Income Taxes

9 Months Ended

Apr. 30, 2022

Income Taxes

Income Taxes

Note 8 – Income Taxes

The Company accounts for income taxes under FASB ASC 740-10, which requires use of the liability method. FASB ASC 740-10-25 provides that deferred tax assets and liabilities are recorded based on the differences between the tax basis of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences.

As of April 30, 2022, the Company incurred a taxable net operating loss and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. The Company had approximately $3,935,000 of federal net operating loss carry forwards at April 30, 2022. The net operating loss carry forwards, if not utilized, will begin to expire in 2029.

The components of the Company’s deferred tax asset are as follows:

	April 30,			July 31,
	2022			2021
Deferred tax assets:
Net operating loss carry forwards	$	826,350		$	640,500
Net deferred tax assets before valuation allowance	$	826,350		$	640,500
Less: Valuation allowance		(826,350	)		(640,500	)
Net deferred tax assets	$	-		$	-

Based on the available objective evidence, including the Company’s history of losses, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at April 30, 2022 and July 31, 2021, respectively. The Company had no uncertain tax positions as of April 30, 2022. A reconciliation between the amounts of income tax benefit determined by applying the applicable U.S. and State statutory income tax rate to pre-tax loss is as follows:

	April 30,			July 31,
	2022			2021
Federal and state statutory rate		21	%		21	%
Change in valuation allowance on deferred tax assets	(21%)			(21%)