Annual report pursuant to Section 13 and 15(d)

INCOME TAX

v3.21.2
INCOME TAX
12 Months Ended
Dec. 31, 2020
INCOME TAX [Abstract]  
INCOME TAX
NOTE 10. INCOME TAX

The Company’s net deferred tax assets are as follows:

    
December 31,
2020
 
Deferred tax asset
     
Net operating loss carryforward
 
$
3,581
 
Organizational costs/Startup expenses
   
25,004
 
Total deferred tax asset
   
28,585
 
Valuation allowance
   
(28,585
)
Deferred tax asset, net of allowance
 
$
 

The income tax provision consists of the following:

    
December 31,
2020
 
Federal
     
Current
 
$
 
Deferred
   
(28,585
)
         
State
       
Current
   
 
Deferred
   
 
Change in valuation allowance
   
28,585
 
Income tax provision
 
$
 

As of December 31, 2020, the Company had approximately $17,000 of U.S. federal net operating loss carryovers available to offset future taxable income. The Company has federal net operating loss carryforwards of approximately $17,000 which can be carried forward indefinitely.

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 July 30, 2020 (inception) through December 31, 2020, the change in the valuation allowance was $28,585.

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 fair value of warrant liability
   
(19.3
)%
Transaction costs -allocated to warrant liabilities
   
(1.50
)%
Change in valuation allowance
   
(0.20
)%
Income tax provision
   
0.0
%

The Company files income tax returns in the U.S. federal jurisdiction in various state and local jurisdictions and is subject to examination by the various taxing authorities.