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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Major 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	2013
New York City	2014
United Kingdom	2015
Italy	2014

Significant Portions of Deferred Tax Liabilities and Deferred Tax Assets

The tax effects of temporary differences that give rise to significant portions of the deferred tax liabilities and deferred tax assets at December 31, 2018 and 2017 are presented below:

December 31,	2018				2017
Deferred tax liabilities:
Insurance intangible	$	150,975			$	177,864
Debentures	—				28,387
Variable interest entities	19,051				22,817
Investments	26,145				28,798
Unearned premiums and credit fees	48,121				51,485
Other	7,649				9,402
Total deferred tax liabilities	251,941				318,753
Deferred tax assets:
Net operating loss and capital carryforward	718,978				775,917
Loss reserves	227,401				264,624
Debentures	22,564				—
Compensation	9,500				5,585
Other	1,818				2,140
Subtotal deferred tax assets	980,261				1,048,266
Valuation allowance	768,450				763,172
Total deferred tax assets	211,811				285,094
Net deferred tax liability	$	40,130			$	33,659

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]

U.S. and foreign components of pre-tax income (loss) were as follows:

Year Ended December 31,	2018				2017				2016
U.S.	$	264,089			$	(450,978	)		$	77,161
Foreign	8,444				166,727				27,865
Total	$	272,533			$	(284,251	)		$	105,026

Schedule of Components of Income Tax Expense (Benefit)

he components of the provision (benefit) for income taxes were as follows:

Year Ended December 31,	2018				2017				2016
Current taxes
U. S. federal	$	(1,902	)		$	(29,581	)		$	3,934
U.S. state and local	2,480				2,013				707
Foreign	(835		)		40,613				26,088
Total current taxes	(257		)		13,045				30,729
Deferred taxes
Foreign	5,391				31,419				(20		)
Total deferred taxes	$	5,391			$	31,419			$	(20	)
Provision for income taxes	$	5,134			$	44,464			$	30,709

Schedule Of Income Taxes Charged Credited Directly To Equity

The total effect of income taxes on net income and stockholders’ equity for the years ended December 31, 2018, 2017 and 2016 is as follows:

Year Ended December 31,	2018				2017				2016
Total income taxes charged to net income	$	5,134			$	44,464			$	30,709
Income taxes charged (credited) to stockholders’ equity:
Unrealized gains (losses) on investment securities	11,832				(30,838		)		41,602
Unrealized gains (losses) on foreign currency translations	—				25,776				(58,527		)
Change in retirement benefits	(371		)		446				3,278
Credit Risk Changes to Fair Value Options	161				—				—
Valuation allowance to equity	(9,095		)		4,616				13,647
Total charged to stockholders’ equity:	2,527				—				—
Total effect of income taxes	$	7,661			$	44,464			$	30,709

Schedule of Effective Income Tax Rate Reconciliation

The tax provisions in the accompanying Consolidated Statements of Total Comprehensive Loss reflect effective tax rates differing from prevailing Federal corporate income tax rates. The following is a reconciliation of these differences:

	2018							2017							2016
Year Ended December 31,	Amount				%			Amount				%			Amount				%
Tax on income from continuing operations at statutory rate	$	57,232			21.0	%		$	(99,488	)		35.0	%		$	36,759			35.0	%
Changes in expected tax resulting from:
Tax-exempt interest	(6,850		)		(2.5	)%		(6,004		)		2.1	%		(1,561		)		(1.5	)%
Foreign taxes	10,494				3.9	%		(17,742		)		6.2	%		26,183				24.9	%
Substantiation adjustment	(60,077		)		(22.0	)%		36,124				(12.7	)%		(171,687		)		(163.5	)%
Valuation allowance	5,278				1.9	%		127,675				(44.9	)%		139,584				132.9	%
Change in Tax Law	(1,902		)		(0.7	)%		1,886				(0.7	)%		—				—	%
Other, net	959				0.4	%		2,013				(0.7	)%		1,431				1.4	%
Tax expense on income from continuing operations	$	5,134			1.9	%		$	44,464			(15.7	)%		$	30,709			29.2	%

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the beginning and ending amount of unrecognized tax benefits for 2018, 2017 and 2016 is as follows:

Year Ended December 31,	2018				2017				2016
Balance, beginning of period	$	—			$	—			$	—
Increases related to prior year tax positions	—				—				—
Decreases related to prior year tax positions	—				—				—
Balance, end of period	$	—			$	—			$	—

Schedule of Net Operating Loss And Tax Credit Carryovers

Pursuant to the intercompany tax sharing agreement, to the extent Ambac Assurance generates taxable income after September 30, 2011, which is offset with "Allocated NOLs" of $3,650,000, it is obligated to make payments (“Tolling Payments”), subject to certain credits, to Ambac in accordance with the following 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. Pursuant to the Closing Agreement between Ambac and the Internal Revenue Service ("IRS"), the IRS will receive 12.5% of Tier C and 17.5% of Tier D payments, if made.

NOL Usage Table

NOL Usage Tier	Allocated NOLs			Applicable Percentage
A	The first	$479,000		15%
B	The next	$1,057,000	after Tier A	40%
C	The next	$1,057,000	after Tier B	10%
D	The next	$1,057,000	after Tier C	15%

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