Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.23.1
Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes

Note 8 – Income Taxes

 

On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (the “TCJA”) that significantly reforms the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). The TCJA, among other things, contains significant changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, effective as of January 1, 2018; limitation of the tax deduction for interest expense; limitation of the deduction for net operating losses to 80% of current year taxable income and elimination of net operating loss carrybacks, in each case, for losses arising in taxable years beginning after December 31, 2017 (though any such tax losses may be carried forward indefinitely); modifying or repealing many business deductions and credits, including reducing the business tax credit for certain clinical testing expenses incurred in the testing of certain drugs for rare diseases or conditions generally referred to as “orphan drugs”; and repeal of the federal Alternative Minimum Tax (“AMT”).

 

The Company has the following net deferred tax asset:

 

    As of
December 31, 2022		     As of
December 31, 2021		  
Temporary Differences   $ 247,534      $ 232,327  
Unrealized gains    

120,135

       84,399  
Impairment losses on investment    

324,364 

       208,471  
Net operating loss carryforward    

286,626 

       339,152  
Total gross deferred tax assets    

(978,659

 )     (864,349 )
                 
Net deferred tax assets   $ -     $ -  

 

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:

 

    For the Year ended
December 31, 2022		     For the Year ended
December 31, 2021		  
             
Expected federal statutory rate     (21 )%     (21 )%
State Effect on tax rate, net of federal benefit     (4.35 )%     (4.35 )%
Permanent differences     (5.75 )%     (5.75 )%
Change in valuation allowance     31.1 %     31.1 %
                 
Income tax provision (benefit)     -       -  

 

As of December 31, 2021, the Company had approximately $1,338,000 of federal and state net operating loss carryovers (“NOLs”). From this amount, $711,000 expire after 20 years, and can be carried back 2 years, according to the old tax law, while $627,000 can be carried forward indefinitely and cannot be carried back, in accordance with the new tax rules. The valuation allowance increased by approximately $114,310 for the year ended December 31, 2022, and increased by $251,726 for the year ended December 31, 2021.

 

The Company, after considering all available evidence, fully reserved its deferred tax assets since it is more likely than not that such benefits may be realized in future periods. The Company has not yet established that it can generate taxable income. The Company will continue to evaluate its deferred tax assets to determine whether any changes in circumstances could affect the realization of their future benefit. If it is determined in future periods that portions of the Company’s deferred tax assets satisfy the realization standards, the valuation allowance will be reduced accordingly.