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INCOME TAXES
 12 Months Ended
Dec. 31, 2011
INCOME TAXES

NOTE 7.  INCOME TAXES

 

Income tax expense (benefit) consists of the following:

 

 

2011

2010

 

---------------

--------------

Current

$  (203,348)

$  (216,448)

Deferred

203,348

216,448

 

-----------------

-----------------

 

$                 -

$                -

 

The components of the deferred tax asset (liability) consisted of the following at December 31:

 

2011

2010

 

-------------

--------------

Deferred tax liabilities:

 

 

  Temporary differences related to:

 

 

  Depreciation

$  (209,433)

$  (201,665)

 

 

 

Deferred tax assets:    

 

 

  Net operating loss carryforward

4,536,245

4,434,511

  Related party interest

1,547,287

1,407,854

    Other

2,396

41,800

 

---------------

---------------

Net deferred tax asset before evaluation  allowance

5,874,099

5,681,500

  Valuation allowance

(5,874,099)

(5,681,500)

                                      

 

 

 

$                 -

$                 -

 

==========

==========

 

 

 

As of December 31, 2011 and 2010, the Company has available for income tax purposes approximately $21.0 and $20.0 million respectively in federal net operating loss carryforwards, which may be available to offset future taxable income.  These loss carryforwards expire in 2019 through 2028.  The Company may be limited by Internal Revenue Code Section 382 in its ability to fully utilize its net operating loss carryforwards due to possible future ownership changes.  A 100% valuation allowance has been effectively established against the net deferred tax asset since it appears more likely than not that it will not be realized.

 

The provision (benefit) for income taxes attributable to income (loss) from continuing operations does not differ materially from the amount computed at the federal income tax statutory rate.  The Company paid $- 0- in income tax for the year ended 2010.