Annual report pursuant to Section 13 and 15(d)

Income Tax

v2.4.0.6
Income Tax
12 Months Ended
Oct. 31, 2012
Income Tax [Text Block]
11.

Income Tax

The Company is subject US tax laws. The following table reconciles the expected income taxes expense (recovery) at the US statutory income tax rates to the amounts recognized in the consolidated statements of operations for the years ended October 31, 2012 and 2011:

      2012     2011  
  Income (loss) before taxes $   (251,510 ) $   (538,226 )
  Statutory tax rate   35%     35%  
  Expected income tax (recovery) $   (88,028 ) $   (188,379 )
  Non-deductible items $   7,080   $   62,926  
  Change in estimates $   (58,748 ) $   Nil  
  Change in valuation allowance $   139,696   $   125,453  
  Total income taxes (recovery) $   Nil   $   Nil  

Deferred income 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 October 31, 2012 and 2011 are comprised of the following:

      2012     2011  
  Net capital loss carryforwards $   1,548,213   $   1,408,175  
  Financial instrument $  (341 ) $   -  
    $   1,547,871   $   1,408,175  
  Valuation allowance $   (1,547,871 ) $   (1,408,175 )
  Net deferred tax assets (liabilities) $   Nil   $   Nil  

The Company has net operating loss carryforwards of approximately $4,423,000 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   220,000  
       
Total $   4,423,000  

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.