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Income Taxes | 12 Months Ended
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Dec. 31, 2015
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES For 2015, 2014, and 2013, UDR believes that we have complied with the REIT requirements specified in the Code. As such, the REIT would generally not be subject to federal income taxes. For income tax purposes, distributions paid to common stockholders may consist of ordinary income, qualified dividends, capital gains, unrecaptured section 1250 gains, return of capital, or a combination thereof. Distributions that exceed our current and accumulated earnings and profits constitute a return of capital rather than taxable income and reduce the stockholder’s basis in their common shares. To the extent that a distribution exceeds both current and accumulated earnings and profits and the stockholder’s basis in the common shares, it generally will be treated as a gain from the sale or exchange of that stockholder’s common shares. Taxable distributions paid per common share were taxable as follows for the years ended December 31, 2015, 2014, and 2013:
| Year Ended December 31,
| 2015 |  | 2014 |  | 2013
Ordinary income | $ | 0.595 |  |  | $ | 0.695 |  |  | $ | 0.744 |
Qualified ordinary income | — |  |  | 0.139 |  |  | — |
Long-term capital gain | 0.329 |  |  | 0.105 |  |  | 0.114 |
Unrecaptured section 1250 gain | 0.168 |  |  | 0.076 |  |  | 0.067 |
Total | $ | 1.092 |  |  | $ | 1.015 |  |  | $ | 0.925 |
We have a TRS that is subject to federal and state income taxes. A TRS is a C-corporation which has not elected REIT status and as such is subject to United States federal and state income tax. The components of the provision for income taxes are as follows for the years ended December 31, 2015, 2014, and 2013 (dollars in thousands):
| Year Ended December 31,
| 2015 |  | 2014 |  | 2013
Income tax (benefit)/provision |  |  |  |  |
Current |  |  |  |  |
Federal | $ | 29 |  |  | $ | 147 |  |  | $ | (1,030 | )
State | 871 |  |  | 550 |  |  | 846 |
Total current | 900 |  |  | 697 |  |  | (184 | )
Deferred |  |  |  |  |
Federal | (4,173 | ) |  | 20,138 |  |  | (6,907 | )
State | (613 | ) |  | 5,159 |  |  | (1,190 | )
Total deferred | (4,786 | ) |  | 25,297 |  |  | (8,097 | )
Total income tax (benefit)/provision | $ | (3,886 | ) |  | $ | 25,994 |  |  | $ | (8,281 | )
Classification of income tax (benefit)/provision: |  |  |  |  |
Continuing operations | $ | (3,886 | ) |  | $ | (15,098 | ) |  | $ | (7,299 | )
Gain/(loss) on sale of real estate owned | — |  |  | 41,087 |  |  | — |
Discontinued operations | — |  |  | 5 |  |  | (982 | )
Deferred income taxes are provided for the change in temporary differences between the basis of certain assets and liabilities for financial reporting purposes and income tax reporting purposes. The expected future tax rates are based upon enacted tax laws. The components of our TRS deferred tax assets and liabilities are as follows for the years ended December 31, 2015, 2014, and 2013 (dollars in thousands):
| Year Ended December 31,
| 2015 |  | 2014 |  | 2013
Deferred tax assets: |  |  |  |  |
Federal and state tax attributes | $ | 2,227 |  |  | $ | — |  |  | $ | 13,069 |
Book/tax depreciation | 9,016 |  |  | 6,692 |  |  | 19,354 |
Construction capitalization differences | — |  |  | 75 |  |  | — |
Debt and interest deductions | — |  |  | — |  |  | 10,311 |
Other | 707 |  |  | 401 |  |  | — |
Total deferred tax assets | 11,950 |  |  | 7,168 |  |  | 42,734 |
Valuation allowance | (81 | ) |  | — |  |  | (1,310 | )
Net deferred tax assets | 11,869 |  |  | 7,168 |  |  | 41,424 |
Deferred tax liabilities: |  |  |  |  |
Construction capitalization differences | — |  |  | — |  |  | (3,766 | )
Investment in partnerships | — |  |  | — |  |  | (5,080 | )
Other | (107 | ) |  | (192 | ) |  | (305 | )
Total deferred tax liabilities | (107 | ) |  | (192 | ) |  | (9,151 | )
Net deferred tax asset | $ | 11,762 |  |  | $ | 6,976 |  |  | $ | 32,273 |
Income tax benefit/(provision), net differed from the amounts computed by applying the U.S. statutory rate of 35% to pretax income/(loss) for the years ended December 31, 2015, 2014, and 2013 as follows (dollars in thousands):
| Year Ended December 31,
| 2015 |  | 2014 |  | 2013
Income tax (benefit)/provision |  |  |  |  |
U.S. federal income tax (benefit)/provision | $ | (4,383 | ) |  | $ | 28,819 |  |  | $ | (8,493 | )
State income tax provision | 442 |  |  | 2,678 |  |  | 46 |
Other items | (26 | ) |  | (137 | ) |  | 246 |
Conversion of certain TRS entities to REITs | — |  |  | (5,770 | ) |  | — |
Valuation allowance | 81 |  |  | 404 |  |  | (80 | )
Total income tax (benefit)/provision | $ | (3,886 | ) |  | $ | 25,994 |  |  | $ | (8,281 | )
As of December 31, 2015, the Company, had federal net operating loss carryovers (“NOL”) of $27.1 million expiring in 2032 through 2035, of this amount $5.7 million is available to the Company. As of December 31, 2015, the TRS had state NOLs of approximately $64.7 million expiring in 2020 through 2032, of this amount $4.2 million is available to the TRS. As of December 31, 2015, the Company had a valuation allowance of $0.1 million against its state NOL. During the year ended December 31, 2015, the Company had a net change of $0.1 million in the valuation allowance. A portion of these attributes are still available to the subsidiary REITs, but are carried at a zero effective tax rate. For the year ended December 31, 2015, the Tax benefit/(provision), net decreased $11.2 million as compared to 2014. The decrease was primarily a result of the Company recognizing a one-time tax benefit of $5.8 million in 2014 related to the conversion of certain taxable REIT subsidiary entities into REITs. Additionally, Gain/(loss) on sale of real estate owned, net of tax included $0.0 and approximately $41.1 million of tax for the years ended December 31, 2015 and 2014, respectively. The remaining decrease is a result of the conversion of certain TRS subsidiaries to REITs in 2014, causing a zero rate to be applied to their 2015 income. GAAP defines a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The financial statements reflect expected future tax consequences of income tax positions presuming the taxing authorities’ full knowledge of the tax position and all relevant facts, but without considering time values. GAAP also provides guidance on derecognition, classification, interest and penalties, accounting for interim periods, disclosure and transition. The Company evaluates our tax position using a two-step process. First, we determine whether a tax position is more likely than not (greater than 50 percent probability) to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The Company will then determine the amount of benefit to recognize and record the amount of the benefit that is more likely than not to be realized upon ultimate settlement. When applicable, UDR recognizes interest and/or penalties related to uncertain tax positions in income tax expense. As of December 31, 2015 and 2014, UDR has no material unrecognized income tax benefits/(provisions). The Company files income tax returns in federal and various state and local jurisdictions. With few exceptions, the Company is no longer subject to federal, state and local income tax examination by tax authorities for years prior to 2011. The tax years 2011 through 2014 remain open to examination by the major taxing jurisdictions to which the Company is subject.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 + Details
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