NOTE 2 INCOME TAXES

12 Months Ended

Dec. 31, 2021

Notes

NOTE 2 INCOME TAXES

NOTE 2 - INCOME TAXES

The Company accounts for income taxes in accordance with ASC Topic No. 740, “Income Taxes.”  This standard requires the Company to provide a net deferred tax asset or liability equal to the expected future tax benefit or expense of temporary reporting differences between book and tax accounting and any available operating loss or tax credit carryforwards.

The Company has no tax provisions at December 31, 2021 and 2020, for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. During the years ended December 31, 2021 and 2020, the Company recognized no interest and penalties. The Company had no accruals for interest and penalties at December 31, 2021 and 2020.

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss (NOL) and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences.  Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

BIOETHICS, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS

December 31, 2021 and 2020

Net deferred tax assets (liabilities) consist of the following components as of December 31, 2021 and 2020:

		2021		2020
Deferred tax assets:
NOL carryover	$	221,000		198,000
Extinguishment of debt with shares		28,000		28,000
Valuation allowance		(249,000)		(226,000)
Net deferred tax asset	$	-	$	-

The income tax provision differs from the amount of estimated income tax determined by applying the U.S. Federal income tax rate of 21% to pretax income from continuing operations for the periods ended December 31, 2021 and 2020 due to the following:

		2021		2020
Book loss (21% Federal rate)	$	(23,000)	$	(25,000)
Change in valuation allowance		23,000		25,000
Tax at effective rate	$	-	$	-

At December 31, 2021, the Company had net operating loss carryforwards of approximately $1,086,000 that may be offset against future taxable income from the year 2022 through 2041.  No tax benefit has been reported in the December 31, 2021 or 2020 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.  There is no provision for state taxes, since the Company’s operations have been limited to administrative expenses and fund-raising in the state of its incorporation (Nevada) which has no income tax.

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations.  Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years. The tax years that remain subject to examination by major taxing jurisdictions are those for the years ended December 31, 2021, 2020 and 2019.