INCOME TAXES
We have elected to be taxed as a REIT under the Internal Revenue Code. We intend to maintain REIT status. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement to distribute at least 90% of our taxable ordinary income. In addition, the Company is required to meet certain asset and income tests.
As a REIT, we will generally not be subject to corporate level Federal income tax on taxable income we distribute currently to our stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to Federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income or property, and to Federal income and excise taxes on our undistributed taxable income and capital gains. We are currently statutorily open to audit by the Internal Revenue Service for the years ended December 31, 2014 through 2017 and are statutorily open to audit by state taxing authorities for the years ended December 31, 2013 through 2017. We have one TRS that has extended the statute of limitations for the year ended December 31, 2013 until September 30, 2018 for purposes of reviewing a carryback claim.
The provision for (benefit from) income taxes for the years ended December 31, 2017, 2016, and 2015 are as follows:
|
| | | | | | | | | | | |
| December 31, 2017 | | December 31, 2016 | | December 31, 2015 |
Current | $ | 8,658 |
| | $ | 804 |
| | $ | 3,134 |
|
Deferred | (19,554 | ) | | 97 |
| | (41,468 | ) |
Total | $ | (10,896 | ) | | $ | 901 |
| | $ | (38,334 | ) |
Realization of a deferred tax benefit is dependent upon generating sufficient taxable income in future periods. The company has $81.6 million of state loss carryforwards that are currently scheduled to expire in subsequent years through 2037.
Each TRS and certain REIT entities subject to state income taxes are tax paying components for purposes of classifying deferred tax assets and liabilities. Net deferred tax assets (liabilities) are summarized as follows:
|
| | | | | | | | | | | |
| December 31, 2017 | | December 31, 2016 | | December 31, 2015 |
Total deferred tax assets | $ | 29,801 |
| | $ | 22,090 |
| | $ | 34,870 |
|
Valuation allowance | (8,740 | ) | | (15,147 | ) | | (15,127 | ) |
Net deferred tax assets | 21,061 |
| | 6,943 |
| | 19,743 |
|
Total deferred tax liabilities | (2,428 | ) | | (3,843 | ) | | (1,289 | ) |
Net deferred tax assets (liabilities) | $ | 18,633 |
| | $ | 3,100 |
| | $ | 18,454 |
|
Due to the uncertainty of the realization of certain tax carryforwards, we have established valuation allowances on those deferred tax assets that we do not reasonably expect to realize. Deferred tax assets that we believe have only a remote possibility of realization have not been recorded.
The tax effects of temporary differences and carryforwards included in the net deferred tax assets (liabilities) as of December 31, 2017, December 31, 2016 and December 31, 2015 are summarized as follows:
|
| | | | | | | | | | | |
| December 31, 2017 (1) | | December 31, 2016 | | December 31, 2015 |
Operating loss and tax credit carryforwards (2) | $ | 47,577 |
| | $ | 42,496 |
| | $ | 18,541 |
|
Other TRS property, primarily differences in basis of assets and liabilities | (20,204 | ) | | (24,249 | ) | | 15,040 |
|
Valuation allowance | (8,740 | ) | | (15,147 | ) | | (15,127 | ) |
Net deferred tax assets (liabilities) | $ | 18,633 |
| | $ | 3,100 |
| | $ | 18,454 |
|
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| |
(1) | Due to the changes in the Tax Cuts and Jobs Act, the deferred tax assets and liabilities including the valuation allowances were revalued as of December 31, 2017 using the new corporate tax rate. |
| |
(2) | Includes solar and other tax credits of $33.6 million, $20.6 million and $4.1 million as of December 31, 2017, December 31, 2016 and December 31, 2015, respectively. |
We have no unrecognized tax benefits recorded pursuant to uncertain tax positions as of December 31, 2017 and December 31, 2016. Uncertain tax positions of $6.1 million as of December 31, 2014, excluding interest, were recognized in 2015 upon the expiration of the statute of limitations.