Note 13—Income Tax
We account for income taxes under the asset and liability method. For the TRSs, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. We provide a valuation allowance, from time to time, for deferred tax assets for which we do not consider realization of such assets to be more likely than not.
As of December 31, 2017, we had no deferred tax assets and liabilities or unrecognized tax benefits recorded. On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJA”) was signed into law. The TCJA makes major changes to the Code, including lowering the statutory United States federal income tax rate from 35% to 21% effective January 1, 2018. We have completed an assessment of the impact of the TCJA on us and do not believe it will have a material impact on our financial position or results of operations. We do not anticipate a significant change in unrecognized tax benefits within the next 12 months.
During the year ended December 31, 2017, we sold assets that were either subject to Section 337(d) of the Code (see additional discussion in Note 2) or were held by TRSs. These transactions resulted in $3,195 of current income tax expense which has been recorded in gain on sale of property, net of tax in the consolidated statement of operations.