Income Taxes

A reconciliation of the provision for income taxes with the amount computed by applying the statutory federal income tax rate to income before provision for income taxes for the periods presented is as follows (in thousands, except percentages):



	Nine Months Ended September 30,
	2014					2013
Income from continuing operations before income taxes, net of amounts attributable to noncontrolling interests	$	184,191				$	77,859
Pre-tax income attributable to pass-through subsidiaries	(177,077		)			(88,155		)
Pre-tax income (loss) attributable to taxable subsidiaries	7,114					(10,296		)
Federal provision at statutory tax rate (35%)	2,490			35.0	%	(3,604		)	35.0	%
State and local taxes, net of federal benefit	775			10.9	%	(1,122		)	10.9	%
Recognition of deferred revenue as a result of the CPA^®:16 Merger ^(a)	4,848			68.1	%	—			—	%
Amortization of intangible assets	—			—	%	23			(0.2	)%
Interest	1,739			24.4	%	—			—	%
Other	904			12.7	%	(209		)	2.0	%
Tax provision — taxable subsidiaries	10,756			151.1	%	(4,912		)	47.7	%
Deferred foreign tax benefit ^(b)	(6,767		)			(145		)
Current foreign taxes	5,553					7,889
Other state and local taxes	1,633					218
Total provision (benefit)	$	11,175				$	3,050

__________


(a)	Represents income tax expense from a permanent difference upon recognition of deferred revenue associated with accelerated vesting of shares previously issued by CPA^®:16 – Global for asset management and performance fees.


(b)	Represents deferred tax benefit associated with basis differences on certain foreign properties acquired.

In connection with an acquisition of an investment in Norway, we recorded a deferred tax liability of $14.6 million, which is included in Deferred income taxes in the consolidated financial statements, during the nine months ended September 30, 2014 (Note 5). Dollar amounts are based on the exchange rate of the Norwegian krone on the date of acquisition.

At September 30, 2014, we had unrecognized tax benefits of $1.6 million that, if recognized, would have a favorable impact on our effective income tax rate in future periods. We recognize interest and penalties related to uncertain tax positions in income tax expense.

Tax authorities in the relevant jurisdictions may select our tax returns for audit and propose adjustments before the expiration of the statute of limitations. Our tax returns filed for tax years 2008 through 2014 remain open to adjustment in the major tax jurisdictions. On October 22, 2014, the U.S. Internal Revenue Service, or IRS, issued a Notice of Proposed Adjustment for the return filed by our subsidiary, Carey Asset Management, for the 2011 tax year. We are reviewing the proposed adjustment and currently expect to file a protest, which may take the matter to an IRS appeals conference.