Annual report pursuant to Section 13 and 15(d)

Income Taxes

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Income Taxes
 11 Months Ended
Dec. 31, 2011
Income Taxes
8. Income Taxes

 

Components of the Company’s deferred tax assets at December 31, 2011 are as follows:

 

Net operating loss carryforwards   $ 45,000  
Amortizable start-up costs     267,000  
      312,000  
Valuation allowance     (312,000 )
    $ -  

 

The Company established a valuation allowance of approximately $312,000 as of December 31, 2011, which fully offsets the deferred tax asset of approximately $312,000.  The deferred tax asset results from applying an effective combined federal and state tax rate of 40% to start-up costs of approximately $668,000 and net operating losses of approximately $113,000. The Company’s net operating losses will expire beginning in 2031.  Effective tax rates differ from statutory rates due to timing differences in the deductibility of expenses and the establishment of the valuation allowance.