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Federal Income Taxes | 12 Months Ended
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Dec. 31, 2017
Federal Income Taxes [Abstract] |
Federal Income Taxes | 7. Federal Income Taxes ﻿ The federal income tax expense (benefit) on continuing operations (in millions) was as follows: ﻿ ﻿
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |
﻿ | For the Years Ended December 31, |
﻿ | 2017 |  | 2016 |  | 2015 |
﻿Current | $ | 210 |  | $ | 88 |  | $ | 212 |
﻿Deferred |  | (1,159 | ) |  | 178 |  |  | 64 |
﻿Federal income tax expense (benefit) | $ | (949 | ) | $ | 266 |  | $ | 276 |
﻿ A reconciliation of the effective tax rate differences (in millions) was as follows: ﻿ ﻿
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |
﻿ | For the Years Ended December 31, |
﻿ | 2017 |  | 2016 |  | 2015 |
﻿Tax rate times pre-tax income | $ | 396 |  | $ | 510 |  | $ | 501 |
﻿Effect of: |  |  |  |  |  |  |  |  |
﻿Tax-preferred investment income |  | (280 | ) |  | (196 | ) |  | (197 | )
﻿Tax credits |  | (29 | ) |  | (28 | ) |  | (26 | )
﻿Change in uncertain tax positions |  | (17 | ) |  | (14 | ) |  | (2 | )
﻿Excess tax benefits from share-based |  |  |  |  |  |  |  |  |
﻿compensation |  | (12 | ) |  | (8 | ) |  | - |
﻿Goodwill impairment |  | 316 |  |  | - |  |  | - |
﻿Deferred tax impact from the Tax Cuts |  |  |  |  |  |  |  |  |
﻿ and Jobs Act |  | (1,322 | ) |  | - |  |  | - |
﻿Other items |  | (1 | ) |  | 2 |  |  | - |
﻿Federal income tax expense (benefit) | $ | (949 | ) | $ | 266 |  | $ | 276 |
﻿Effective tax rate |  | -84% |  |  | 18% |  |  | 19% |
﻿ The effective tax rate is the ratio of tax expense (benefit) over pre-tax income (loss). The tax-preferred investment income relates primarily to the separate account dividends-received deduction. The tax benefit associated with the separate account dividends-received deduction was $264 million, $182 million and $192 million for the years ended December 31, 2017, 2016 and 2015. Tax benefi ts for uncertain tax positions for the year ended December 31, 2017, were primarily attributable to the release of reserves for tax contingencies associated with a prior ta x year that closed during 2017. ﻿ As a result of the enactment of the Tax Act on December 22, 2017, we remeasured our existing deferred tax balances at the new 21% marginal corporate income tax rate and recognized $1.3 billion in tax benefit in 2017. We continue to review and analyze the provisions of the Tax Act, including the actual and potential impact of the reduction in the U.S. federal corporate income tax rate and the impact of specific life insurance provisions on our financial statements. The impact of the Tax Act may differ from existing amounts due to, among other things, changes in interpretations and assumptions we have made and guidance that may be issued by regulatory authorities. The Securities and Exchange Commission has issued rules that allow for a one year measurement period after the enactment of the Tax Act to finalize calculations and recording of the related tax impacts. While we do not anticipate any significant changes to the amounts recorded as of December 31, 2017, any adjustments to amounts recorded as a result of the Tax Act will be made during 2018. ﻿ The federal income tax asset (liability) (in millions) was as follows: ﻿ ﻿
﻿ |  |  |  |  |  |
﻿ |  |  |  |  |  |
﻿ | As of December 31, |
﻿ | 2017 |  | 2016 |
﻿Current | $ | (35 | ) | $ | 4 |
﻿Deferred |  | (2,095 | ) |  | (2,463 | )
﻿Total federal income tax asset (liability) | $ | (2,130 | ) | $ | (2,459 | )
﻿ Significant components of our deferred tax assets and liabilities (in millions) were as follows: ﻿ ﻿
﻿ |  |  |  |  |  |
﻿ |  |  |  |  |  |
﻿ | As of December 31, |
﻿ | 2017 |  | 2016 |
﻿Deferred Tax Assets |  |  |  |  |  |
﻿Future contract benefits and other contract holder funds | $ | 795 |  | $ | 1,286 |
﻿Deferred gain on business sold through reinsurance |  | - |  |  | 8 |
﻿Reinsurance related embedded derivative asset |  | 12 |  |  | 19 |
﻿Compensation and benefit plans |  | 182 |  |  | 309 |
﻿Tax credits |  | 76 |  |  | 85 |
﻿Other |  | 7 |  |  | 133 |
﻿Total deferred tax assets | $ | 1,072 |  | $ | 1,840 |
﻿Deferred Tax Liabilities |  |  |  |  |  |
﻿DAC | $ | 1,080 |  | $ | 1,986 |
﻿VOBA |  | 108 |  |  | 312 |
﻿Net unrealized gain on AFS securities |  | 1,643 |  |  | 1,646 |
﻿Net unrealized gain on trading securities |  | 41 |  |  | 68 |
﻿Intangibles |  | 9 |  |  | 20 |
﻿Investment activity |  | 96 |  |  | 108 |
﻿Other |  | 190 |  |  | 163 |
﻿Total deferred tax liabilities | $ | 3,167 |  | $ | 4,303 |
﻿Net deferred tax asset (liability) | $ | (2,095 | ) | $ | (2,463 | )
﻿ As of December 31, 2017, we had $73 m illion of alternative minimum tax credits that are not subject to expiration, and $3 million of research and development credits that expire in 2036. Although realization is not assured, management believes that it is more likely than not that we will realize the benefits of our deferred tax assets, and, accordingly, no valuation allowance has been recorded. ﻿ As of December 31, 2017 and 2016, $11 million and $1 million, respectively, of our unrecognized tax benefits presented below, if recognized, would have affected our income tax expense and our effective tax rate. We are not aware of any events for which it is likely that unrecognized tax benefits will significantly increase or decrease within the next year. A reconciliation of the unrecognized tax benefits (in millions) was as follows: ﻿ ﻿
﻿ |  |  |  |  |  |
﻿ |  |  |  |  |  |
﻿ | For the Years Ended |
﻿ | December 31, |
﻿ | 2017 |  | 2016 |
﻿Balance as of beginning-of-year | $ | 1 |  | $ | 13 |
﻿Increases for prior year tax positions |  | 9 |  |  | - |
﻿Increases for current year tax positions |  | 1 |  |  | 1 |
﻿Decreases for settlements with taxing authorities |  | - |  |  | (1 | )
﻿Decreases for expiring statutes |  | - |  |  | (12 | )
﻿Balance as of end-of-year | $ | 11 |  | $ | 1 |
﻿ We recognize interest and penalties accrued, if any, related to unrecognized tax benefits as a component of tax expense. For the years ended December 31, 2017, 2016 and 2015, we recognized interest and penalty expense (benefit) related to uncertain tax positions of zero, $(3) million and zero, respectively. We had accrued interest and penalty expense related to the unrecognized tax benefits of zero as of December 31, 2017 and 2016. ﻿ We are subject to examination by U.S. federal, state, local and non-U.S. income auth orities. We are currently not under examination by the Internal Revenue Service; however, tax years 2014 and forward remain open. We are currently under examination by several state and local taxing jurisdictions; however, we do not expect these examinations will materially impact us. ﻿

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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 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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