Deferred tax assets are comprised of the following at December 31:

	2019			2018
Net operating loss carryforward	$	13,536,000		$	13,280,000
Temporary differences		6,988,000			6,988,000
Less valuation allowance		(20,542,000	)		(20,268,000	)
Deferred tax asset, net		-			-

Deferred taxes arise from temporary differences in the recognition of certain expenses for tax and financial reporting purposes. At December 31, 2019 and 2018, management determined that realization of these benefits is not assured and has provided a valuation allowance for the entire amount of such benefits. At December 31, 2019 and 2018, net operating loss carryforwards were approximately $51,357,000 and $50,135,000, respectively, for federal tax purposes that expire at various dates through 2031 and for state tax purposes expire through 2025. For the years ended December 31, 2019 and 2018, the change in valuation is $20,542,000 and $20,268,000, respectively, and we have open tax years for 2017 through 2019.

For December 31, 2019 and 2018, the provision for income taxes differs from the amount computed by applying the U.S. federal statutory tax rate (21% in 2019 and 2018) to income taxes as follows:

	2019			2018
Tax benefit computed at 21%	$	-		$	-
Change in valuation allowance		274,000			3,334,000
Change in carryovers and tax attributes		(274,000	)		(3,334,000	)
Income tax provision	$	-		$	-

See below for rate reconciliation.

	2019			2018
Federal Tax statutory rate		21.00	%		21.00	%
Valuation allowance		(21.0	)%		(21.0	)%
Effective rate		0.00	%		0.00	%