Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.20.4
Income Taxes
12 Months Ended
Oct. 31, 2020
Income Tax Disclosure [Abstract]  
Income Taxes

NOTE 7 - INCOME TAXES

 

The Company provides for income taxes and the related accounts under the asset and liability method. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates expected to be in effect during the year in which the basis differences reverse. Valuation allowances are established when management determines it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.

 

The provision (benefit) for income taxes comprises:

 

    October 31, 2020     October 31, 2019  
Current federal benefit   $ (12,502 )   $ (75,004 )
Foreign tax (benefit) expense     (38,161 )     35,582  
                 
Total Current Tax Benefit     (50,663 )     (39,422 )
                 
Deferred federal expense     305,125       1,046,776  
Deferred foreign benefit     (196,240 )     -  
                 
Deferred Tax Expense     108,885       1,046,776  
                 
Total Income Tax Expense   $ 58,222     $ 1,007,354  

 

The expense for income taxes differed from the U.S. statutory rate due to the following:

 

    October 31, 2020     October 31, 2019  
Statutory tax rate     21.0 %     21.0 %
Change in deferred taxes     (17.1 )%     (4.2 )%
Alternative Minimum Tax (refund)     (1.1 )%     (1.2 )%
Foreign tax expense     (1.1 )%     0.5 %
                 
Total     1.7 %     16.1 %

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

 

Significant components of the Company’s deferred tax assets and liabilities are as follows:

 

    October 31, 2020     October 31, 2019  
Noncurrent deferred tax assets                
U.S. NOL carryforwards   $ 272,993     $ 670,787  
Other     -       (39,103 )
Stock option compensation     92,669       -  
Foreign R&D refunds     196,240       -  
                 
Total   $ 561,902     $ 631,684  

 

As of October 31, 2020, we had U.S. federal net operating loss (NOL) carryforwards of $1,299,969, which expire in 2029.