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10. Income Taxes | 12 Months Ended
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Dec. 31, 2018
Notes |
10. Income Taxes | 10. Income Taxes The Company did not recognize a provision (benefit) for income taxes for the years ended December 31, 2018 and 2017 due availability of net operating losses in both 2018 and 2017. In addition, net deferred tax assets are offset by a full valuation allowance. At December 31, 2018 and 2017, the Company had net deferred tax assets principally arising from the net operating loss carryforward for income tax purposes multiplied by an expected blended federal and state tax rate of 27%. 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 100% of the net deferred tax asset has been established at December 31, 2018 and 2017. On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the "Act") resulting in significant modifications to existing law. The Company completed the accounting for the effects of the Act during the quarter ended December 31, 2017. The Company did not incur any income tax benefit or provision for the year ended December 31, 2017 as a result of the changes to tax laws and tax rates under the Act. The Company’s net deferred tax asset was reduced by approximately $1.6 million during the year ended December 31, 2017, which consisted primarily of the remeasurement of federal deferred tax assets and liabilities from 35% to 21%. The significant components of net deferred tax assets at December 31, 2018 and 2017 were as follows:
|  | December 31, |  | December 31,
|  | 2018 |  | 2017
Deferred tax assets |  |  |  |
Net operating loss carry forward | $ | 3,388,000 | $ | 2,909,200
Mineral properties |  | 455,200 |  | 620,500
Asset retirement obligation |  | 4,400 |  | 6,500
Stock based compensation |  | 167,900 |  | 156,600
Derivative contracts |  | - |  | 136,500
Discount on note payable |  | - |  | 42,000
Other |  | 7,150 |  | -
Total deferred tax assets |  | 4,022,650 |  | 3,871,300
Valuation allowance |  | (2,990,350) |  | (3,198,800)
|  | 1,032,300 |  | 672,500
Deferred tax liabilities |  |  |  |
Acquisition of mineral interest |  | (60,500) |  | (60,500)
Property, plant, and equipment |  | (971,800) |  | (612,000)
Total deferred tax liabilities |  | (1,032,300) |  | (672,500)
Net deferred tax assets | $ | 0 | $ | 0
At December 31, 2018 the Company had net operating loss carry forwards of approximately $12,600,000 for both federal and state purposes, $11,100,000 of which expire between 2020 through 2037. The remaining balance of $1,500,000 will never expire but its utilization is limited to 80% of taxable income in any future year. The income tax provision (benefit) for the years ended December 31, 2018 and 2017 differ from the statutory rate of 21% in 2018 and 35% in 2017 as follows:
|  | December 31, 20182018 |  | December 31, 2017
Provision (benefit) at statutory rate for the period | $ | 158,000 | $ | (7,700)
State taxes, net of federal taxes |  | 44,000 |  | (1,100)
Adjustment of prior year tax benefit to actual |  | 6,450 |  | (36,400)
Change in federal tax rate |  | - |  | (1,558,400)
Increase (decrease) in valuation allowance |  | (208,450) |  | 1,513,200
Total provision (benefit) | $ | 0 | $ | 0
We are open to examination of our income tax filings in the United States and state jurisdictions for the 2016 through 2018 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.

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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