INCOME TAXES

9 Months Ended

Sep. 30, 2019

NOTE 5. INCOME TAXES

The Company files income tax returns in the U.S. federal jurisdiction. The Company is not currently under examination by the Internal Revenue Service or any state income tax authorities. The 2015 through 2017 tax years remain subject to examination by the Internal Revenue Service.

On December 22, 2017 H.R. 1, originally known as the Tax Cuts and Jobs Act, (the Tax Act) was enacted. Among the significant changes to the U.S. Internal Revenue Code, the Tax Act lowers the U.S. federal corporate income tax rate (the “Federal Tax Rate”) from 35% to 21% effective January 1, 2018. The 21% Federal Tax Rate will apply to earnings reported for the full 2018 fiscal year. In addition, the Company must re-measure its net deferred tax assets and liabilities using the Federal Tax Rate that will apply when these amounts are expected to reverse. As of September 30, 2019 and December 31, 2018, the Company can determine a reasonable estimate for certain effects of tax reform and is recording that estimate as a provisional amount. The provisional remeasurement of the deferred tax assets and allowance valuation of deferred tax assets at December 31, 2018 resulted in a net effect of $0 discrete tax expenses (benefit).

As of September 30, 2019, the Company had net operating loss carry forwards of approximately $589,902 that may be available to reduce future years’ taxable income. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.

The provision for federal income tax consists of the following:

	For the Nine Months Ended September 30,
	2019			2018
Federal income tax expenses (benefit) attributable to:
Current Operations	$	1,277		$	(20,963	)
Less: valuation allowance		(1,277	)		20,963
Net provision for Federal income taxes	$	—		$	—

The significant items comprising the Company’s net deferred tax amount as of September 30, 2019 and December 31, 2018 is as follows:

	September 30, 2019			December 31, 2018
Deferred tax asset attributable to:	(Unaudited)
Net operating loss carryover	$	123,879		$	125,156
Less: valuation allowance		(123,879	)		(125,156	)
Net deferred tax asset	$	—		$	—

The difference between the effective rate reflected in the provision for income taxes on loss before taxes and the amounts determined by applying the applicable statutory U.S. tax rate for the nine months ended September 30, 2019 and 2018 are analyzed below:

	For the Nine Months Ended September 30,
	2019			2018
Statutory tax benefit		(21	)%		(21	)%
Permanent items		—	%		—	%
Change in deferred tax asset valuation allowance		21	%		21	%
Provision for income taxes		—	%		—	%

For the nine months ended September 30, 2019 and 2018, the Company had no unrecognized tax benefits and related interest and penalties expenses. Currently, the Company is not subject to examination by major tax jurisdictions.

HAHA GENERATION CORP. 10-Q