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Income Taxes
 6 Months Ended 12 Months Ended
Dec. 31, 2016
Jun. 30, 2016
Income Tax Disclosure [Abstract]    
Income Taxes
6. Income Taxes

 

Deferred taxes are recorded for all existing temporary differences in the Company’s assets and liabilities for income tax and financial reporting purposes. Due to the valuation allowance for deferred tax assets, as noted below, there were no net deferred tax benefit or expense for the six months ended December 31, 2016.

 

There is no current or deferred income tax expense or benefit allocated to continuing operations for the six months ended December 31, 2016.

 

The provision for income taxes is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The items causing this difference are as follows: 

 

   December 31, 2016  June 30, 2016
Tax expense (benefit) at U.S. statutory rate  $(241,116)  $(111,343)
State income tax expense (benefit), net of federal benefit   (35,458)   (16,374)
Effect of non-deductible expenses          
Other          
Change in valuation allowance   276,574    127,717 
   $—     $—   

 

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2016 were as follows:

 

Deferred tax assets (liability), noncurrent:   
Net operating loss  $668,422 
Valuation allowance   (668,422)
   $—   

 

Change in valuation allowance:

 

Balance, June 30, 2016  $391,848 
Increase in valuation allowance   276,574 
Balance, December 31, 2016   668,422 

 

Since management of the Company believes that it is more likely than not that the net deferred tax assets will not provide future benefit, the Company has established a 100 percent valuation allowance on the net deferred tax assets as of December 31, 2016. 

 

As of December 31, 2016, the Company had federal and state net operating loss carry-forwards totaling approximately $1,700,000 which begin expiring in 2022.
6. Income Taxes

 

Deferred taxes are recorded for all existing temporary differences in the Company’s assets and liabilities for income tax and financial reporting purposes. Due to the valuation allowance for deferred tax assets, as noted below, there were no net deferred tax benefit or expense for the year ended June 30, 2016.

 

There is no current or deferred income tax expense or benefit allocated to continuing operations for the year ended June 30, 2016.

 

The provision for income taxes is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The items causing this difference are as follows: 

 

    June 30, 2016   June 30, 2015
Tax expense (benefit) at US. statutory rate   $ (146,889 )   $ (79,200 )
State income tax expense (benefit): net of federal benefit   $ (21,659 )   $ (11,700 )
Effect of non-deductible expenses                
Other                
Change in valuation allowance   $ 168,548     $ 90,900  
    $ —       $ —    

 

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at June 30, 2016 are as follows:

 

 

Deferred tax assets (liability), noncurrent:        
Net operating loss   $ 431,923  
Valuation allowance     (431,923 )
    $ —    

 

Change in valuation allowance:

 

Balance, June 30, 2015   $ 223,300  
Increase in valuation allowance     168,548  
Balance, June 30, 2016     391,848  

 

Since management of the Company believes that it is more likely than not that the net deferred tax assets will not provide future benefit, the Company has established a 100 percent valuation allowance on the net deferred tax assets as of June 30, 2016.

 

As of June 30, 2016, the Company had federal and state net operating loss carry-forwards totaling approximately $1,004,000 which begin expiring in 2022.