The (provision) benefit for income taxes includes the following components:

 

  

 

The components of our net deferred income tax asset are as follows:

 

Each quarter we assess our deferred tax asset to determine whether all or any portion of the asset is more likely than not unrealizable under ASC We are required to establish a valuation allowance for any portion of the asset we conclude is more likely than not to be unrealizable. Our assessment considers, among other things, the nature, frequency and severity of our prior and cumulative losses, forecasts of our future taxable income, the duration of statutory carryforward periods, our utilization experience with operating loss and tax credit carryforwards, and tax planning alternatives.

 

As of we had a million deferred tax asset which was partially offset by a deferred tax asset valuation allowance of million related to state net operating loss carryforwards that are not more likely than not to be realized. In addition, as of such date, million (or approximately million and million, respectively, of federal and state net operating loss carryforwards on a gross basis) of our deferred tax asset related to net operating loss carryforwards is subject to the Internal Revenue Code Section ("Section

gross annual deduction limitation of million for both federal and state purposes. Additionally, million, (or approximately million of our state deferred tax assets on a gross basis) of our state deferred tax assets related to net operating losses is subject to Section  limitations resulting from our merger with Ryland. The remaining million (or approximately million of state net operating loss carryforwards on a gross basis) represents state net operating loss carryforwards that are not limited by Section Our gross federal and state net operating loss carryforwards of approximately million and billion, respectively, if unused, will begin to expire in and respectively. The remaining deferred tax asset balance of million represented deductible timing differences, primarily related to inventory impairments and financial accruals, which have no expiration date.

 

As of we had a million deferred tax asset which was partially offset by a deferred tax asset valuation allowance of million related to state net operating loss carryforwards that are limited by shorter carryforward periods. In addition, as of such date, million (or approximately million and million, respectively, of federal and state net operating loss carryforwards on a gross basis) of our deferred tax asset related to net operating loss carryforwards is subject to the Internal Revenue Code Section ("Section gross annual deduction limitation of million for both federal and state purposes. The remaining million represents state net operating loss carryforwards that are not limited by Section Our gross federal and state net operating loss carryforwards of approximately million and billion, respectively, if unused, will begin to expire in and respectively. The remaining deferred tax asset represented deductible timing differences, primarily related to inventory impairments and financial accruals, which have no expiration date.

 

Our provision for income taxes was million related primarily to our million of pretax income.

The effective tax rate differs from the federal statutory rate of due to the following items:

 

 

As of our liability for unrecognized tax benefits was million, of which million, if recognized, would affect our effective tax rate. Our liabilities for unrecognized tax benefits are included in accrued liabilities on the accompanying consolidated balance sheets. We classify estimated interest expense and penalties related to unrecognized tax benefits in our provision for income taxes. As of and accrued interest and penalties related to unrecognized benefits was million and million, respectively. During and we accrued interest and penalties of million, million and million, respectively.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, excluding accrued interest, is as follows:

 

We do not expect a significant change in the liability for unrecognized tax benefits during the next months. In addition, as of we remained subject to examination by various tax jurisdictions for the tax years ended through