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10. Income Taxes
 12 Months Ended
Dec. 31, 2020
Notes  
10. Income Taxes

10. Income Taxes

The Company did not recognize a provision (benefit) for income taxes for the years ended December 31, 2020 and 2019.

At December 31, 2020 and 2019, 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 26.9%. 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 exists at December 31, 2020 and 2019.

The significant components of net deferred tax assets at December 31, 2020 and 2019 were as follows:

 

 

 

2020

 

2019

Deferred tax assets

 

 

 

 

Net operating loss carry forward

$

3,984,500

$

3,420,600

Mineral properties

 

201,200

 

304,300

Asset retirement obligation

 

8,400

 

5,800

Stock based compensation

 

219,000

 

219,000

Other

 

14,800

 

11,200

Total deferred tax assets

 

4,427,900

 

3,960,900

Valuation allowance

 

(3,286,100)

 

(2,985,400)

 

 

1,141,800

 

975,500

Deferred tax liabilities

 

 

 

 

Property, plant, and equipment

 

(1,141,800)

 

(975,500)

Total deferred tax liabilities

 

(1,141,800)

 

(975,500)

 

 

 

 

 

Net deferred tax assets

$

-

$

-

 

At December 31, 2020 the Company had net operating loss carry forwards of approximately $14,450,000 for both federal and state purposes, $11,100,000 of which expire between 2021 through 2037. The remaining balance of $3,350,000 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, 2020 and 2019 differ from the statutory rate of 21% as follows:

 

 

 

2020

 

2019

 

 

 

 

 

Provision (benefit) at statutory rate for the period

$

(155,400)

$

(152,600)

State taxes, net of federal taxes

 

(43,300)

 

(42,500)

Non-taxable item-CARES Act loan forgiven

 

(96,200)

 

-

Adjustment of prior year tax estimates

 

(5,800)

 

3,850

Increase (decrease) in valuation allowance

 

300,700

 

191,250

Total provision (benefit)

$

-

$

-

 

The Company is open to examination of our income tax filings in the United States and state jurisdictions for the 2018 through 2020 tax years. Tax attributes from years prior to that can be adjusted as a result of examinations. 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.