Income Taxes

The components of income tax expense for the following periods are as follows (in thousands):



	For the year ended
	December 31,
	2017		2016			2015
Current:
Federal	$	—	$	56		$	129
State	—		69			131
Current tax expense	$	—	$	125		$	260

Deferred:
Federal	350		(380		)	—
State	46		(46		)	—
Deferred tax (expense) benefit	396		(426		)	—
Total tax (expense) benefit	$	396	$	(301	)	$	260

The difference between income tax expense and the amount computed by applying the statutory federal income tax rate to the combined income of the Company's TRS before taxes were as follows (in thousands):



	For the year ended
	December 31,
	2017			2016			2015
Book income (loss) before income taxes of the TRS	$	(4,261	)	$	974		$	2,384

Statutory rate of 34% applied to pre-tax income	$	(1,449	)	$	331		$	810
Effect of state and local income taxes, net of federal tax benefit	(108		)	38			97
Tax reform impact	644			—			—
Provision to return adjustment	5			(406		)	211
Permanent adjustments	13			16			140
Change in valuation allowance	1,289			(299		)	(998		)
Other	2			19			—
Total income tax (benefit) expense	$	396		$	(301	)	$	260

Effective tax rate	(9.29		)%	(30.90		)%	10.91		%

On December 22, 2017, the TCJA was enacted. The TCJA includes a number of changes to the existing U.S. tax code, most notably a reduction of the U.S. corporate income tax rate from 35% to 21% effective for tax years beginning after December 31, 2017. Changes in tax rates and tax laws are accounted for in the period of enactment. Therefore, as a result of the TCJA being signed into law, the net deferred tax assets before valuation allowance were reduced by $0.6 million with a corresponding net adjustment to current year tax expense for the remeasurement of the Company’s U.S. net deferred tax assets. Our federal income tax expense for periods beginning in 2018 will be based on the new rate.

At December 31, 2017, our TRS had a gross deferred tax asset associated with future tax deductions of $30.0 thousand. The tax effect of each type of temporary difference and carry forward that gives rise to the deferred tax asset as of December 31, 2017 and 2016 are as follows (in thousands):



	For the year ended
	December 31,
	2017			2016
Total deferreds:
Allowance for doubtful accounts	$	51		$	59
Accrued compensation	505			627
AMT credit	30			65
Total book to tax difference in partnership	(579		)	(404		)
Net operating loss	1,312			79
Valuation allowance	(1,289		)	—
Net deferred tax asset	$	30		$	426

As of each reporting date, the Company's management considers new evidence, both positive and negative, that could impact management's view with regard to future realization of deferred tax assets. The Company's TRS is expecting increased taxable losses in 2018. As of December 31, 2017, the TRS continues to recognize a full valuation allowance equal to 100% of the gross deferred tax assets, with the exception of the AMT tax credit, due to the uncertainty of the TRS's ability to utilize these deferred tax assets. Management will continue to monitor the need for a valuation allowance.