Transition report pursuant to Rule 13a-10 or 15d-10

Income Tax

v2.4.0.8
Income Tax
 10 Months Ended
Aug. 31, 2014
Income Tax [Text Block]
12.

Income Tax

The following table reconciles the income tax benefit at the U.S. Federal statutory income tax rates to income tax benefit at the Company’s effective tax rates at August 31, 2014 and 2013:

      2014     2013  
  Income (loss) before taxes $ (3,257,712 ) $ (343,551 )
  Statutory tax rate   35%     35%  
  Expected income tax (recovery) $ (1,140,199 ) $ (120,242 )
  Non-deductible items $ 24,259 $     136  
  Change in estimates $ (530 ) $ -  
  Change in valuation allowance $ 1,116,470 $     120,106  
  Total income taxes (recovery) $  Nil $     nil  

Deferred taxes reflect the tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes. Deferred tax assets (liabilities) at August 31, 2014 and 2013 are comprised of the following:

      2014     2013  
  Net capital loss carryforwards $ 2,126,795   $ 1,548,213  
  Financial instrument $     $   -  
  Oil and gas property $ 657,652   $   1,667,977  
      2,784,447     1,667,977  
  Valuation allowance $ (2,784,447 ) $ (1,667,977 )
  Net deferred tax assets (liabilities) $  Nil   $  Nil  

The Company has net operating loss carry forwards of approximately $4,436,757 (2013 - $4,093,059) which may be carried forward to apply against future taxable income for US tax purposes, subject to the final determination by the taxation authority, expiring in the following years:

  Year   Amount  
  2028 $ 719,957  
  2029   753,138  
  2030   552,025  
  2031   538,128  
  2032   220,416  
  2033   343,698  
  2034   1,309,395  
  Total $ 4,436,757