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7. Income Taxes
 12 Months Ended
Dec. 31, 2011
Income Tax Disclosure [Text Block]
7. Income Taxes

In 2011, we incurred $17,402 in total income tax expense, including $8,467 in federal income taxes and $8,935 in franchise taxes.  Our tax liability as of December 31, 2011 was $18,967, which included $8,362 in accrued federal income taxes and $10,605 in accrued franchise taxes.

The Company uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes. During the year ended December 31, 2010, the Company incurred net losses and, therefore, has no tax liability. The net deferred tax asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is approximately $151,500 at December 31, 2011, and will expire in the years 2026-2029 and will be limited under IRS SEC 382 due to the change in control (see note 1).

At December 31, 2011 and 2010, the Company’s deferred tax assets consisted of the following:

 
2011
 
2010
 
Deferred tax assets
       
Net operating losses
  $ 60,949     $ 60,949  
Less: valuation allowance
    (60,949 )     (60,949 )
Net deferred tax asset
  $ –     $ –