Income Taxes

12 Months Ended

May 31, 2013

Note 11: Income Taxes

From the Company’s inception (January 10, 2007) through the year ended May 31, 2013 and 2012, the Company incurred net operating losses and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. As of May 31, 2013 and 2012, the Company had approximately $296,507 and $158,016 of federal and state operating losses. The net operating loss carry forwards, if not utilized, will begin to expire in 2031.

The components of the Company’s deferred tax asset are as follows:


	May
	2013	2012
Deferred tax assets:
Net operating loss carry forwards	103,778	55,306
Valuation allowance	(103,778)	(55,306)
Total deferred tax assets	$ -	$ -

The valuation allowance for deferred tax assets as of May 31, 2013 and 2012 was $103,778 and $55,306, respectively. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would not be realized as of May 31, 2013 and 2012, and recorded a full valuation allowance.

Reconciliation between the statutory rate and the effective tax rate is as follows at May 31:


	2013 & 2012

Federal statutory tax rate	(35.0)%
Permanent difference and other	35.0%

- 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

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+ Details

US TUNGSTEN CORP. 10-K/A