Annual report pursuant to Section 13 and 15(d)

INCOME TAXES

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INCOME TAXES
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 19 - INCOME TAXES

 

As of December 31, 2020, we estimate we will have net operating loss carryforwards available to offset future federal income tax of approximately $21.7 million. These carryforwards will expire between the years 2028 through 2037. Under the Tax Reform Act of 1986, the amount of and the benefit from net operating losses that can be carried forward may be limited in certain circumstances. Events that may cause changes in our tax carryovers include, but are not limited to, a cumulative ownership change of more than 50% over a three-year period. Therefore, the amount available to offset future taxable income may be limited. We carry a deferred tax valuation allowance equal to 100% of total deferred assets. In recording this allowance, we have considered a number of factors, but chiefly, our operating losses from inception. We have concluded that a valuation allowance is required for 100% of the total deferred tax assets as it is more likely than not that the deferred tax assets will not be realized.

 

 

The non-current deferred tax asset is summarized below:

 

    2021     2020  
Deferred tax assets                
Net operating loss carry forwards   $ 5,557,000     $ 5,408,000  
Intangible and fixed assets     -       110,000  
Accrued expenses     30,000       105,000  
Total deferred tax assets     5,587,000       5,623,000  
Deferred tax liabilities                
Depreciation and amortization     (107,000 )     -  
Valuation allowance     (5,480,000 )     (5,623,000 )
Net deferred tax asset   $ -     $ -  

 

The benefit for income taxes differed from the amount computed using the U.S. federal income tax rate of 21% for December 31, 2021 and 2020, as follows:

 

    2021     2020  
             
Income tax benefit (expense)   $ (69,000 )   $ 573,000  
Non-deductible items     (142,000 )     28,000  
State and other benefits included in valuation     16,000       196,000  
Exclusion of income (losses) of pass-through entity     52,000       (13,000 )
Change in valuation allowance     143,000       (784,000 )
Income tax benefit   $ -     $ -