Skye Bioscience, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

PROVISION FOR INCOME TAXES

PROVISION FOR INCOME TAXES

12 Months Ended

Oct. 31, 2013

NOTE 8 - PROVISION FOR INCOME TAXES

The Company follows ASC 740, Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 34% to the net income before provision for income taxes for the following reasons:

		October 31, 2013		October 31, 2012
Income tax (benefit) expense at statutory rate	$	(1,300)	$	1,623
Valuation allowance		1,300		(1,377)
Income tax expense per books	$	-	$	246

The net operating loss of $3,323 begins expiring in 2031.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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