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FEDERAL INCOME TAXES
 12 Months Ended
Dec. 31, 2015
Income Tax Disclosure [Abstract]  
Federal Income Taxes
Federal Income Taxes

The Company has elected to qualify as a REIT in accordance with Sections 856 through 860 of the Code, and intends at all times to qualify as a REIT under the Code. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it currently distribute at least 90% of its annual REIT taxable income to its shareholders. As a REIT, the Company generally will not be subject to corporate Federal income tax, provided that distributions to its shareholders equal at least the amount of its REIT taxable income as defined under the Code. As the Company distributed sufficient taxable income for the years ended December 31, 2015, 2014 and 2013, no U.S. Federal income or excise taxes were incurred. If the Company fails to qualify as a REIT in any taxable year, it will be subject to Federal income taxes at the regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for the four subsequent taxable years. Even though the Company qualifies for taxation as a REIT, the Company is subject to certain state and local taxes on its income and property and Federal income and excise taxes on any undistributed taxable income. In addition, taxable income from non-REIT activities managed through the Company’s TRS's is subject to Federal, state and local income taxes. For taxable years beginning after 2017, no more than 20% of the value of our total assets may consist of the securities of one or more taxable REIT subsidiaries.

ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

19. Federal Income Taxes, continued

Characterization of Distributions:

The Company has determined that the cash distributed to the shareholders is characterized as follows for Federal income tax purposes:
 
 
For the years ended December 31,
 
 
2015
 
2014
 
2013
Ordinary income
 
68
%
 
69
%
 
87
%
Qualified dividend
 
—
%
 
—
%
 
—
%
Capital gain
 
32
%
 
31
%
 
13
%
 
 
100
%
 
100
%
 
100
%


Taxable REIT Subsidiaries

Income taxes have been provided for using the liability method as required by ASC Topic 740, "Income Taxes." The Company’s TRS income and provision for income taxes associated with the TRS for the years ended December 31, 2015, 2014 and 2013 are summarized as follows:
(dollars in thousands)
 
2015
 
2014
 
2013
TRS income (loss) before income taxes
 
$
1,008

 
$
(36
)
 
$
(2,225
)
(Provision) benefit for income taxes:
 


 


 


Federal
 
(526
)
 
(377
)
 
276

State and local
 
(134
)
 
(97
)
 
71

TRS net income (loss) before noncontrolling interests
 
348

 
(510
)
 
(1,878
)
Noncontrolling interests
 
(208
)
 
(508
)
 
267

TRS net income (loss)
 
$
140

 
$
(1,018
)
 
$
(1,611
)


The income tax provision for the Company differs from the amount computed by applying the statutory Federal income tax rate to income before income taxes as follows (not adjusted for temporary book/tax differences):

(dollars in thousands)
 
2015
 
2014
 
2013
Federal tax provision (benefit) at statutory tax rate
 
$
343

 
$
(12
)
 
$
(757
)
TRS state and local taxes, net of Federal benefit
 
53

 
(2
)
 
(117
)
Tax effect of:
 
 
 
 
 
 
Permanent differences, net
 
396

 
446

 
496

Prior year underaccrual, net
 
938

 
1

 
128

Restricted stock vesting
 
(5
)
 
(20
)
 
(2
)
Other
 
(126
)
 
61

 
127

REIT state and local income and franchise taxes
 
188

 
155

 
144

Total provision for income taxes
 
$
1,787

 
$
629

 
$
19