INCOME TAXES

12 Months Ended

Aug. 31, 2024

Note 7 – INCOME TAXES

The Company adopted the provisions of uncertain tax positions as addressed in ASC 740 “Income Taxes” (“ASC 740”). As a result of the implementation of ASC 740, the Company recognized no increase in the liability for unrecognized tax benefits. As of November 30, 2023, the Company had net operating loss carry forwards of approximately $979. 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 valuation allowance at August 31, 2023 was approximately $206. The net change in valuation allowance during year ended August 31, 2024 was $42,215. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized.

The provision for Federal income tax consists of the following:

		As of August 31, 2024		As of August 31, 2023
Non-current deferred tax assets:
Net operating loss carry forward	$	(42,215)	$	(979)
Total deferred tax assets		(8,865)		(206)
Valuation allowance	$	8,865	$	206
Net deferred tax assets	$	-	$	-

The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of August 31, 2024. All tax years since inception remain open for examination by taxing authorities.

F-9

The related deferred tax benefit on the above unutilized tax losses has a full valuation allowance not recognized against it as there is no certainty of its realization. Management has evaluated tax positions in accordance with ASC 740 and has not identified any significant tax positions, other than those disclosed.

The actual tax benefit at the expected rate of 21% differs from the expected tax benefit for the year ended August 31, 2024 as follows:

		Year ended August 31, 2024		Year ended August 31, 2023
Computed “expected” tax expense (benefit)	$	8,865	$	(206)
Change in valuation allowance	$	(8,865)	$	206
Actual tax expense (benefit)	$	-	$	-

- Definition

Disclosure of accounting policy for income taxes, which may include its accounting policies for recognizing and measuring deferred tax assets and liabilities and related valuation allowances, recognizing investment tax credits, operating loss carryforwards, tax credit carryforwards, and other carryforwards, methodologies for determining its effective income tax rate and the characterization of interest and penalties in the financial statements.

+ References + Details

E-Smart Corp. 10-K