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10. Income Taxes
 12 Months Ended
Dec. 31, 2015
Notes  
10. Income Taxes

10. Income Taxes

 

The Company did not recognize a provision (benefit) for income taxes for the years ended December 31, 2015and 2014.

 

At December 31, 2015 and 2014, 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, 2015 and December 31, 2014. The significant components of the deferred tax asset at December 31, 2015 and 2014 were as follows:

 

 

 

 

December 31,

 

December 31,

 

 

2015

 

2014

Deferred tax asset

 

 

 

 

Net operating loss carry forward

$

3,436,000

$

3,995,000

Exploration/development

 

798,000

 

834,000

Asset retirement obligation/accrual

 

11,000

 

9,000

Lease income

 

27,000

 

23,000

Total deferred tax assets

 

4,272,000

 

4,861,000

Valuation allowance

 

(4,153,000)

 

(4,171,000)

Net

 

119,000

 

690,000

Deferred tax liabilities

 

 

 

 

Acquisition of mineral interest

 

(90,000)

 

(90,000)

Property, plant, and equipment

 

(29,000)

 

(600,000)

Total deferred tax liabilities

 

(119,000)

 

(690,000)

Net deferred tax asset

$

0

$

0

 

 

At December 31, 2015 and 2014 the Company had net operating loss carry forwards of approximately $9,623,000 and $8,754,000 respectively for both federal and the state of Idaho, which expire in the years 2018 through 2035.

 

The income tax benefit shown in the financial statements for the years ended December 31, 2015 and 2014 differs from the statutory rate as follows:

 

 

 

 

December 31,

2015

 

December 31,

2014

Provision (benefit) at statutory rate

 

$

(86,000)

 

$

(499,000)

State taxes, net of federal taxes

 

 

(12,000)

 

 

(71,000)

Affect prior year restatement/adjustments

 

 

116,000

 

 

177,000

Increase (decrease) in valuation allowance

 

 

(18,000)

 

 

393,000

Total provision (benefit)

 

$

0

 

$

0

 

 

We are open to examination of our income tax filings in the United States and state jurisdictions for the 2013 through 2015 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 2013 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.