Quetta Acquisition Corp Income Taxes Disclosure

Note 10 — Income Taxes

 

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

 Schedule of Net Deferred Tax Assets

		For the Year Ended December 31, 2025				For the Year Ended December 31, 2024
Deferred tax asset
Net operating loss carryforward		$	-			$	-
Startup/Organization Expenses			315,657				189,190
Total deferred tax asset			315,657				189,190
Valuation allowance			(315,657	)			(189,190	)
Deferred tax asset, net of allowance		$	-			$	-

 

The income tax provision consists of the following:

 Schedule of Income Tax Provision

		For the Year Ended December 31, 2025				For the Year Ended December 31, 2024
Federal
Current		$	167,047			$	754,259
Deferred			(126,467	)			(154,800	)
State
Current		$	-			$	-
Deferred			-				-
Change in valuation allowance			126,467				154,800
Income tax provision		$	167,047			$	754,259

 

 

 

A reconciliation of the Company’s statutory income tax rate to the Company’s effective income tax rate is as follows (in thousands):

 Schedule of Effective Income Tax Rate

		For the Year Ended December 31, 2025
Income at U.S. statutory rate		$	(128,914	)			21.00	%
State taxes, net of federal benefit			-				0.00	%
Transaction costs			181,277				(29.53	)%
Other adjustment			(11,783	)			1.92	%
Valuation allowance			126,467				(20.60	)%
Income tax rate		$	167,047				(27.21	)%

 

		For the Year Ended December 31, 2024
Income at U.S. statutory rate		$	599,459				21.00	%
State taxes, net of federal benefit			-				0.00	%
Transaction costs			-				-
Valuation allowance			154,800				5.42	%
Income tax rate		$	754,259				26.42	%

 

As of December 31, 2025 and 2024, the Company did not have any U.S. federal and state 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. The change in the valuation allowance was $126,467 and $154,800 for the year ended 2025 and 2024, respectively.

 

The provision for U.S. federal income tax was $167,047 and $754,259 for the years ended 2025 and 2024, respectively. The Company’s tax return for the years ended 2025, 2024 and 2023 remain open and subject to examination.