Income Taxes

12 Months Ended

Dec. 31, 2014

NOTE 5 – INCOME TAXES

The Company provides for income taxes under ASC 740, Accounting for Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. The Company’s predecessor operated as entity exempt from Federal and State income taxes.

ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 34% to the net loss before provision for income taxes for the following reasons:

	December 31, 2014			December 31, 2013
Book income (loss) from operations		(1,373,641	)		(921,549	)
Stock/options issued for services		57,949			125,980
Interest expense on convertible notes		263,279			51,509
Change in derivative liability		695,061			215,493
Change in valuation allowance		357,352			528,567
Income tax expense		-			-

Net deferred tax assets consist of the following components as of:

	2014			2013
Net operating loss carry forwards (expire through 2032)		(9,188,904	)		(7,815,263	)
Stock/options issued for services		3,264,292			3,206,344
Stock/options issued for executive comp.		649,593			649,593
Contributed services		8,194			8,194
Impairment expense		1,805,230			1,805,230
Interest expense on convertible notes		528,107			264,828
Change in derivative liability		802,908			107,847
Loss on sale of assets		82,121			82,121
Total gross deferred tax asset/liabilities		(2,048,459	)		(1,691,107	)

Valuation allowance		2,048,459			1,691,107
Net deferred taxes		-			-

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of $9,188,905 for federal income tax reporting purposes are subject to annual limitations. When a change in ownership occurs, net operating loss carry forwards may be limited as to use in future years. Due to net operating loss carryforwards, income tax returns remain subject to examination by federal and most state tax authorities.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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