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Income Taxes
 12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
We have elected to be treated as a REIT under the provisions of the Internal Revenue Code, which requires that we distribute at least 90% of our taxable income annually to our stockholders and comply with certain other requirements. In addition to paying federal and state taxes on any retained income, we may be subject to taxes on “built in gains” on sales of certain assets. Our taxable REIT subsidiaries are subject to federal, state, local and/or foreign income taxes.

Our provision (benefit) for income taxes consists of the following (in thousands):
Year Ended December 31,
202020192018
Current - Federal$— $420 $66 
 State79 541 984 
 Foreign7 49 460 
86 1,010 1,510 
Deferred - Federal(13,766)80 1,857 
 State(4,866)132 (122)
 Foreign(32,819)20,806 (444)
Change in valuation allowance24,913 — 300 
(26,538)21,018 1,591 
Income tax (benefit) provision$(26,452)$22,028 $3,101 

A reconciliation of the statutory federal tax provision to our income tax provision is as follows (in thousands):
Year Ended December 31,
202020192018
Statutory federal tax (benefit) provision (1)$(88,733)$43,313 $19,089 
Tax impact of REIT election37,394 (14,125)(14,439)
State income tax (benefit) provision, net of federal tax benefit(3,782)532 405 
Foreign income tax expense (benefit)3,618 (6,998)(2,927)
Change in valuation allowance24,913 — 300 
Other138 (694)673 
Income tax (benefit) provision$(26,452)$22,028 $3,101 
_____________________________
(1)Beginning January 1, 2018, the U.S. federal income tax rate decreased from 35% to 21%.

Frenchman's Reef is owned by a subsidiary that has elected to be treated as a TRS, and is subject to U.S. Virgin Islands (“USVI”) income taxes. We are party to a tax agreement with the USVI that reduces the income tax rate to approximately 4.4%. In December 2019, we were granted a modification to the tax agreement that reduces the income tax rate to approximately 2.3% beginning January 1, 2020. This agreement expires in February 2030.

Deferred income taxes are recognized for temporary differences between the financial reporting bases of assets and liabilities and their respective tax bases and for operating loss and tax credit carryforwards based on enacted tax rates expected to be in effect when such amounts are paid. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realizable based on consideration of available evidence, including future reversals of existing taxable temporary differences, projected future taxable income and tax planning strategies. Deferred tax assets are included in prepaid and other assets and deferred tax liabilities are included in accounts payable and accrued expenses on the accompanying consolidated balance sheets. The total deferred tax assets and liabilities are as follows (in thousands):
20202019
Federal
Net operating loss carryforwards$13,960 $— 
Deferred income2,799 2,382 
Other24 529 
Depreciation and amortization(7,028)(7,928)
Less: Valuation allowance(9,166)— 
Federal - Deferred tax assets (liabilities), net$589 $(5,017)
State
Net operating loss carryforwards$5,639 $2,572 
Deferred income712 735 
Alternative minimum tax credit carryforwards80 80 
Other7 167 
Depreciation and amortization(1,787)(2,446)
Less: Valuation allowance(4,313)(700)
State - Deferred tax assets, net$338 $408 
Foreign (USVI)
Depreciation and amortization$12,134 $(21,060)
Land basis recorded in purchase accounting(2,617)(2,617)
Less: Valuation allowance(12,134)— 
Foreign - Deferred tax liabilities, net$(2,617)$(23,677)

As of December 31, 2020, we had deferred tax assets of $19.6 million consisting of federal and state net operating loss carryforwards. The state loss carryforwards generally expire in 2022 through 2040 if not utilized by then. Certain of the federal loss carryforwards expire in 2034; the remaining federal loss carryforwards do not expire.

We analyze our deferred tax assets for each jurisdiction and record a valuation allowance when we deem it more likely than not that future results will not generate sufficient taxable income to realize the deferred tax assets. As of December 31, 2020, we have a valuation allowance of $25.6 million on our deferred tax assets as we can no longer be assured that we will be able to realize most of these assets due to uncertainties regarding how long the COVID-19 pandemic will last or what the long-term impact will be on our hotels' operations.