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INCOME TAXES
 12 Months Ended
Dec. 31, 2012
INCOME TAXES

NOTE 7.  INCOME TAXES

 

Income tax expense (benefit) consists of the following:

 

 

       2012

       2011

 

      --------------

       -------------

Current

$  (303,753)

$  (203,348)

Deferred

          303,753

           203,348

 

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

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

 

$                 -

$                -

 

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

 

           2012

    2011

 

          -------------

    --------------

Deferred tax liabilities:

 

 

  Temporary differences related to:

 

 

  Depreciation

$  (173,312)

$  (209,433)

 

 

 

Deferred tax assets:    

 

 

  Net operating loss carry forward

4,633,802

4,536,245

  Related party interest

1,692,634

1,547,287

    Other

-

2,396

 

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

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

Net deferred tax asset before evaluation  allowance

6,153,124

5,874,099

  Valuation allowance

(6,153,124)

(5,874,099)

                                      

 

 

 

$                 -

$                 -

 

=========

=========

 

 

 

As of December 31, 2012 and 2011, the Company has available for income tax purposes approximately $21.0 and $20.0 million respectively in federal net operating loss carry forwards, which may be available to offset future taxable income.  These loss carry forwards expire in 2019 through 2032.  The Company may be limited by Internal Revenue Code Section 382 in its ability to fully utilize its net operating loss carry forwards 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 and $0 in income tax for the years ended December 31, 2012 and 2011, respectively.