| Income Taxes | 6. Income
Taxes The
reconciliation of income tax benefit at the U.S. statutory rate of 35% for the period from inception to April 30, 2018 and 21%
for the period ending April 30, 2019 to the Company’s effective tax rate is as follows:
2019 2018
US Statutory Rate 21 % 35 %
Tax benefit at U.S. statutory rate $ 5,729 $ 14,625
Change in valuation
allowance (5,729 ) (14,625 )
Net deferred
income tax asset $ – $ – The
tax effects of temporary differences that give rise to significant portions of the net deferred tax assets at April 30, 2019 and
2018 are as follows:
2019 2018
Net operating loss: 115,812 183,470
Valuation allowance (115,812 ) (183,470 )
$ – $ –
Change in valuation allowance:
Balance, prior year $ (183,470 ) $ (168,845 )
Effect of change in tax rate 73,388 –
Increase in valuation
allowance (5,729 ) (14,625 )
Balance, current year $ (115,812 ) $ (183,470 ) The
Company has approximately $551,484 of net operating losses (“NOL”) carried forward to offset taxable income, if any,
in future years. Of the net operating loss from the Company’s operations, $524,201 can be carried forward for twenty years
and $27,283 can be carried forward with no time limit from the year of initial loss pursuant to US laws and regulations. In assessing
the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the
deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future
taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal
of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the
assessment, management has established a full valuation allowance against all of the deferred tax asset relating to NOLs for every
period because it is more likely than not that all of the deferred tax asset will not be realized. On
December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was signed into law making significant changes
to the Internal Revenue Code. Changes include, but are not limited to, a federal corporate tax rate decrease from 35% to 21% for
tax years beginning after December 31, 2017, the transition of U.S international taxation from a worldwide tax system to a territorial
system, and a one-time transition tax on the mandatory deemed repatriation of foreign earnings. The Company has estimated its
provision for income taxes in accordance with the Tax Act and guidance available as of the date of this filing but has kept the
full valuation allowance. The
Company’s net operating loss carryforwards are subject to review and possible adjustment by the Internal Revenue Service
and are subject to certain limitations in the event of cumulative changes in the ownership interest of significant stockholders
over a three-year period in excess of 50%. |
