Quarterly report pursuant to sections 13 or 15(d)

INCOME TAXES

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INCOME TAXES
 9 Months Ended
Sep. 30, 2012
Income Tax Disclosure [Abstract]  
INCOME TAXES

 

For the nine months ended September 30, 2012 and year ended December 31, 2011, we have recognized a net profit. However, since we have a previous net operating loss carry-forward of in excess of net income of approximately $1,160,000, no tax liability has been recorded. The losses will be carried forward and can be used through the year 2028 to offset future taxable income up to a cumulative total of approximately $1,514,000. The cumulative net operating loss carry-forward for income tax purposes may differ from the cumulative financial statement loss due to permanent differences and timing differences between book and tax reporting. Additionally, we have a foreign tax credit carry-forward of approximately $215,644 that can be used in the future to offset federal income tax owed.

 

We periodically review the need for a valuation allowance against deferred tax assets based upon earnings history and trends. We believe that the valuation allowances provided are appropriate.

 

The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:

 

Deferred tax asset attributable to:   September 30, 2012   December 31, 2011
Net operating loss carryover   $ 548,612     $ 555,334  
Valuation allowance     (548,612 )     (555,334 )
Net deferred tax asset   $ 0     $ 0