Annual report pursuant to Section 13 and 15(d)

Income Tax

v3.3.0.814
Income Tax
 12 Months Ended
Aug. 31, 2015
Income Tax [Text Block]
12.

Income Tax

The following table reconciles the income tax benefit at the U.S. Federal statutory rate to income tax benefit at the Company's effective tax rates at August 31, 2015 and 2014:

    2015     2014  
Income (loss) before taxes $ (1,934,352 ) $ (3,257,711 )
Statutory tax rate   35%     35%  
Expected income tax (recovery) $ (677,023 ) $ (1,140,199 )
Non-deductible items $ 98,764   $ 24,259  
Change in estimates $ 646,711     (530 )
Change in valuation allowance $ (68,453 ) $ 1,116,470  
Total income taxes (recovery) $   Nil   $   Nil  

Deferred taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes. Deferred tax assets (liabilities) at August 31, 2015 and 2014 are comprised of the following:

    2015     2014  
Net capital loss carryforwards $ 2,715,944   $ 2,126,795  
Oil and Gas Property $   -   $ 657,652  
  $ 2,715,944   $ 2,784,447  
Valuation allowance $ (2,715,944 ) $ (2,784,447 )
Net deferred tax assets (liabilities) $   Nil   $   Nil  

The Company has net operating loss carryforwards of approximately $7,760,000 which may be carried forward to apply against future year income tax for US tax purposes.

Year   Amount  
2025 $ 76,000  
2026   508,000  
2027   1,056,000  
2028   720,000  
2029   753,000  
2030   552,000  
2031   538,000  
2032   252,000  
2033   344,000  
2034   1,309,000  
2035   1,652,000  
Total $ 7,760,000  

The deferred tax assets have not been recognized because at this stage of the Company’s development, it is not determinable that future taxable profit will be available against which the Company can utilize such deferred income tax assets.