NOTE 3 - INCOME TAXES

At December 31, 2015, the Company has a federal net operating loss carry-forward of approximately $897,000 available to offset future taxable income. The Company’s remaining net operating loss carry-forward will expire between 2017 and 2032. Utilization of future net operating losses may be limited due to ownership changes under Section 382 of the Internal Revenue Code.

The valuation allowance at December 31, 2015 was $325,000, an increase of $11,000 from $314,000 at December 31, 2014. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of December 31, 2015.

The effects of temporary differences that gave rise to significant portions of deferred tax assets at December 31, 2015 and 2014 are as follows:

	December 31,		December 31,
	2015		2014

Net operating loss carry forward	$	325,000	$	314,000

Valuation allowance		(325,000)		(314,000)
Net deferred tax asset	$	—	$	—

There was no Federal income tax expense for the years ended December 31, 2015 and 2014 due to the Company's net losses. For the years ended December 31, 2015 and 2014 state income tax expense was zero.

The Company's tax expense differs from the "expected" tax expense for the years ended December 31, 2015 and 2014, (computed by applying the Federal Corporate tax rate of 35% to income before taxes and 5.5% for Florida State Corporate taxes, the blended rate used was 38.67%), as follows:

	2015		2014

Current federal tax expense (benefit)		(11,000)		(12,000)
State tax rate difference, net of federal benefit		(1,000)		(1,000)

Change in valuation allowance		12,000		13,000

Income tax expense(benefit)		—		—

The Company includes interest and penalties arising from the underpayment of income taxes in the consolidated statements of operations in general and administrative expenses.

The tax years that remain subject to examination by major taxing jurisdictions are those for the years ended December 31, 2015, 2014 and 2013.