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Income Taxes | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The Company has elected to be taxed as a REIT under the applicable provisions of the Code for every year beginning with the year ended December 31, 1985. The Company has also elected for certain of its subsidiaries to be treated as TRSs (the “TRS entities”) which are subject to federal and state income taxes. All entities other than the TRS entities are collectively referred to as the “REIT” within this Note 16. Certain REIT entities are also subject to state, local and foreign income taxes. Distributions with respect to our common stock can be characterized for federal income tax purposes as ordinary dividends, capital gains, nondividend distributions or a combination thereof. The following table shows the characterization of our annual common stock distributions per share:
| Year Ended December 31,
| 2019 |  | 2018 |  | 2017
Ordinary dividends(1) | $ | 0.7633 |  |  | $ | 0.9578 |  |  | $ | 1.4800 |
Capital gains | 0.2714 |  |  | 0.5222 |  |  | — |
Nondividend distributions | 0.4453 |  |  | — |  |  | — |
| $ | 1.4800 |  |  | $ | 1.4800 |  |  | $ | 1.4800 |
_______________________________________
(1) | For the year ended December 31, 2019 all $0.7633 of ordinary dividends qualified as business income for purposes of Code Section 199A. For the year ended December 31, 2018 the amount includes $0.9414 of qualified business income for purposes of Code Section 199A and $0.0164 of qualified dividend income for purposes of Code Section 1(h)(11).
The TRS entities subject to tax reported losses before income taxes from continuing operations of $100 million, $59 million, and $58 million for the years ended December 31, 2019, 2018, and 2017, respectively. The REIT’s losses from continuing operations before income taxes from the U.K. prior to deconsolidation in June 2018 were $11 million and $4 million for the years ended December 31, 2018 and 2017, respectively. The total income tax expense (benefit) from continuing operations consists of the following components (in thousands):
| Year Ended December 31,
| 2019 |  | 2018 |  | 2017
Current |  |  |  |  |
Federal | $ | 261 |  |  | $ | (568 | ) |  | $ | 949 |
State | 729 |  |  | 4,003 |  |  | 1,504 |
Foreign | — |  |  | 84 |  |  | 1,737 |
Total current | $ | 990 |  |  | $ | 3,519 |  |  | $ | 4,190 |
Deferred |  |  |  |  |
Federal | $ | (16,061 | ) |  | $ | (11,905 | ) |  | $ | 2,730 |
State | (2,191 | ) |  | (4,589 | ) |  | (5,889 | )
Foreign | — |  |  | (4,879 | ) |  | (2,364 | )
Total deferred | $ | (18,252 | ) |  | $ | (21,373 | ) |  | $ | (5,523 | )
Total income tax expense (benefit) | $ | (17,262 | ) |  | $ | (17,854 | ) |  | $ | (1,333 | )
On December 22, 2017, the Tax Cuts and Jobs Act was signed into law. As a result of the reduced U.S. federal corporate tax rate, the Company recorded a tax expense of $17 million, due to a remeasurement of deferred tax assets and liabilities, which is included in total deferred tax expense (benefit) in the table above. The following table reconciles income tax expense (benefit) from continuing operations at statutory rates to actual income tax expense recorded (in thousands):
| Year Ended December 31,
| 2019 |  | 2018 |  | 2017
Tax benefit at U.S. federal statutory income tax rate on income or loss subject to tax | $ | (20,923 | ) |  | $ | (17,857 | ) |  | $ | (21,085 | )
State income tax expense, net of federal tax | (3,845 | ) |  | (1,313 | ) |  | (1,222 | )
Gross receipts and margin taxes | 1,430 |  |  | 1,580 |  |  | 1,716 |
Foreign rate differential | — |  |  | 301 |  |  | 632 |
Effect of permanent differences | 20 |  |  | (34 | ) |  | 6 |
Return to provision adjustments | 157 |  |  | (278 | ) |  | 1,597 |
Remeasurement of deferred tax assets and liabilities | — |  |  | — |  |  | 17,080 |
Increase (decrease) in valuation allowance | 4,583 |  |  | (253 | ) |  | (57 | )
Change in tax status of TRS | 1,316 |  |  | — |  |  | — |
Total income tax expense (benefit) | $ | (17,262 | ) |  | $ | (17,854 | ) |  | $ | (1,333 | )
Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table summarizes the significant components of the Company’s deferred tax assets and liabilities from continuing operations (in thousands):
| December 31,
| 2019 |  | 2018 |  | 2017
Property, primarily differences in depreciation and amortization, the basis of land, and the treatment of interest and certain costs | $ | 40,466 |  |  | $ | 31,034 |  |  | $ | 31,691 |
Net operating loss carryforward | 33,771 |  |  | 20,559 |  |  | 10,720 |
Expense accruals and other | 3,258 |  |  | 2,424 |  |  | 229 |
Valuation allowance | (4,878 | ) |  | (295 | ) |  | (548 | )
Net deferred tax assets | $ | 72,617 |  |  | $ | 53,722 |  |  | $ | 42,092 |
Deferred tax assets and liabilities are included in other assets, net and accounts payable and accrued liabilities, respectively. At December 31, 2019 the Company had a net operating loss (“NOL”) carryforward of $134 million related to the TRS entities. This amount can be used to offset future taxable income, if any. If unused, $22 million will begin to expire in 2035. The remainder, totaling $112 million, may be carried forward indefinitely. The Company records a valuation allowance against deferred tax assets in certain jurisdictions when it cannot sustain a conclusion that it is more likely than not that it can realize the deferred tax assets during the periods in which these temporary differences become deductible. The deferred tax asset valuation allowance is adequate to reduce the total deferred tax assets to an amount that the Company estimates will “more-likely-than-not” be realized. The following table summarizes the Company’s unrecognized tax benefits (in thousands):
| December 31,
| 2019 |  | 2018 |  | 2017
Total unrecognized tax benefits at January 1 | $ | — |  |  | $ | — |  |  | $ | — |
Gross amount of increases for prior years' tax positions | 469 |  |  | — |  |  | — |
Total unrecognized tax benefits at December 31 | $ | 469 |  |  | $ | — |  |  | $ | — |
The Company had unrecognized tax benefits of $0.5 million at December 31, 2019, that, if recognized, would reduce the annual effective tax rate. The Company accrued no interest or penalties related to the unrecognized tax benefits during 2019. The Company does not expect the unrecognized tax benefits to increase or decrease materially in 2020. The Company files numerous U.S. federal, state and local income and franchise tax returns. With a few exceptions, the Company is no longer subject to U.S. federal, state, or local tax examinations by taxing authorities for years prior to 2016. For the years ended December 31, 2019, 2018, and 2017 the tax basis of the Company’s net assets was less than the reported amounts by $1.2 billion, $1.4 billion, and $1.7 billion, respectively.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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