Income Taxes

3 Months Ended

Sep. 30, 2011

15. Income Taxes

The Company has losses carried forward for income tax purposes to 30 September 2011. The Company has fully reserved for any benefits of these losses. The deferred tax consequences of temporary differences in reporting items for consolidated financial statement and income tax purposes are recognized, as appropriate. Realization of the future tax benefits related to the deferred tax assets is dependent on many factors, including the Company’s ability to generate taxable income within the net operating loss carryforward period. Management has considered these factors in reaching its conclusion as to the valuation allowance for financial reporting purposes.

The provision for refundable federal income tax consists of the following:

	For the nine month period ended 30 September 2011			For the nine month period ended 30 September 2010
		$			$
Deferred tax asset attributable to:
Current operations		2,262,777			3,130,961
Non deductible expenses		(79,815	)		(933,330	)
Change in valuation allowance		(2,182,962	)		(1,445,411	)

Future income tax recovery		-			752,220

The composition of the Company’s deferred tax assets as at 30 September 2011 and 31 December 2010 is as follows:

	As at 30 September 2011			As at 31 December 2010 (Audited)
		$			$


Net income tax operating loss carryforward		45,131,846			38,538,946

Statutory federal income tax rate		33.55	%		33.63	%
Effective income tax rate		0.00	%		0.00	%

Future income tax assets (liabilities)
Tax loss carryforward		15,142,606			12,959,644
Less: Valuation allowance		(15,142,606	)		(12,959,644	)

Future income tax assets (liabilities)		-			-

The potential income tax benefit of these losses has been offset by a full valuation allowance.

As at 30 September 2011, the Company has an unused net operating loss carryforward balance of approximately $45,131,846 that is available to offset future taxable income. This unused net operating loss carryforward balance for income tax purposes expires between the years 2021 to 2031.

- 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

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

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Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 109

-Paragraph 136, 172

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 109

-Paragraph 43, 44, 45, 46, 47, 48, 49

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 08

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Reference 5: http://www.xbrl.org/2003/role/presentationRef

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-Name Accounting Standards Codification

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-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

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-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

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Reference 8: http://www.xbrl.org/2003/role/presentationRef

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+ Details

GOLDSANDS DEVELOPMENT CO 10-Q