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Income Taxes | 3 Months Ended
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Mar. 31, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | 10. INCOME TAXES Ambac files a consolidated Federal income tax return with its subsidiaries. Ambac and its subsidiaries also file separate or combined income tax returns in various states, local and foreign jurisdictions. The following are the major jurisdictions in which Ambac and its subsidiaries operate and the earliest tax years subject to examination:
Jurisdiction | Tax Year
United States | 2010
New York State | 2012
New York City | 2012
United Kingdom | 2012
Italy | 2010
As of March 31, 2016 Ambac had loss carryforwards totaling $4,325,337. This includes carryforwards of $85,232 relating to U.S. capital losses, $0 of Ambac UK loss carryforwards, and an ordinary U.S. federal net operating tax carryforward of approximately $4,240,105, which, if not utilized, will begin expiring in 2029, and will fully expire in 2036. The tax effects of temporary differences that give rise to significant portions of the deferred tax liabilities and deferred tax assets at March 31, 2016 and December 31, 2015 are presented below:
| March 31, 2016 |  | December 31, 2015
Deferred tax liabilities: |  |  |
Insurance intangible | $ | 402,488 |  |  | $ | 424,239 |
Variable interest entities | 57,408 |  |  | 10,053 |
Investments | 158,576 |  |  | 66,278 |
Unearned premiums and credit fees | 99,187 |  |  | 98,945 |
Unremitted foreign earnings | 4,291 |  |  | — |
Other | 33,621 |  |  | 34,025 |
Total deferred tax liabilities | 755,571 |  |  | 633,540 |
Deferred tax assets: |  |  |
Net operating loss and capital carryforward | 1,513,867 |  |  | 1,504,569 |
Loss reserves | 132,705 |  |  | 122,635 |
Compensation | 3,091 |  |  | 2,839 |
AMT Credits | 27,252 |  |  | 27,252 |
Other | 9,913 |  |  | 9,913 |
Subtotal deferred tax assets | 1,686,828 |  |  | 1,667,208 |
Valuation allowance | 933,016 |  |  | 1,035,873 |
Total deferred tax assets | 753,812 |  |  | 631,335 |
Net deferred tax (liability) | $ | (1,759 | ) |  | $ | (2,205 | )
In accordance with the Income Tax Topic of the ASC, a valuation allowance is recognized if, based on the weight of available evidence, it is more-likely-than-not that some, or all, of the deferred tax asset will not be realized. As a result of the risks and uncertainties associated with future operating results, management believes it is more likely than not that the Company will not generate sufficient taxable income to recover the deferred tax operating asset and therefore has a full valuation allowance. NOL Usage Pursuant to an intercompany tax sharing agreement, to the extent Ambac Assurance generates taxable income after September 30, 2011, which is offset with NOLs (or the proportionate amount of AMT NOL), it is obligated to make payments (“Tolling Payments”), subject to certain credits, to Ambac in accordance with an NOL usage table, where the “Applicable Percentage” is applied to the aggregate amount of federal income tax liability that would have been paid if the “Allocated NOLs” were not available. To the extent Ambac Assurance utilizes Allocated NOLs generated prior to September 30, 2011 greater than $3,650,000 it is obligated to pay Ambac 25% of the federal income tax liability that would have been paid if the NOLs were not available. Ambac Assurance has utilized all of its current post determination date NOLs generated from September 30, 2011 through December 31, 2015 (post determination date NOLs). During this time period, Ambac Assurance's cumulative net taxable income was $877,313, which utilized all of the $479,000 allocated Tier A NOL and $398,313 of the $1,057,000 allocated Tier B NOL and resulting in a Tolling Payments net of applicable credits of $70,911 that was paid to Ambac on April 29, 2016. Of the bankruptcy related credits available to offset the first $5,000 of payments due under each of the NOL usage Tiers A, B, and C, Ambac Assurance has fully utilized the combined $10,000 of Tier A and Tier B credits. As of December 31, 2015 and March 31, 2016, the remaining balance of the $3,650,000 NOL allocated to Ambac Assurance is $2,772,677. For the three months ended March 31, 2016, Ambac Assurance generated a new post determination date NOL of $83,530 which will offset future taxable income before any additional tolling payments will accrue, and increased Ambac Assurance's total NOL as of March 31, 2016 to $2,856,207. AFG's NOL as of March 31, 2016 is $1,383,898.

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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=6907707&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=6907707&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=6907707&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=6907707&loc=d3e32537-109319 + Details
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