INCOME TAXES

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

INCOME TAXES

The components of income tax expense (benefit) consists of the following:

	December 31,
	2015			2014
Deferred:
Federal	$	(255,000	)	$	(135,000	)
State		(31,000	)		90,000
		(286,000	)		(45,000	)
Change in valuation allowance		286,000			45,000
	$	0		$	0

At December 31, 2015, the Company had federal net operating loss carryforwards of approximately $7,300,000 ($6,800,000 – 2014) and various state net operating loss carryforwards of approximately $2,500,000 ($2,200,000 – 2014) which expire from 2018 through 2035.  These carryforwards exclude federal net operating loss carryforwards from inactive subsidiaries of approximately $6,600,000 ($6,600,000 – 2014), as well as net operating loss carryforwards from states that the Company does not presently operate in.  Utilization of the net operating loss carryforwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenues Code and similar state provisions. The annual limitation may result in the expiration of the net operating loss carryforwards before utilization.

At December 31, 2015, a net deferred tax asset, representing the future benefit attributed primarily to the available net operating loss carryforwards and defined benefit pension plan expenses, in the amount of approximately $3,431,000 ($3,145,000 - 2014), had been fully offset by a valuation allowance because management believes that the statutory limitations on utilization of the operating losses and concerns over achieving profitable operations diminish the Company’s ability to demonstrate that it is more likely than not that these future benefits will be realized before they expire.

The following is a summary of the Company's temporary differences and carryforwards which give rise to deferred tax assets and liabilities.

	December 31,
	2015			2014
Deferred tax assets (liabilities):
Net operating loss carryforwards	$	2,614,000		$	2,423,000
Defined benefit pension liability		325,000			331,000
Reserves and accrued expenses payable		492,000			391,000
Gross deferred tax asset		3,431,000			3,145,000
Deferred tax asset valuation allowance		(3,431,000	)		(3,145,000	)
Net deferred tax asset	$	0		$	0

The differences between the U.S. statutory federal income tax rate and the effective income tax rate in the accompanying statements of operations are as follows:

	December 31,
	2015			2014
Statutory U.S. federal tax rate		34.0	%		34.0	%
State income taxes		3.8			(18.0	)
Change in valuation allowance		(35.3	)		(9.1	)
Stock-based compensation expense		(1.7	)		(4.5	)
Expired stock-based compensation		(.4	)		(1.8	)
Other permanent non-deductible items		(.4	)		(.6	)
Effective income tax rate		0.0	%		0.0	%