Annual report pursuant to Section 13 and 15(d)

Income Taxes

Income Taxes
12 Months Ended
Dec. 31, 2016
Income Tax Disclosure [Abstract]  
Income Taxes



The Company accounts for income taxes under ASC Topic 740: Income Taxes which requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carry forwards. ASC Topic 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. The Company has a net operating loss carry forward for tax purposes totaling approximately $0.8 million at December 31, 2016, expiring through the year 2036.


For U.S. purposes, the Company has not completed its evaluation of NOL utilization limitations under Internal Revenue Code, as amended (the “Code”) Section 382, change of ownership rules. If the Company has had a change in ownership, the NOL’s would be limited as to the amount that could be utilized each year, based on the Code. The Company has also, not completed its review of NOL’s pertaining to years the Company was known as “Silver Horn Mining Ltd.” and “Great West Resources, Inc.”, which may not be available due to IRC Section 382 and because of a change in business line that may eliminate NOL’s associated with ““Silver Horn Mining Ltd.” and “Great West Resources, Inc.”


The table below summarizes the differences between the Company’s effective tax rate of 39% and the statutory federal rate as follows for the years ended December 31, 2016 and 2015:


    December 31, 2016     December 31, 2015  
Tax expense (benefit) computed at “expected” statutory rate   $ (880,547 )   $ (701,382 )
State income taxes, net of benefit     -       -  
Permanent differences :                
Stock based compensation and consulting     384,974       364,067  
Loss (gain) from change in fair value of derivative liability     (144,872 )     21,575  
Other     550,549       128,408  
Valuation allowance     89,895       187,332  
Net income tax expense/(benefit)   $ -     $ -  


The Company’s wholly owned subsidiary, GTCL, is a United Kingdom (“UK”) Limited Company and files tax returns in the UK. Its estimated tax liability for December 31, 2016 and 2015 is approximately $0 and $0, respectively.


Deferred tax assets and liabilities are provided for significant income and expense items recognized in different years for tax and financial reporting purposes. Temporary differences, which give rise to a net deferred tax asset is as follows:


    December 31, 2016     December 31, 2015  
Deferred tax assets:                
Net operating loss carryforward   $ 277,227      $ 187,332  
Total deferred tax assets   $ 277,227     $ 187,332  
Deferred tax liabilities:                
Book basis of property and equipment in excess of tax basis   $ -     $ -  
Total deferred tax liabilities   $ -     $ -  
Net deferred tax asset before valuation allowance   $ 277,227     $ 187,332  
Less: valuation allowance     (277,227     (187,332
Net deferred tax asset   $ -     $ -  


The net operating losses were increased from $187,332 at December 31, 2015 to $277,227 at December 31, 2016. After consideration of all the evidence, both positive and negative, management has recorded a full valuation allowance at December 31, 2016 and 2015, due to the uncertainty of realizing the deferred income tax assets.