INCOME TAX

3 Months Ended

Nov. 30, 2013

NOTE 6 - INCOME TAX

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

In accordance with the Internal Revenue Code, the availability to carry forward net operating losses incurred prior to 1987 may be limited due to significant changes in ownership. Prior management of the Company believed that the majority of the Company's net operating losses would begin to expire in 2006. Current management of the Company has decided not to record the net operating losses prior to September 1, 2010 due to the uncertainty of the availability to utilize those net operating losses.

Net deferred tax assets consist of the following components as of August 31, 2013 and 2012:


	August 31, 2013			August 31, 2012
Deferred Tax Assets - Non-current:

NOL Carryover	$	490,861	$	165,000

Less valuation allowance		(490,861)		(165,000)

Deferred tax assets, net of valuation allowance	$	-	$	- -

The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the period ended August 31, 2013 and 2012 due to the following:


	2013			2012


Book Income	$	(274,367)	$	(177,000)
Non deductible expenses		12,000		12,000
Valuation allowance		262,367		165,000
	$	-	$	-

At August 31, 2013, the Company had net operating loss carry forwards of approximately $491,000 that may be offset against future taxable income from the year 2013 to 2032. No tax benefit has been reported as of August 31, 2013.

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal Income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References+ Details

JuQun,Inc. 10-Q