All pre-tax loss from continuing operations is derived from the U.S. No tax expense was recorded for the years ended December 31, 2017 and 2016. We maintain a full valuation allowance against our net deferred tax assets, which precludes us from recognizing a tax benefit for our current operating losses. Our historical lack of profitability is a key factor in concluding that there is insufficient evidence to support the realizability of our deferred tax assets.

Taxes computed at the statutory federal income tax rate of 34% are reconciled to the income tax provision as follows:

Significant components of our deferred tax assets and liabilities consist of the following as of December 31 (in thousands):

On December 22, 2017, the U.S. Congress enacted the Tax Act. The Tax Act contains several significant tax reform provisions which includes, among others, a reduction of the U.S. corporate statutory tax rate from 34% to 21% (starting January 1, 2018), a one-time mandatory repatriation transition tax on the net accumulated earnings and profits of a U.S. taxpayer’s foreign subsidiaries, and a minimum tax on certain foreign earnings in excess of 10% of the foreign subsidiaries' tangible assets (i.e., global intangible low-taxed income or “GILTI”).

The reduction in the U.S. corporate statutory tax rate to 21% requires the Company to re-measure its net deferred tax assets using the newly enacted tax rate. As a result of the revaluation, the Company reduced its deferred tax assets by $62 million, which was offset by a reduction in valuation allowance of the same amount. Therefore, the impact of the corporate statutory tax rate change has a net tax effect of zero upon income tax expense and net loss.

The mandatory tax on accumulated foreign earnings and profits requires a one-time transition tax whereby accumulated foreign earnings prior to the enactment of the Tax Act are deemed to be repatriated and are taxed at a rate of 15.5% for cash and cash equivalents and 8% for non-liquid assets. As a result of an overall deficit in the accumulated earnings and profits of the Company’s specified foreign corporations, there is no income tax effect in the current period.

The GILTI provision imposes a tax on certain foreign earnings in excess of a deemed return on the foreign subsidiaries' tangible assets. Current FASB guidance indicates that either recording deferred taxes on GILTI inclusions or treating any taxes on GILTI inclusions as a period cost are both acceptable methods as an accounting policy election. The Company has not recorded deferred taxes for the impact of GILTI in the period of enactment due to its policy election to consider the impact of GILTI as a period expense.

As of December 31, 2017, the Company provided a full valuation allowance against its gross deferred tax assets because realization of these benefits could not be reasonably assured. The $65 million decrease in the valuation allowance for the period December 31, 2016 to December 31, 2017 was primarily due to the revaluation of deferred tax assets and adjustments to state net operating losses.

We have research and development credit carryforwards of $5.4 million at December 31, 2017, that will begin to expire in 2021.

As of December 31, 2017, the Company has federal net operating and other loss carryforwards of $496 million and state net operating loss carryforwards between $114 million to $302 million. Due to a 2012 IRC Section 382 ownership change approximately $3 million of Federal net operating losses will expire unused. These net operating loss carryforwards begin to expire in 2019 for U.S. federal income tax purposes and in 2028 for state income tax purposes. The ultimate availability of the federal and state net operating loss carryforwards to offset future income may be subject to limitation under the rules regarding changes in stock ownership as determined by the Internal Revenue Code. Included in “Other,” totaling $2.3 million, in the table above are; $1.2 million of international net operating loss carryforwards, and $0.9 million of U. S. capital loss carryforwards.

The Company has determined that there are no unrecognized tax benefits as of December 31, 2017 and 2016. Historically, the Company has not incurred interest or penalties associated with unrecognized tax benefits and no interest or penalties were recognized during the years ended December 31, 2017 or 2016. The Company has adopted a policy whereby amounts related to interest and penalties associated with unrecognized tax benefits are classified as income tax expense when incurred.

We did not make any income tax payments related to our continuing operations in 2017 or 2016. The Company files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. Due to the generation of net operating losses, all tax years for which the Company filed a tax return remain open. The Company's U.S. federal tax return for the year ended December 31, 2013 was audited by the Internal Revenue Service and such audit was completed in 2017.  No adjustments were made as a result of the audit.

The Company discontinued operations in Indonesia in 2012. In 2013 the Company received notification that additional income and VAT taxes would be due from the Company's subsidiary, P. T. Motricity Indonesia for the years ended 2010 to 2012. The assessment resulted in tax totaling approximately $0.7 million which was recorded in 2013. Subsequently P. T. Motricity Indonesia paid taxes and penalties as assessed. However, the Company determined that there remained approximately $0.4 million of unpaid amounts. Currently the Company is in the process of liquidating its corporate structure in Indonesia and management has decided to leave the remaining balance as a liability until such time as the liquidation is complete. The outcome of this matter remains uncertain.