INCOME TAXES

12 Months Ended

Dec. 31, 2020

ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the Company’s opinion, it is uncertain whether they will generate sufficient taxable income in the future to fully utilize the net deferred tax asset. Accordingly, a valuation allowance equal to the deferred tax asset has been recorded. The total deferred tax asset is calculated by multiplying a 21% marginal tax rate by the cumulative net operating losses of $2,052,107. The total valuation allowance is equal to the total deferred tax asset.

The tax effects of significant items comprising the Company's net deferred taxes as of December 31, 2020 and 2019 were as follows:

	2020			2019
Cumulative net operating losses	$	2,197,661		$	2,197,661
Deferred tax assets: (21% Federal, 0% Delaware)
Net operating loss carry forwards		461,509			461,509
Valuation allowance		(461,509	)		(461,509	)
	$	—		$	—

The income tax provision differs from the amount of income tax determined by applying the combined U.S. federal and state income tax rates of 21% to pretax income from continuing operations for the years ended December 31, 2020 and 2019 due to the following:

	2020			2019
Tax benefit at statutory rate	$	(22,694	)	$	(22,694	)
(Gain) loss on derivative liability		(215,873	)		1,313
Change in valuation allowance					21,381
Actual tax expense	$	—		$	—

The Company’s net operating loss carry forwards of approximately $2,197,661 expire in various years through 2038. The Company has not evaluated the impact of possible limitations on the utilization of its net operating loss carry forwards in future years under Section 382, if any, as a result of any changes in control.

- 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

Premier Product Group, Inc. 10-K/A