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10. Income Taxes

12 Months Ended

Dec. 31, 2014

10. Income Taxes

The Company did not recognize a provision (benefit) for income taxes for the years ended December 31, 2014 and 2013.

At December 31, 2014 and 2013, the Company had deferred tax assets principally arising from the net operating loss carry forwards for income tax purposes multiplied by an expected rate of 40%. As management of the Company cannot determine that it is more likely than not that the Company will realize the benefit of the deferred tax assets, a valuation allowance equal to the deferred tax asset has been established at December 31, 2014 and December 31, 2013. The significant components of the deferred tax asset at December 31, 2014 and 2013 were as follows:

		December 31,		December 31,
		2014		2013
Deferred tax asset
Net operating loss carry forward	$	3,995,000	$	3,546,000
Exploration/development		834,000		746,000
Asset retirement obligation/accrual		9,000
Lease income		23,000		19,000
Acquisition of mineral interest		(90,000)
Total deferred tax assets		4,771,000		4,311,000
Valuation allowance		(4,171,000)		(3,778,000)
Net		600,000		533,000
Deferred tax liabilities
Property, plant, and equipment		(600,000)		(533,000)
Total deferred tax liabilities		(600,000)		(533,000)
Net deferred tax asset	$	0	$	0

At December 31, 2014 and 2013 the Company had net operating loss carry forwards of approximately $9,987,000 and $8,865,000 respectively for both federal and the state of Idaho, which expire in the years 2017 through 2033.

The income tax benefit shown in the financial statements for the years ended December 31, 2013 and 2012 differs from the statutory rate as follows:

	December 31, 2014		December 31, 2013
Provision (benefit) at statutory rate	$	(499,000)	$	(348,000)
State taxes, net of federal taxes		(71,000)		(37,000)
Affect prior year restatement/adjustments		177,000
Increase (decrease) in valuation allowance		393,000		385,000
Total provision (benefit)	$	0	$	0

We are open to examination of our income tax filings in the United States and state jurisdictions for the 2012 through 2014 tax years. In the event that the Company is assessed penalties and or interest, penalties will be charged to other operating expense and interest will be charged to interest expense. Certain tax positions taken in the 2012 through 2014 tax years could result in minor adjustments to our exploration and development costs for tax purposes. However, these adjustments would not result in a tax provision, but only revise to the net operating loss carry forward balance.

- 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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