximately $2,137,000 of NOL’s remain available to the Company as of December 31, 2024.

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2024

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2023

Deferred tax assets:

 

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Net operating loss carryforward

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$

669,000

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$

684,000

Prior year true-up

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—

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—

Less valuation allowance

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(669,000)

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(684,000)

Net deferred tax asset

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$

—

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$

—

​

The reconciliation of the Company’s effective tax rate differs from the Federal income tax rate of 21% for the years ended December 31, 2024 and 2023, respectively as a result of the following:

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2024

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2023

Federal tax expense at statutory rate

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$

10,000

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$

2,000

State and local taxes, net of federal benefit

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5,000

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1,000

Change in valuation allowance

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(15,000)

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(3,000)

Tax expense

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$

—

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$

—

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Federal and State/Local tax years remain open by statute, generally three years. There are no open Statutory Federal or State/Local audits at December 31, 2024.