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Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The Company is subject to income tax laws of the various jurisdictions in which it operates, including U.S. federal, state and local and non-U.S. jurisdictions, primarily in Europe. The Company's current primary sources of income subject to tax are income from its investment management business, operations of its hotel and healthcare portfolios as well as real estate and loan investments in Europe. On December 22, 2017, the Tax Cuts and Jobs Act was enacted, which provides for a reduction in the U.S. federal corporate income tax rate from 35% to 21% effective January 1, 2018. At December 31, 2017, the Company recognized a provisional amount of $24.9 million relating to the effects of the tax rate change on our existing deferred tax balances, which is included as a component of income tax benefit. The Company remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21% for U.S. federal corporate income tax purposes. During the fourth quarter of 2018, the Company completed its analysis of the Tax Cuts and Jobs Act, which resulted in the recognition of an additional $2.2 million of income tax benefit relating to the effects of the tax rate change on the Company's existing deferred tax balances. Income Tax Benefit (Expense)
|  | Year ended December 31,
(In thousands) |  | 2018 |  | 2017 |  | 2016
Current |  |  |  |  |  |
Federal |  | $ | 2,881 |  |  | $ | (20,316 | ) |  | $ | (2,720 | )
State and local |  | 1,168 |  |  | (3,606 | ) |  | (1,436 | )
Foreign |  | (13,698 | ) |  | (16,138 | ) |  | (8,244 | )
Total current tax benefit (expense) |  | (9,649 | ) |  | (40,060 | ) |  | (12,400 | )
Deferred |  |  |  |  |  |
Federal |  | 64,962 |  |  | 110,711 |  |  | 6,214 |
State and local |  | 1,320 |  |  | 18,235 |  |  | (713 | )
Foreign |  | 3,148 |  |  | 9,513 |  |  | 2,117 |
Total deferred tax benefit |  | 69,430 |  |  | 138,459 |  |  | 7,618 |
Total income tax benefit (expense) |  | $ | 59,781 |  |  | $ | 98,399 |  |  | $ | (4,782 | )
Deferred Income Tax Assets and Liabilities Deferred tax asset is included in other assets while deferred tax liability is included in accrued and other liabilities. Through the Merger, the Company assumed approximately $218.2 million of deferred tax liabilities as well as deferred tax assets which were fully reserved with a valuation allowance of $31.9 million. Valuation allowances are established against net operating losses and capital losses when it is more likely than not that these carry forward losses will not be utilized. As of December 31, 2018, the Company believes that it is more likely than not that the carry forward net operating losses on certain hotel portfolios will be utilized prior to their expiration based on the Company’s reassessment of expected future profitability on these portfolios, therefore the related valuation allowance that was previously established of $10.7 million was released in 2018. The components of deferred tax assets and deferred tax liabilities arising from temporary differences were as follows.
(In thousands) |  | December 31, 2018 |  | December 31, 2017
Deferred tax assets |  |  |  |
Net operating and capital loss carry forwards (1) |  | $ | 56,609 |  |  | $ | 30,019 |
Equity-based compensation |  | 17,162 |  |  | 28,071 |
Basis difference—investment in partnerships |  | 7,745 |  |  | — |
Foreign tax credits (2) |  | 892 |  |  | 1,682 |
Straight-line and prepaid rent expense |  | 7,850 |  |  | 3,601 |
Deferred income |  | — |  |  | 1,932 |
Deferred interest expense |  | 472 |  |  | 1,924 |
Other |  | 2,904 |  |  | 7,947 |
Gross deferred tax assets |  | 93,634 |  |  | 75,176 |
Valuation allowance (3) |  | (22,062 | ) |  | (23,852 | )
Deferred tax assets, net of valuation allowance |  | 71,572 |  |  | 51,324 |
Deferred tax liabilities |  |  |  |
Management contract intangibles |  | 33,693 |  |  | 90,605 |
Basis difference—investment in partnerships |  | — |  |  | 5,822 |
Basis difference—real estate |  | 63,901 |  |  | 68,687 |
Deferred income |  | 1,263 |  |  | — |
Other |  | 108 |  |  | 1,643 |
Gross deferred tax liabilities |  | 98,965 |  |  | 166,757 |
Net deferred tax liability |  | $ | (27,393 | ) |  | $ | (115,433 | )
__________
(1) | At December 31, 2018 and 2017, deferred tax asset was recognized on net operating losses of $251.2 million and $121.3 million, respectively. Net operating losses attributable to U.S. federal and state, where applicable, generally begin to expire in 2030, or can be carried forward indefinitely. Net operating losses attributable to foreign operations can generally be carried forward indefinitely.
(2) | Foreign tax credits expire beginning 2026.
(3) | The ending balance of the valuation allowance at December 31, 2017 reflects a $12.3 million reduction resulting from the impact of the Tax Cuts and Jobs Act.
Effective Income Tax The Company's income tax benefit varied from the amount computed by applying the statutory income tax rate to income from continuing operations before income taxes. Income tax expense associated with income from discontinued operations was immaterial. A reconciliation of the statutory U.S. income tax to the Company's effective income tax is presented as follows:
|  | Year Ended December 31,
(Amounts in thousands) |  | 2018 |  | 2017 |  | 2016
Income (loss) from continuing and discontinued operations before income taxes |  | $ | (554,956 | ) |  | $ | (163,012 | ) |  | $ | 295,508 |
Pre-tax income attributable to pass-through subsidiaries |  | 312,939 |  |  | (89,104 | ) |  | (306,644 | )
Pre-tax loss attributable to taxable subsidiaries |  | (242,017 | ) |  | (252,116 | ) |  | (11,136 | )
Federal tax benefit at statutory tax rate (21%, 35% and 35%, respectively) |  | 50,824 |  |  | 88,241 |  |  | 3,365 |
State and local income taxes, net of federal income tax benefit |  | 10,983 |  |  | 9,380 |  |  | 88 |
Foreign income tax differential |  | (3,533 | ) |  | 6 |  |  | (5,441 | )
Nondeductible expenses |  | (4,648 | ) |  | (20,372 | ) |  | (1,128 | )
Excess inclusion income tax expense |  | — |  |  | — |  |  | (1,311 | )
Valuation allowance, net |  | 2,874 |  |  | (3,555 | ) |  | (692 | )
Impact of Tax Cuts and Jobs Act |  | 2,190 |  |  | 24,908 |  |  | — |
Other |  | 1,091 |  |  | (209 | ) |  | 337 |
Income tax benefit (expense) |  | $ | 59,781 |  |  | $ | 98,399 |  |  | $ | (4,782 | )
Tax Examinations The Company is no longer subject to U.S. federal, state and local or foreign income tax examinations by tax authorities for years prior to 2015.

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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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