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INCOME TAXES
 12 Months Ended
Dec. 31, 2012
Income Taxes  
INCOME TAXES

NOTE 11– INCOME TAXES

 

With the advent of the Merger, we determined that VitaMed would become the sole focus of our company and previous business performed by our predecessor was discontinued. Because of these events, deferred income taxes are determined by calculating the loss from operations of our company starting October 4, 2011. Deferred income taxes are determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of our assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in our tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases. For the years December 31, 2012 and 2011, there was no provision for income taxes, current or deferred.

 

 At December 31, 2012 and 2011, we had a net operating loss carry forward of approximately $14,900,000 and $2,100,000 million, respectively, available to offset future taxable income through 2032.

 

At December 31, 2012 and 2011, we had state net operating loss carryforwards of approximately $12,800,000 and $25,000, respectively, available to offset future losses through 2032. We established valuation allowances equal to the full amount of the deferred tax assets because of the uncertainty of the utilization of the operating losses in future periods. We periodically assess the likelihood that we will be able to recover the deferred tax assets. We consider all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income.

 

Our deferred tax asset and liability as presented in financial statements consist of the following:

 

   2012   2011 
Deferred Income Tax Assets:          
Net operating losses  $5,920,861   $748,404 
Valuation allowance   (5,920,861)   (748,404)
Deferred Income Tax Assets, net  $-0-   $-0- 

 

Our provision for income taxes differs from applying the statutory U.S. federal income tax rate to the income before income taxes. The primary differences result from deducting certain expenses for financial statement purposes but for federal income tax purposes.

 

A reconciliation between taxes computed at the federal statutory rate and the consolidated effective tax rate is as follows:

 

   2012   2011 
Federal statutory tax rate   35.0%   35.0%
State tax rate, net of federal tax benefit   5.5%   -0-%
Adjustment in valuation allowances   (18.2)%   (5.8)%
Permanent and other differences   (22.3)%   (29.2)%
Provision (Benefit) for Income Taxes   -0-%   -0-%