Note 5 - Income Taxes

9 Months Ended

Sep. 30, 2020

NOTE

– INCOME TAXES

The provision for (benefit from) income taxes differs from the amount computed by applying the statutory United States federal income tax rate of

21%

to income (loss) before income taxes. The sources of the difference are as follows:

	Three months ended September 30, 2020			Three months ended September 30, 2019			Nine months ended September 30, 2020			Nine months ended September 30, 2019
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Expected tax	$	(911	)	$	(890	)	$	(3,459	)	$	(3,390	)

Increase in valuation allowance		911			890			3,459			3,390

Income tax provision	$	—		$	—		$	—		$	—

Significant components of the Company's deferred income tax assets are as follows:

	September 30, 2020			December 31, 2019
	(Unaudited)
Net operating loss carryforward	$	62,169		$	58,710

Less valuation allowance		(62,169	)		(58,710	)

Deferred income tax assets - net	$	—		$	—

Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income

may

be limited.

NOTE

– INCOME TAXES (continued)

Based on management‘s present assessment, the Company has

not

yet determined it to be more likely than

not

that a deferred tax asset of

$62,169

attributable to the future utilization of the

$296,043

net operating loss carryforward as of

September 30, 2020

will be realized. Accordingly, the Company has maintained a

100%

allowance against the deferred tax asset in the financial statements at

September 30, 2020.

The Company will continue to review this valuation allowance and make adjustments as appropriate.

$238,932

of the

$296,043

net operating loss carryforward expires in years

2024,

2025,

2026,

2027,

2028,

2029,

2030,

2031,

2032,

2033,

2034,

2035,

2036

and

2037

in the amounts of

$7,297,

$12,450,

$9,621,

$20,306,

$16,739,

$15,325,

$16,318,

$18,203,

$19,160,

$20,410,

$20,535,

$19,605,

$23,278

and

$19,685,

respectively. The remaining

$57,111

of the

$296,043

net operating loss carryforward does

not

expire and can be carried forward indefinitely to offset future taxable income.

- 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

MADISON AVE HOLDINGS INC 10-Q