INCOME TAXES

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

NOTE 5 - INCOME TAXES

No current provision for Federal income taxes was required for the nine months ended September 30, 2016 and 2015, due to the Company’s operating losses. At September 30, 2016 and December 31, 2015 the Company had unused net operating loss carry-forwards of approximately $1,135,000 and $1,043,000 which expire at various dates through 2036. Most of this amount is subject to annual limitations under certain provisions of the Internal Revenue Code related to “changes in ownership.”

As of September 30, 2016 and December 31, 2015, the deferred tax assets related to the aforementioned carry-forwards have been fully offset by valuation allowances, since it is more likely than not that significant utilization of such amounts will not occur in the foreseeable future.

	September 30,			December 31,
	2016			2015
Deferred tax assets and valuation allowances consist of:
Deferred tax assets:
Net operating loss carry forwards	$	454,000		$	417,000
Less valuation allowance		(454,000	)		(417,000	)
Net deferred tax assets	$	-		$	-

We file income tax returns in the U.S. Federal and Texas state jurisdictions. Tax years for fiscal 2008 through 2016 are open and potentially subject to examination by the Texas state taxing authority.

The Company currently has no federal or state tax examinations in progress.

The following is a reconciliation of the tax derived by applying the statutory rate to the earnings before income taxes, and comparing that to the recorded income tax (expense) benefits:

	Nine months ended
	September 30,
	2016			2015
Tax benefits (expense) at statutory rate		35	%		35	%
Unrecognized tax benefits (expense) of current period tax losses		(35	)%		(35	)%
Effective tax rate		-			-

The Company had no uncertain tax positions that would necessitate recording of a tax related liability.