v3.25.3
INCOME TAXES
 12 Months Ended
Jul. 31, 2025
INCOME TAXES  
INCOME TAXES

NOTE 3 - INCOME TAXES

 

The income tax (benefit) provision consists of the following:

 

 

 

July 31, 2025

 

 

July 31, 2024

 

 

 

 

 

 

 

 

Current

 

$(12,900)

 

$-0-

 

Deferred

 

 

2,000-

 

 

-0-

 

Change in valuation allowance

 

 

10,900

 

 

-0-

 

 

 

 

 

 

 

 

 

 

Total

 

$-0-

 

 

$-0-

 

 

A reconciliation of the statutory federal U.S. income tax rate to the Company’s effective income tax rate is as follows:

 

 

 

July 31, 2025

 

 

July 31, 2024

 

 

 

 

 

 

% of

 

 

 

 

 

% of

 

 

 

 

 

 

Pretax

 

 

 

 

 

Pretax

 

 

 

 

 

 

Amount

 

 

Income

 

 

Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit at US federal income tax rate

 

 

(10,900)

 

 

(21)

 

$(13,900)

 

 

(21)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in valuation allowance

 

$10,900

 

 

 

21

 

 

(13,900)

 

 

21

 

 

$

-0-

 

 

 

 -0-

 

 

$-0-

 

 

 

 -0-

 

 

The components of the net deferred taxes are as follows:

 

 

 

July 31, 2025

 

 

July 31, 2024

 

 

 

 

 

 

 

 

Net operating loss carryforwards

 

$182,500

 

 

$173,400

 

 

 

 

 

 

 

 

 

 

Compensation and miscellaneous

 

 

11,800

 

 

 

10,000

 

 

 

 

 

 

 

 

 

 

Deferred tax assets

 

 

194,300

 

 

 

183,400

 

 

 

 

 

 

 

 

 

 

Valuation Allowance

 

 

(194,300)

 

 

(183,400)

 

 

 

 

 

 

 

 

 

Net deferred tax assets:

 

$

-0-

 

 

$

-0-

 

 

The valuation allowance for deferred tax assets as of July 31, 2025 and 2024 was $194,300 and $183,400, respectively. The change in the total valuation for the year ended July 31, 2025 was an increase of $10,900, and for the year ended July 31, 2024 was an increase of $15,700. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the net operating losses and temporary differences become deductible. Management considered projected future taxable income and tax planning strategies in making this assessment. The value of the deferred tax assets was offset by a valuation allowance, due to the current uncertainty of the future realization of the deferred tax assets.

 

As of July 31, 2025, the Company had net operating loss (“NOL”) carryforwards of approximately $869,000 that may be available to offset future taxable income.

 

Of this amount:

 

·

Approximately $518,000 of NOLs were generated in tax years beginning on or before August 1, 2017 and expire at various dates through 2038.

·

Approximately $351,000 of NOLs were generated in tax years beginning after August 1, 2018 and may be carried forward indefinitely, subject to the 80 percent taxable-income limitation under current U.S. federal tax law.

 

Utilization of these NOLs may be subject to limitation under Internal Revenue Code Section 382 if the Company experiences an ownership change.

 

The Company follows ASC 740-10, which provides guidance for the recognition and measurement of certain tax positions in an enterprise’s financial statements. Recognition involves a determination of whether it is more likely than not that a tax position will be sustained upon examination with the presumption that the tax position will be examined by the appropriate taxing authority having full knowledge of all relevant information.

 

The Company’s policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the statement of operations. As of August 1, 2024, the Company had no unrecognized tax benefits and no charge during the year ended July 31, 2025, and accordingly, the Company did not recognize any interest or penalties during the year ended July 31, 2025 related to unrecognized tax benefits. There is no accrual for uncertain tax positions as of July 31, 2025.

 

The Company files U.S. income tax returns and a state income tax return. With few exceptions, the U.S. and state income tax returns filed for the tax years ended on July 31, 2021 and thereafter are subject to examination by the relevant taxing authorities.