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Income Taxes
 12 Months Ended
Dec. 31, 2011
Income Taxes  
Income Taxes

Note 11. Income Taxes

Our provision for income taxes consists of the following:

 
   For the year ended December 31,  
 
   2011   2010   2009  

Current:

                    

Federal

   $ —   $ —   $ —  

State

     312     300     312  
               

 

     312     300     312  
               

Deferred:

                    

Federal

     —     —     —  

State

     —     —     —  
               

 

     —     —     —  
               

Income tax provision

   $ 312   $ 300   $ 312  
               

A reconciliation of our effective tax rate and the U.S. federal statutory income tax rate is as follows:

 
   For the year ended December 31,  
 
   2011   2010   2009  

Taxes at statutory U.S. federal income tax rate

     35.0%     35.0%     35.0%  

Nontaxable income of SNH

     (35.0)%     (35.0)%     (35.0)%  

State and local income taxes, net of federal tax benefit

     0.2%     0.3%     0.3%  

Change in valuation allowance

     0.4%     —     —  

Other differences, net

     (0.4)%     —     —  
               

Effective tax rate

     0.2%     0.3%     0.3%  
               

Deferred income tax balances reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities on our balance sheet and the amounts used for income tax purposes and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. Significant components of our deferred tax assets and liabilities are as follows:

 
   For the year ended December 31,  
 
   2011   2010  

Deferred tax assets:

              

Reserves

   $ 489   $ —  

Tax loss carry forwards

     241     —  

Other

     —     —  
           

 

     730     —  

Valuation allowance

     (617 )   —  
           

 

     113     —  
           

Deferred tax liabilities:

              

Depreciable assets

     (113 )   —  
           

 

     —     —  
           

Net deferred tax liabilities

   $ —   $ —  
           

Deferred tax liabilities are included in other liabilities in the accompanying consolidated balance sheet.

Because of our TRSs' short operating history and the uncertainty surrounding our ability to realize the future benefit of these assets, we have provided a 100% valuation allowance as of December 31, 2011. If and when we believe it is more likely than not that we will recover our deferred tax assets, we will reverse the valuation allowance as an income tax benefit in our consolidated statement of operations. As of December 31, 2011, our consolidated TRSs had net operating loss carry forwards for federal income tax purposes of approximately $620, which if unused, begin to expire in 2031.