Note 11. Income Taxes

Our provision for income taxes consists of the following:

	For the year ended December 31,

	2013		2012		2011
Current:
Federal	$	—	$	—	$	—
State		600		375		312


		600		375		312


Deferred:
Federal		—		—		—
State		—		—		—


		—		—		—


Income tax provision	$	600	$	375	$	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,

	2013			2012			2011
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		0.4	%		0.3	%		0.2	%
Change in valuation allowance		3.5	%		2.4	%		0.4	%
Other differences, net		(3.5	)%		(2.4	)%		(0.4	)%


Effective tax rate		0.4	%		0.3	%		0.2	%

Deferred income tax balances reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities on our consolidated balance sheets 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,

	2013			2012
Deferred tax assets:
Deferred revenue	$	2,987		$	2,169
Tax loss carryforwards		7,373			1,751


		10,360			3,920
Valuation allowance		(10,203	)		(3,814	)


		157			106


Deferred tax liabilities:
Depreciable assets		(157	)		(106	)


		—			—


Net deferred income taxes	$	—		$	—

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

Because of our TRSs' short operating history and history of losses, we are not able to conclude that it is more likely than not we will realize the future benefit of our deferred tax assets; thus we have provided a 100% valuation allowance as of December 31, 2013 and 2012. 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, 2013, our consolidated TRSs had net operating loss carry forwards for federal income tax purposes of approximately $18,648, which, if unused, begin to expire in 2031.