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Income taxes | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Income taxes | Income taxes The income tax provision from continuing operations shown in the consolidated statements of operations is reconciled to amounts of tax that would have been payable (recoverable) from the application of the federal tax rate to pre-tax profit, as follows:
(Expressed in thousands) |  |  |  |  |  |  |  |  |  |  |
| For the Years Ended December 31,
| 2016 |  | 2015 |  | 2014
| Amount |  | Percentage |  | Amount |  | Percentage |  | Amount |  | Percentage
U.S. federal statutory income tax rate | $ | (7,662 | ) |  | 35.0 | % |  | $ | (851 | ) |  | 35.0 | % |  | $ | 6,017 |  |  | 35.0 | %
U.S. state and local income taxes, net of U.S. federal income tax benefits | (1,075 | ) |  | 4.9 | % |  | (69 | ) |  | 2.8 | % |  | 1,432 |  |  | 8.3 | %
Unrecognized tax benefit | (603 | ) |  | 2.8 | % |  | 589 |  |  | -24.3 | % |  | 6 |  |  | — | %
Valuation allowance | 1,208 |  |  | -5.5 | % |  | — |  |  | — | % |  | — |  |  | — | %
Non-taxable income | (1,267 | ) |  | 5.8 | % |  | (696 | ) |  | 28.7 | % |  | (593 | ) |  | -3.4 | %
Non-deductible legal and regulatory expenses | — |  |  | — | % |  | — |  |  | — | % |  | 5,296 |  |  | 30.8 | %
Provision to return adjustments | (4,167 | ) |  | 19.0 | % |  | 442 |  |  | -18.2 | % |  | (3 | ) |  | — | %
Change in tax rates | 264 |  |  | -1.2 | % |  | 305 |  |  | -12.5 | % |  | 53 |  |  | 0.3 | %
Foreign tax rate differentials | 143 |  |  | -0.7 | % |  | 145 |  |  | -6.0 | % |  | (447 | ) |  | -2.6 | %
Other non-deductible expenses | 897 |  |  | -4.1 | % |  | 541 |  |  | -22.2 | % |  | 373 |  |  | 2.2 | %
Total income tax provision | $ | (12,262 | ) |  | 56.0 | % |  | $ | 406 |  |  | -16.7 | % |  | $ | 12,134 |  |  | 70.6 | %
Income taxes from continuing operations included in the consolidated statements of operations represent the following:
(Expressed in thousands) |  |  |  |  |
| For the Years Ended December 31,
| 2016 |  | 2015 |  | 2014
Current: |  |  |  |  |
U.S. federal tax (benefit) | $ | (15,433 | ) |  | $ | (5,751 | ) |  | $ | 9,294 |
State and local tax | (4,631 | ) |  | (74 | ) |  | 817 |
Non-U.S. operations | 46 |  |  | 181 |  |  | (264 | )
Total Current | (20,018 | ) |  | (5,644 | ) |  | 9,847 |
Deferred: |  |  |  |  |
U.S. federal tax | 5,856 |  |  | 4,198 |  |  | (529 | )
State and local tax | 617 |  |  | 1,632 |  |  | 1,529 |
Non-U.S. operations | 1,283 |  |  | 220 |  |  | 1,287 |
Total Deferred | 7,756 |  |  | 6,050 |  |  | 2,287 |
Total | $ | (12,262 | ) |  | $ | 406 |  |  | $ | 12,134 |
Income (loss) before income taxes from continuing operations with respect to Non-U.S. operations was $(965,000), $732,000 and $4.3 million for the years ended December 31, 2016, 2015 and 2014, respectively. The effective income tax rate from continuing operations for the year ended December 31, 2016 was 56.0% (benefit) compared with 16.7% for the year ended December 31, 2015. The effective income tax rate for the year ended December 31, 2016 was positively impacted by income tax provision to tax return true-ups and higher nontaxable benefits received with respect to Company-owned life insurance partially offset by the valuation allowance established on deferred tax assets related to net operating losses of a foreign subsidiary. The effective income tax rate for the year ended December 31, 2015 was negatively impacted by increases in provisions related to positions taken on state income tax returns as well as income tax provision to tax return true-ups that were recorded during the year. U.S. income and foreign withholding taxes have not been recognized on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that is indefinitely reinvested outside the United States. This amount becomes taxable upon a repatriation of assets from the subsidiary or a sale or liquidation of the subsidiary. The amount of such taxable temporary differences totaled $20.3 million as of December 31, 2016. The unrecognized deferred tax liability associated with earnings of foreign subsidiaries, net of associated U.S. foreign tax credits, is $2.3 million for those subsidiaries with respect to which the Company would be subject to residual U.S. tax on cumulative earnings through 2016 were those earnings to be repatriated. Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that will be in effect when such differences are expected to reverse. Significant components of the Company's deferred tax assets and liabilities from continuing operations as of December 31, 2016 and 2015 were as follows:
(Expressed in thousands) |  |  |
| As of December 31,
| 2016 |  | 2015
Deferred tax assets: |  |  |
Deferred compensation | $ | 26,271 |  |  | $ | 27,423 |
Deferred rent and lease incentives | 15,354 |  |  | 16,437 |
Receivable reserves | 3,554 |  |  | 4,478 |
Accrued expenses | 1,992 |  |  | 3,350 |
Auction rate securities reserves | 1,194 |  |  | 2,666 |
Net operating losses and credits | 4,917 |  |  | 4,164 |
Involuntary conversion | 2,381 |  |  | 2,245 |
Depreciation | 1,446 |  |  | — |
Other | 1,953 |  |  | 2,718 |
Total deferred tax assets | 59,062 |  |  | 63,481 |
Valuation allowance | 1,280 |  |  | 126 |
Deferred tax assets after valuation allowance | 57,782 |  |  | 63,355 |
Deferred tax liabilities: |  |  |
Goodwill | 57,117 |  |  | 53,364 |
Partnership investments | 6,042 |  |  | 7,444 |
Company-owned life insurance | 7,478 |  |  | 6,431 |
Change in accounting method | — |  |  | 1,313 |
Depreciation | — |  |  | 672 |
Other | 282 |  |  | 248 |
Total deferred tax liabilities | 70,919 |  |  | 69,472 |
Deferred tax liabilities, net | $ | (13,137 | ) |  | $ | (6,117 | )
The Company has deferred tax assets at December 31, 2016 of $1.1 million, $1.2 million and $397,000 arising from net operating losses incurred by Oppenheimer Israel (OPCO) Ltd., Oppenheimer Investments Asia Limited, and Oppenheimer Europe Ltd., respectively. The Company believes that realization of the deferred tax assets is more likely than not based on expectations of future taxable income in Israel and Europe. These net operating losses carry forward indefinitely and are not subject to expiration, provided that these subsidiaries and their underlying businesses continue operating normally (as is anticipated). During the year ended December 31, 2016, the Company recorded a valuation allowance of $1.2 million against the deferred tax asset to the net operating losses incurred by Oppenheimer Investments Asia Limited. Goodwill arising from the acquisitions of Josephthal Group Inc. and the Oppenheimer Divisions is being amortized for tax purposes on a straight-line basis over 15 years. The difference between book and tax is recorded as a deferred tax liability. The Company or one or more of its subsidiaries file income tax returns in the U.S. federal jurisdiction and in various states and foreign jurisdictions. The Company has closed tax years through 2010 in the U.S. federal jurisdiction. The Company is under examination in various states in which the Company has significant business operations. The Company has closed tax years through 2007 for New York State and has a settlement agreement with the state for the period 2008 to 2010. The Company also has closed tax years through 2008 with New York City and is currently under exam for the 2009 to 2012 tax years. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations for years before 2010. The Company is currently under examination for the 2013 federal tax return. The Company has unrecognized tax benefits of $1.1 million, $2.5 million and $1.6 million as of December 31, 2016, 2015 and 2014, respectively from continuing operations (as shown on the table below). Included in the balance of unrecognized tax benefits as of December 31, 2016 and 2015 are $710,000 and $1.8 million of tax benefits for either year that, if recognized, would affect the effective tax rate. During the year ended December 31, 2016, the Company reversed $652,000 of unrecognized tax benefit when the related statute of limitation expired. The Company reversed $848,000 of unrecognized tax benefit when the Company entered into a non cash settlement agreement with New York State which resulted in a reduction of deferred tax assets. The Company does not believe any unrecognized tax benefit will significantly increase or decrease within twelve months. A reconciliation of the beginning and ending amount of unrecognized tax benefit follows:
(Expressed in thousands) |  |  |  |  |
| 2016 |  | 2015 |  | 2014
Balance at beginning of year | $ | 2,490 |  |  | $ | 1,583 |  |  | $ | 1,574 |
Additions for tax positions of prior years | 98 |  |  | 907 |  |  | — |
Additions for tax positions of current year | — |  |  | — |  |  | 9 |
Lapse in statute of limitations | (652 | ) |  | — |  |  | — |
Settlements with taxing authorities | (848 | ) |  | — |  |  | — |
Balance at end of year | $ | 1,088 |  |  | $ | 2,490 |  |  | $ | 1,583 |
In its consolidated statements of operations, the Company records interest and penalties accruing on unrecognized tax benefits in income (loss) before income taxes as interest expense and other expense, respectively. For the year ended December 31, 2016, the Company reversed income tax interest payable of $104,000 accrued on unrecognized tax benefits that were reversed during the year. For the year ended December 31, 2015, the Company recorded tax-related interest expense of $23,000, in its consolidated statement of operations. As of December 31, 2016 and 2015, the Company had an income tax-related interest payable of $1,000 and $106,000, respectively, on its consolidated balance sheets.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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