v3.26.1
Income Tax Disclosure
 6 Months Ended
Jun. 30, 2026
Notes  
Income Tax Disclosure

9. Income Taxes

 

The Company accounts for U.S. income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. 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. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

The provision for income tax expense (recovery) is comprised the following amounts:

 

Schedule of Provision for Income Tax Expense Recovery

 

 

June 30, 2026

 

December 31, 2025

Federal tax benefit at the statutory rate

$

(13,382)

21.00%

 

$

(231,571)

21.00%

State tax benefit, net of federal income tax benefit

 

(3,664)

5.75%

 

 

(63,406)

5.75%

Unallowed deductions

 

-

0.00%

 

 

9

0.00%

Gain (loss) on settlement of debt

 

-

0.00%

 

 

(36,275)

3.29%

Accrued interest expense

 

6,960

-10.92%

 

 

12,930

-1.17%

Change in valuation allowance

 

10,086

-15.83%

 

 

318,313

-28.87%

Total

$

-

 

 

$

-

 

 

The components of deferred income tax in the accompanying balance sheets are as follows:

 

Schedule of Components of Deferred Income Tax

 

 

June 30, 2026

 

December 31, 2025

Deferred tax assets:

 

 

 

 

 

Net operating loss carryforward

$

319,193

 

$

309,389

Accrued interest expense

 

(6,960)

 

 

(12,930)

Total gross deferred tax assets

 

312,233

 

 

296,459

Less: Deferred tax asset valuation allowance

 

(312,233)

 

 

(296,459)

Total net deferred taxes

$

-

 

$

-

 

As of June 30, 2026 and December 31, 2025, the Company had net operating loss carry-forwards for U.S. federal income tax purposes of approximately $6,817,533 and $6,779,827, respectively. These net operating loss carry-forwards will expire through the year ending 2045.

 

The valuation allowance was established to reduce the deferred tax asset to the amount that will more likely than not be realized. This is necessary due to the Company’s continued operating losses and the uncertainty of the Company’s ability to utilize all of the net operating loss carry-forwards before they will expire through the year 2045.

 

The Company is subject to income tax in the U.S. federal jurisdiction. The Company has not been audited by the U.S. Internal Revenue Service in connection with income taxes. The Company’s tax years beginning with the year ended December 31, 2005 through December 31, 2025 generally remain open to examination by the Internal Revenue Service until its net operating loss carry-forwards are utilized and the applicable statutes of limitation have expired.