INCOME TAXES

12 Months Ended

Dec. 31, 2014

NOTE 13 – INCOME TAXES

The Company provides for income taxes under ASC 740, "Accounting for Income Taxes". ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. 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.

The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 34% to the net loss before provision for income taxes for the following reasons:

	Years Ended
	December 31,
	2014			2013
				(Restated)
Income tax rate		34%			34%
Income tax benefit	$	(1,318,757	)	$	(693,601	)
Less change in valuation allowance		1,318,757			693,601
Income tax expense per books	$	-		$	-

The deferred income tax assets consist of the following at:

	Years Ended
	December 31,
	2014				2013
					(Restated)
Deferred tax assets:
Net operating losses		$	2,002,758			$	1,222,313
Deferred stock based compensation			1,280,500				389,300
Deferred tax assets			3,283,258				2,004,513
Less valuation allowance			(3,283,258	)			(2,004,513
Net deferred tax attributes		$	-			$	-

As of December 31, 2014, the Company has approximately $7,952,506 of net operating losses carried forward to offset taxable income in future years which expire commencing in fiscal 2016 for federal income tax reporting purposes are subject to annual limitations. When a change in ownership occurs, net operating loss carry forwards may be limited as to use in future years.

Pursuant to Internal Revenue Code Sections 382, use of our net operating loss carry forward could be limited if a cumulative change in ownership of more than 50% occurs within a three-year period.

The Company files income tax returns in the United States federal jurisdiction. As of December 31, 2013, the tax returns for the Company for the years ending 2010 through 2013 remain open to examination by the Internal Revenue Service. The Company is not currently under examination for any period.

- 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

Baristas Coffee Company, Inc. 10-K