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Federal Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Federal Income Taxes | . Federal Inc om e 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, 2021, 2020 and 2019, 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. No more than 20% of the value of our total assets may consist of the securities of one or more TRS. In the normal course of business, the Company or one or more of its subsidiaries is subject to examination by Federal, state and local jurisdictions, in which it operates, where applicable. The Company expects to recognize interest and penalties related to uncertain tax positions, if any, as income tax expense. For the three years ended December 31, 2021, the Company recognized no material adjustments regarding its tax accounting treatment for uncertain tax provisions. As of December 31, 2021, the tax years that remain subject to examination by the major tax jurisdictions under applicable statutes of limitations are generally the year 2018 and forward. Reconciliation of Net Income to Taxable Income Reconciliation of GAAP net income attributable to Acadia to taxable income (loss) is as follows:
|  | Year Ended December 31, |
(in thousands) |  | 2021 |  |  | 2020 |  |  | 2019 |
|  |  |  |  | (As Restated) |  |  | (As Restated) |
Net income (loss) attributable to Acadia |  | $ | 23,548 |  |  | $ | (8,976 | ) |  | $ | 53,717 |
Deferred rental and other income (loss) (a) |  |  | 3,209 |  |  |  | (2,498 | ) |  |  | 1,203 |
Book/tax difference - depreciation and amortization (a) |  |  | 24,756 |  |  |  | 27,052 |  |  |  | 21,688 |
Straight-line rent and above- and below-market rent adjustments (a) |  |  | (8,588 | ) |  |  | 8,630 |  |  |  | (10,949 | )
Book/tax differences - equity-based compensation |  |  | 7,663 |  |  |  | 6,825 |  |  |  | 7,177 |
Joint venture equity in earnings, net (a) |  |  | 3,962 |  |  |  | (163 | ) |  |  | 15,571 |
Impairment charges and reserves |  |  | 2,657 |  |  |  | 18,734 |  |  |  | — |
Acquisition costs (a) |  |  | 22 |  |  |  | 14 |  |  |  | 63 |
Gain on disposition of properties |  |  | (2,170 | ) |  |  | 4,936 |  |  |  | 2,375 |
Book/tax differences - miscellaneous |  |  | (1,203 | ) |  |  | (36 | ) |  |  | (2,145 | )
Taxable income |  | $ | 53,856 |  |  | $ | 54,518 |  |  | $ | 88,700 |
Distributions declared (b) |  | $ | 52,872 |  |  | $ | 24,937 |  |  | $ | 96,310 |
a) Adjustments from certain subsidiaries and affiliates, which are consolidated for financial reporting but not for tax reporting, are included in the reconciliation item “Joint venture equity in earnings, net.” b) The entire fourth quarter 2021 dividend of $14.4 million (paid in January 2022) was attributed to 2021. Any additional distributions required for REIT qualification may be made through October 15, 2022. The entire fourth quarter 2019 dividend of $25.2 million (paid in January 2020) was attributed to 2020. Characterization of Distributions The Company has determined that the cash distributed to the shareholders for the periods presented is characterized as follows for Federal income tax purposes:
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
|  | Per Share |  |  | % |  |  | Per Share |  |  | % |  |  | Per Share |  |  | % |
Ordinary income - Non-Section 199A |  | $ | — |  |  |  | — | % |  | $ | — |  |  |  | — | % |  | $ | — |  |  |  | — | %
Ordinary income - Section 199A |  |  | 0.550 |  |  |  | 92 | % |  |  | 0.520 |  |  |  | 90 | % |  |  | 0.820 |  |  |  | 77 | %
Qualified dividend |  |  | 0.010 |  |  |  | 1 | % |  |  | — |  |  |  | — | % |  |  | — |  |  |  | — | %
Capital gain |  |  | 0.040 |  |  |  | 7 | % |  |  | 0.060 |  |  |  | 10 | % |  |  | 0.240 |  |  |  | 23 | %
Total (a) |  | $ | 0.600 |  |  |  | 100 | % |  | $ | 0.580 |  |  |  | 100 | % |  | $ | 1.060 |  |  |  | 100 | %
a) The fourth quarter 2021 regular dividend was $0.15 per common share, all of which is allocable to 2021. The fourth quarter 2019 regular dividend was $0.29 per common share, all of which is allocable to 2020. 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 (loss) and provision for income taxes associated with the TRS for the periods presented are summarized as follows (in thousands):
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
|  |  |  |  | (As Restated) |  |  | (As Restated) |
TRS loss before income taxes |  | $ | (4,240 | ) |  | $ | (3,856 | ) |  | $ | (3,117 | )
(Provision) benefit for income taxes: |  |  |  |  |  |  |  |  |
Federal |  |  | — |  |  |  | 376 |  |  |  | 754 |
State and local |  |  | — |  |  |  | (268 | ) |  |  | 317 |
TRS net loss before noncontrolling interests |  |  | (4,240 | ) |  |  | (3,748 | ) |  |  | (2,046 | )
Noncontrolling interests |  |  | 9 |  |  |  | 746 |  |  |  | (369 | )
TRS net loss |  | $ | (4,231 | ) |  | $ | (3,002 | ) |  | $ | (2,415 | )
The income tax provision for the Company differs from the amount computed by applying the statutory Federal income tax rate to income (loss) before income taxes as follows. Amounts are not adjusted for temporary book/tax differences (in thousands):
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
|  |  |  |  | (As Restated) |  |  | (As Restated) |
Federal tax benefit at statutory tax rate |  | $ | (890 | ) |  | $ | (810 | ) |  | $ | (655 | )
TRS state and local taxes, net of Federal benefit |  |  | (268 | ) |  |  | (244 | ) |  |  | (197 | )
Tax effect of: |  |  |  |  |  |  |  |  |
Permanent differences, net |  |  | 252 |  |  |  | 227 |  |  |  | 239 |
Adjustment to deferred tax reserve |  |  | 1,061 |  |  |  | 851 |  |  |  | 1,748 |
Other |  |  | (156 | ) |  |  | (132 | ) |  |  | (111 | )
REIT state and local income and franchise taxes |  |  | 94 |  |  |  | 377 |  |  |  | 441 |
Total provision for income taxes |  | $ | 93 |  |  | $ | 269 |  |  | $ | 1,465 |
As of December 31, 2021, and 2020, the Company’s deferred tax assets we re $0.0 and $0.0 million net of applicable reserves o f $3.7 million an d $2.6 million, respectively and were comprised of capital loss carryovers of $0.1 and $0.1 million and net operating loss carryovers of $3.6 million and $2.5 million, respectively. Under GAAP a reduction of the carrying amounts of deferred tax assets by a valuation allowance is required, if, based on the evidence available, it is more likely than not (a likelihood of more than 50 percent) that some portion or all of the deferred tax assets will not be realized. The valuation allowance should be sufficient to reduce the deferred tax asset to the amount that is more likely than not to be realized. During 2020, the Company determined that the realization of its deferred tax assets was not likely and as such, the Company recorded a valuation allowance against its deferred tax assets o f $0.9 million.

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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=121826272&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=122134291&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=121826272&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=122134291&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=121826272&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 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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