NOTE 10 – INCOME TAXES

As of June 30, 2013, the Company had net operating loss carry forwards of approximately $1,547,000 that may be available to reduce future years’ taxable income through 2032. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.

The provision for Federal income tax consists of the following for the periods ended June 30, 2013 and June 30, 2012:

	June 30, 2013		June 30, 2012
Federal income tax benefit attributable to:
Current Operations	$	462,250	$	2,057
Less: valuation allowance		(462,250)		(2,057)
Income tax liability of subsidiary		3,321		0
Net provision for Federal income taxes	$	3,321	$	0

The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows as of June 30, 2013 and December 31, 2012:

	June 30, 2013		December 31, 2012
Deferred tax asset attributable to:
Net operating loss carryover	$	526,000	$	1,602
Less: valuation allowance		(526,000)		(1,602)
Net deferred tax asset	$	0	$	0

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of $1,547,000 for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited as to use in future years.