INCOME TAXES
The net income tax benefit differs from the amount computed by applying the statutory federal income tax rate to CTRS' income before taxes follows ($ in thousands):
|
| | | | | | | | | | | | | | | | | | | | |
| 2017 | | 2016 | | 2015 |
| Amount | | Rate | | Amount | | Rate | | Amount | | Rate |
Federal income tax benefit (expense) | $ | 47 |
| | 35 | % | | $ | (1,159 | ) | | (35 | )% | | $ | 778 |
| | 35 | % |
State income tax benefit (expense), net of federal income tax effect | 5 |
| | 4 | % | | (132 | ) | | (4 | )% | | 90 |
| | 4 | % |
Change in deferred tax assets as a result of change in tax law | (340 | ) | | (254 | )% | | — |
| | — | % | | — |
| | — | % |
Valuation allowance | 283 |
| | 211 | % | | 1,282 |
| | 39 | % | | (833 | ) | | (37 | )% |
Other | 5 |
| | 4 | % | | 9 |
| | — | % | | (35 | ) | | (2 | )% |
Benefit applicable to income (loss) from continuing operations | $ | — |
| | — | % | | $ | — |
| | — | % | | $ | — |
| | — | % |
The tax effect of significant temporary differences representing deferred tax assets and liabilities of CTRS as of December 31, 2017 and 2016 are as follows (in thousands):
|
| | | | | | | |
| 2017 | | 2016 |
Income from unconsolidated joint ventures | $ | 19 |
| | $ | (188 | ) |
Federal and state tax carryforwards | 590 |
| | 514 |
|
Total deferred tax assets | 609 |
| | 326 |
|
Valuation allowance | (609 | ) | | (326 | ) |
Net deferred tax asset | $ | — |
| | $ | — |
|
A valuation allowance is required to be recorded against deferred tax assets if, based on the available evidence, it is more likely than not that such assets will not be realized. When assessing the need for a valuation allowance, appropriate consideration should be given to all positive and negative evidence related to this realization. This evidence includes, among other things, the existence of current and recent cumulative losses, forecasts of future profitability, the length of statutory carryforward periods, the Company’s history with loss carryforwards and available tax planning strategies.
As of December 31, 2017 and 2016 the deferred tax asset of CTRS equaled $609,000 and $326,000, respectively, with a valuation allowance placed against the full amount of each. The conclusion that a valuation allowance should be recorded as of December 31, 2017 and 2016 was based the lack of evidence that CTRS, could generate future taxable income to realize the benefit of the deferred tax assets.