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Income Taxes | 9 Months Ended
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Sep. 30, 2018
Income Taxes [Abstract] |
Income Taxes | 11. Income Taxes ﻿ On December 22, 2017, the Tax Cuts and Jobs Act (which we refer to as the “TCJA”) was signed into law. The TCJA significantly reforms the Internal Revenue Code of 1986, as amended. The TCJA, among other things, contains significant changes to corporate taxation, including reduction of the corporate tax rate, commencing in 2018, from a top marginal rate of 35% to a flat rate of 21%, limitation of the tax deduction for interest expense to 30% of adjusted earnings (except for certain small businesses), limitation of the deduction for net operating losses to 80% of current year taxable income, elimination of net operating loss carrybacks, immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits including the deduction for domestic production activities. Also on December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (SAB 118) which addresses the application of ASC Topic 740 to the TCJA. SAB 118 outlines that if the accounting for the effects of the TCJA is incomplete, but a reasonable estimate can be made, then provisional amount should be reflected in the financial statements. Our accounting for the impacts of the TCJA related to current and deferred taxes, and in particular our deferred taxes related to our acquisition of UCP and Sundquist Homes was incomplete when we issued our consolidated financial statements for the year ended December 31, 2017. During the three and nine months ended September 30, 2018, we continued to refine our accounting for the TCJA, including refining certain calculations associated with UCP’s distributive share of its investment in UCP, LLC at the acquisition date of August 4, 2017 in accordance with I.R.C. §704(c). These refinements resulted in measurement period adjustments increasing our income tax provision for the three months ended September 30, 2018 by $0.5 million and benefiting our income tax provision for the nine months ended September 30, 2018 by $1.2 million. At the end of each interim period we are required to estimate our annual effective tax rate for the fiscal year, and to use that rate to provide for income taxes for the current year-to-date reporting period. Our 2018 estimated annual effective tax rate of 26.6% is driven by our blended federal and state statutory rate of 24.9%, and certain other permanent differences between GAAP and tax which increased our rate by 1.7%. For the three months ended September 30, 2018, our estimated annual rate of 26.6% was impacted by discrete items which had a net impact of benefiting our rate by 1.2%, including federal energy credits for homes delivered in 2017. For the nine months ended September 30, 2018 our estimated annual rate of 26.6% was impacted by discrete items which had a net impact of decreasing our rate by 2.6%. The discrete items recognized during the nine months ended September 30, 2018 included federal energy credits for homes delivered in 2017 which benefited our rate by 1.7%, excess tax benefits for vested stock-based compensation which benefited our rate by 1.7%, and measurement period adjustments under SAB 118 described above, which benefited our rate by 1.3%. These items were partially offset by a discrete item for deferred taxes related to our step acquisition of WJH, and certain return to provision items, which increased our rate by 2.1%. ﻿ For the three and nine months ended September 30, 2018, we recorded income tax expense of $5.8 million and $2 2.2 million, 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://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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