INCOME TAX

12 Months Ended

Dec. 31, 2024

8.	INCOME TAX

The components of loss before income taxes consist of the following:

Schedule of loss before income taxes
	Years ended December 31,
	2024			2023

U.S.	$	(129,121	)	$	(327,520	)
BVI		(11,775	)		(94,144	)
Foreign		140,023			(961,783	)

Loss before income taxes	$	(873	)	$	(1,383,447	)

At December 31, 2024, the Company has U.S. federal operating loss carryforwards of approximately $4 million. Due to U.S. enacted Public Law 115-97, known as the Tax Cuts and Jobs Act (the “TCJA”) in 2017, U.S. federal net operating loss carryforwards in the amount of $5,600,000, generated after 2017 have an indefinite carryforward period. U.S. net operating loss carryforwards, in the amount of $2,600,000, generated prior to 2018 will expire, if unused, beginning in 2034. State net operating loss carryforwards will begin to expire, if unused, in 2034.

At December 31, 2024, the Company’s subsidiary operating in Malaysia has net operating loss of approximately $2.3 million. Net operating loss carryforwards will begin to expire, if unused, in 2025.

At December 31, 2024, the Company’s subsidiary operating in Bangladesh has net operating loss carryforwards of $79,054 which can be carried forward for a maximum period of six years.

The Company files tax returns as prescribed by the tax laws of the jurisdictions in which the Company operates. Under applicable U.S. federal statutes, tax years ended December 31, 2018 through December 31, 2024 remain subject to examination. Under applicable state statutes, state corporate tax returns filed for the Company for years ended December 31, 2017 through December 31, 2024 remain subject to examination. Malaysia corporate tax returns remain subject to examination for tax years ended December 31, 2018 through December 31, 2024.

The Company follows the provision of ASC 740 which prescribes a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the Company has taken or expects to take on a tax return. The Company did not have any unrecognized tax positions or benefits as of December 31, 2024 and 2023. The Company recognizes interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. We do not expect any material changes in our unrecognized tax benefits over the next 12 months.

The Company’s ability to utilize U.S. net operating loss carryforwards to offset future taxable income may be deferred or limited significantly if the Company were to experience an “ownership change” as defined in section 382 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law. In general, an ownership change occurs when the ownership of the Company’s stock by 5 percent or more shareholders “5-percent shareholders” exceeds 50 percentage points within a three-year period. We have not conducted a Section 382 study to determine whether the use of our U.S. net operating losses is limited. We may have experienced ownership changes in the past, and we may experience ownership changes in the future, some of which are outside our control. This could limit the amount of net operating losses that we can utilize annually to offset future taxable income or tax liabilities.

- Definition

The entire disclosure for income tax.

+ References

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+ Details

Leet Technology Inc. 10-K/A