Note 3 - Income Taxes

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Text Block]

Note

Income Taxes

The Company files federal and state income tax returns on a calendar year basis.

The net deferred tax liability in the accompanying balance sheets includes the followin

g components at

December 31, 2017

and

2016:

	2017			2016
Deferred tax assets	$	--		$	--
Deferred tax liabilities		(187,664	)		(298,919	)
	$	(187,664	)	$	(298,919	)

Reconciliation

s between the United States Federal statutory income tax provision, using the statutory rate of

34%,

and the Company’s provision for income taxes at

December 31, 2017

and

2016

are as follows:

	2017			2016
Income tax on income before extraordinary item:
Tax at statutory rates	$	199,270		$	75,586
Tax effect of the following:
Statutory depletion		(29,994	)		(24,936	)
Section 179 deduction					(5,229	)
State income tax		12,475			808
Other		(7,272	)		(744	)
Income tax on income	$	174,479		$	45,485

Deferred income taxes result from timing differences in the recognition of revenue and expenses for tax and financial statement purposes. The effect of these timing differences at

December 31,

2017

and

2016

is as follows:

	2017			2016
Casualty loss	$	(77,714	)	$	(121,239	)
Deferred gain		(109,950	)		(171,528	)
Section 179 deduction		--			(6,152	)
	$	(187,664	)	$	(298,919	)

The decrease to net deferred tax liabilities of

$111,255

is directly related to the

2017

Tax Act.

December 22, 2017,

H.R.

also known as the Tax Cuts and Jobs Act (the

“2017

Tax Act”), was enacted. This enactment resulted in a number of significant changes to U.S. federal income tax law for U.S. corporations. Most notably for the Company, the statutory U.S. federal corporate income tax rate was changed from

35%

21%

for corporations.