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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income TaxesThe 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 17. Certain REIT entities are also subject to state, local and foreign income taxes. Distributions with respect to the Company’s 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 the Company’s annual common stock distributions per share:
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
Ordinary dividends(1) | $ | 0.7139 |  |  | $ | 0.7633 |  |  | $ | 0.9578 |
Capital gains(2) | 0.5298 |  |  | 0.2714 |  |  | 0.5222 |
Nondividend distributions | 0.2363 |  |  | 0.4453 |  |  | — |
| $ | 1.4800 |  |  | $ | 1.4800 |  |  | $ | 1.4800 |
_______________________________________ (1)For the year ended December 31, 2020 all $0.7139 of ordinary dividends qualified as business income for purposes of Code Section 199A. 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). (2)Pursuant to Treasury Regulation §1.1061-6(c), the Company is disclosing additional information related to the capital gain dividends for purposes of Section 1061 of the Internal Revenue Code (IRC). IRC Section 1061 is generally applicable to direct and indirect holders of “applicable partnership interests.” The “One Year Amounts” and “Three Year Amounts” required to be disclosed are both zero with respect to the 2020 distributions, since all capital gains relate to IRC Section 1231 gains. The Company’s pretax income (loss) from continuing operations was $151 million, $170 million, and $833 million for the years ended December 31, 2020, 2019, and 2018, respectively, of which $80 million, $200 million, and $852 million was attributable to the REIT entities for the years then ended. The TRS entities subject to tax reported income (losses) before income taxes from continuing operations of $71 million, $(30) million, and $(8) million for the years ended December 31, 2020, 2019, and 2018, respectively. The REIT’s loss from continuing operations before income taxes from the U.K. prior to deconsolidation in June 2018 was $11 million for the year ended December 31, 2018. The total income tax expense (benefit) from continuing operations consists of the following components (in thousands):
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
Current |  |  |  |  |
Federal | $ | (9,164) |  |  | $ | 104 |  |  | $ | 973 |
State | 1,431 |  |  | 445 |  |  | 3,883 |
Foreign | — |  |  | — |  |  | 84 |
Total current | $ | (7,733) |  |  | $ | 549 |  |  | $ | 4,940 |
Deferred |  |  |  |  |
Federal | $ | (2,849) |  |  | $ | (5,920) |  |  | $ | (2,681) |
State | 1,159 |  |  | (108) |  |  | (1,776) |
Foreign | — |  |  | — |  |  | (4,879) |
Total deferred | $ | (1,690) |  |  | $ | (6,028) |  |  | $ | (9,336) |
Total income tax expense (benefit) from continuing operations | $ | (9,423) |  |  | $ | (5,479) |  |  | $ | (4,396) |
The Company’s income tax benefit from discontinued operations was $10 million, $12 million, and $13 million for the years ended December 31, 2020, 2019, and 2018, respectively (see Note 5). The following table reconciles income tax expense (benefit) from continuing operations at statutory rates to actual income tax expense (benefit) recorded (in thousands):
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
Tax expense (benefit) at U.S. federal statutory income tax rate on income or loss subject to tax | $ | 15,016 |  |  | $ | (6,169) |  |  | $ | (7,027) |
State income tax expense (benefit), net of federal tax | 4,211 |  |  | (1,830) |  |  | 1,209 |
Gross receipts and margin taxes | 980 |  |  | 1,108 |  |  | 1,173 |
Foreign rate differential | — |  |  | — |  |  | 301 |
Effect of permanent differences | — |  |  | 20 |  |  | (55) |
Return to provision adjustments | 707 |  |  | 54 |  |  | 258 |
Valuation allowance for deferred tax assets | 24,051 |  |  | 22 |  |  | (255) |
Tax rate differential ─ NOL carryback under the CARES Act | (3,732) |  |  | — |  |  | — |
Change in tax status of TRS | (50,656) |  |  | 1,316 |  |  | — |
Total income tax expense (benefit) from continuing operations | $ | (9,423) |  |  | $ | (5,479) |  |  | $ | (4,396) |
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,
| 2020 |  | 2019 |  | 2018
Gross deferred tax assets: |  |  |  |  |
Investment in unconsolidated joint ventures | $ | 2,333 |  |  | $ | 40,466 |  |  | $ | 31,034 |
Real estate | 3,895 |  |  | — |  |  | — |
Net operating loss carryforward | 68,444 |  |  | 33,771 |  |  | 20,559 |
Expense accruals | 15,478 |  |  | 3,258 |  |  | 2,424 |
Deferred revenue | 103,713 |  |  | — |  |  | — |
Total gross deferred tax assets | 193,863 |  |  | 77,495 |  |  | 54,017 |
Valuation allowance | (33,519) |  |  | (4,878) |  |  | (295) |
Gross deferred tax assets, net of valuation allowance | $ | 160,344 |  |  | $ | 72,617 |  |  | $ | 53,722 |
Gross deferred tax liabilities: |  |  |  |  |
Real estate | $ | 72,059 |  |  | $ | — |  |  | $ | — |
Other | 1,094 |  |  | — |  |  | — |
Gross deferred tax liabilities | $ | 73,153 |  |  | $ | — |  |  | $ | — |
Net deferred tax assets | $ | 87,191 |  |  | $ | 72,617 |  |  | $ | 53,722 |
Net deferred tax assets are included in other assets. 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. In conjunction with the Company establishing a plan during the year ended December 31, 2020 to dispose of all of its SHOP assets and classifying such assets as discontinued operations (see Note 5), the Company concluded it was more likely than not that it would no longer realize the future value of certain deferred tax assets generated by the net operating losses of its TRS entities. Accordingly, the Company recognized a deferred tax asset valuation allowance and corresponding income tax expense of $33 million during the year ended December 31, 2020. At December 31, 2020, the Company had a net operating loss (“NOL”) carryforward of $283 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 $261 million, may be carried forward indefinitely. The following table summarizes the Company’s unrecognized tax benefits (in thousands):
| December 31,
| 2020 |  | 2019 |  | 2018
Total unrecognized tax benefits at January 1 | $ | 469 |  |  | $ | — |  |  | $ | — |
Gross amount of increases for prior years' tax positions | — |  |  | 469 |  |  | — |
Total unrecognized tax benefits at December 31 | $ | 469 |  |  | $ | 469 |  |  | $ | — |
The Company had unrecognized tax benefits of $0.5 million at December 31, 2020 and 2019, that, if recognized, would reduce the annual effective tax rate. As of December 31, 2020, the Company accrued interest of $70 thousand related to the unrecognized tax benefits. 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 2017. For the years ended December 31, 2020, 2019, and 2018 the tax basis of the Company’s net assets was less than the reported amounts by $1.5 billion, $1.2 billion, and $1.4 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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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