Annual report pursuant to Section 13 and 15(d)

Income Tax

v3.21.1
Income Tax
10 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
INCOME TAX

NOTE 9 — INCOME TAX


The Company’s net deferred tax asset at December 31, 2020 is as follows:


    December 31,  
    2020  
Deferred tax asset      
Net operating loss carryforward   $ 49,304  
Total deferred tax asset     49,304  
Valuation Allowance     (49,304 )
Deferred tax asset, net allowance   $  

The income tax provision for the period from February 26, 2020 (inception) through December 31, 2020 consists of the following:


    December 31,  
    2020  
Federal      
Current   $  
Deferred     (49,304 )
         
State and Local        
Current      
Deferred      
         
Change in valuation allowance     49,304  
         
Income tax provision   $  

As of December 31, 2020, the Company had an approximate $235,000 U.S. federal net operating loss carryover 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 period from February 26, 2020 (inception) through December 31, 2020, the change in the valuation allowance was $49,304.


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


    December 31,
2020
 
       
Statutory federal income tax rate     21.0 %
State taxes, net of federal tax benefit     0.0 %
Change in value of derivative liability     (24.8 )%
Change in valuation allowance     3.8 %
Income tax provision     0.0 %

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