Annual report pursuant to Section 13 and 15(d)

INCOME TAX

v3.22.1
INCOME TAX
12 Months Ended
Dec. 31, 2021
Income Tax  
INCOME TAX

NOTE 8 — INCOME TAX

The Company did not have any significant deferred tax assets or liabilities as of December 31, 2020.

The income tax provision for the year ended December 31, 2021 and December 31, 2020 consists of the following:

    

December 31,

    

December 31,

2021

2020

Federal

Current

$

$

Deferred

(84,534)

(413)

State and Local

Current

Deferred

Change in valuation allowance

84,534

413

Income tax provision

$

$

The Company’s net deferred tax assets at December 31, 2021 and December 31, 2020 are as follows:

 

    

December 31, 

    

December 31, 

2021

2020

Deferred tax assets

 

  

Net operating loss carryforward

$

30,909

$

263

Startup/Organizational expenses

 

54,038

 

150

Total deferred tax assets

84,947

413

Valuation allowance

 

(84,947)

 

(413)

Deferred tax assets, net of valuation allowance

$

$

As of December 31, 2021, the Company had $147,184 of U.S. federal net operating loss carryovers available to offset future taxable income.

In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of 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 temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the year ended December 31, 2021, the change in the valuation allowance was $84,534.

A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2021 and December 30, 2020 is as follows:

December 31, 

December 31, 

 

    

2021

    

2020

 

    

  

    

  

Statutory federal income tax rate

21.0

%

21.0

%

State taxes, net of federal tax benefit

0.0

%

0.0

%

Valuation allowance

(21.0)

%

(21.0)

%

Income tax provision

0.0

%

0.0

%

The Company’s effective tax rates for the periods presented differ from the expected (statutory) rates due to the recording of full valuation allowances on deferred tax assets.

The Company files income tax returns in the U.S. federal jurisdiction and is subject to examination by the various taxing authorities. The Company files income tax returns  in the U.S. federal jurisdiction and California which remain open and subject to examination.