INCOME TAXES

For financial reporting purposes, income (loss) before income taxes includes the following components (in thousands):



	Years ended December 31,
	2019			2018			2017
United States loss	$	(134,934	)	$	(219,585	)	$	(48,039	)
Foreign income (loss)	399			(369		)	305
Total loss before income taxes	$	(134,535	)	$	(219,954	)	$	(47,734	)

The provision (benefit) for income taxes for 2019, 2018 and 2017 consists of the following (in thousands):



	Years ended December 31,
	2019			2018			2017
Current:
Federal	$	(49	)	$	(57	)	$	365
State	195			(141		)	280
Foreign	158			44			57
Total current	304			(154		)	702
Deferred:
Federal	(99		)	(1,583		)	56,350
State	(18		)	(645		)	7,146
Foreign	(2		)	(2		)	(10		)
Total deferred	(119		)	(2,230		)	63,486
Total provision (benefit) for income taxes	$	185		$	(2,384	)	$	64,188

The provision (benefit) for income taxes for 2019, 2018 and 2017 differ from the amounts computed by applying the U.S. federal income tax rate of 21% for 2019 and 2018 and 35% for 2017 to loss before income taxes for the following reasons (in thousands):



	Year ended December 31,
	2019			2018			2017
U.S. federal income tax provision (benefit) at statutory rate	$	(28,252	)	$	(46,190	)	$	(16,707	)
State income tax expense, net of federal benefit	(4,952		)	(8,289		)	(2,480		)
Research and development credit	(2,014		)	(1,734		)	(1,696		)
Stock based compensation expense	1,440			(1,260		)	164
Other	1,437			1,652			581
Gain on subsidiary stock	193			2,192			—
Reduction in federal rate	—			—			25,287
Change in valuation allowance	32,333			51,245			59,039
Total provision (benefit) for income taxes	$	185		$	(2,384	)	$	64,188

The components of our deferred tax assets and liabilities as of December 31, 2019 and 2018 are as follows (in thousands):



	December 31,
	2019			2018
Deferred tax assets:
Net operating loss carryforwards	$	104,153		$	79,820
Research and development tax credits	17,922			15,382
Accrued expenses	9,893			7,898
Basis difference in equity securities	7,075			4,857
Operating lease liabilities	6,970			—
Intangible assets	4,130			2,234
Reserves and other	4,018			5,345
Interest expense carryforward	677			—
Fixed assets	608			259
Other tax credits and carryforwards	300			206
Gross deferred tax assets	155,746			116,001
Valuation allowance	(146,856		)	(114,523		)
Total deferred tax assets	8,890			1,478
Deferred tax liabilities:
Operating lease right-of-use assets	(6,263		)	—
Marketable securities	(1,068		)	—
Prepaid expenses	(810		)	(880		)
Goodwill	(677		)	(489		)
Total deferred tax liabilities	(8,818		)	(1,369		)
Total deferred tax assets, net	$	72		$	109

At December 31, 2019, we have federal net operating loss carryforwards with no expiration date of approximately $261.5 million; the utilization of these net operating loss carryforwards is limited to 80% of taxable income in any given year. We also have federal net operating loss carryforwards of approximately $2.4 million which expire in 2020 and $149.9 million which expire between 2026 and 2037. We have state net operating loss carryforwards with no expiration date of approximately $119.7 million; the utilization of these net operating loss carryforwards is limited to 80% of taxable income in those states in any given year. We also have state net operating loss carryforwards of approximately $86.0 million which expire in 2021, $16.2 million which expire in 2022, and $145.8 million that expire between 2023 and 2039. We have foreign net operating loss carryforwards of $1.2 million that expire primarily between 2023 and 2024.

At December 31, 2019, we have federal research credit carryforwards of approximately $19.2 million that expire between 2027 and 2039. We also have state research credit carryforwards of approximately $7.9 million that expire between 2021 and 2033. Ownership changes under Internal Revenue Code Section 382 could limit the amount of net operating losses or credit carryforwards that can be used in the future.

Each quarter we assess the recoverability of our deferred tax assets under ASC Topic 740. We assess the available positive and negative evidence to estimate whether we will generate sufficient future taxable income to use our existing deferred tax assets. We have limited carryback ability and do not have significant taxable temporary differences to recover our existing deferred tax assets, therefore we must rely on future taxable income, including tax planning strategies, to support their realizability. We have established a valuation allowance for our deferred tax assets not supported by carryback ability or taxable temporary differences, primarily due to uncertainty regarding our future taxable income. We have considered, among other things, the cumulative loss incurred over the three-year period ended December 31, 2019, as a significant piece of objective negative evidence. We intend to continue maintaining a valuation allowance on our net deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. The amount of the deferred tax asset considered realizable could be adjusted if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as long-term projections for growth. We will continue to monitor the need for a valuation allowance against our remaining deferred tax assets on a quarterly basis.

A reconciliation of the beginning and ending unrecognized tax benefits, excluding interest and penalties, as of December 31, 2019, 2018 and 2017 is as follows (in thousands):



	Year ended December 31,
	2019		2018			2017
Beginning balance	$	7,974	$	6,964		$	7,333
Additions for tax positions related to the current year	1,064		1,013			881
Additions (reductions) for tax positions taken in prior years	20		332			230
Reduction for tax positions settled by utilizing tax attributes	—		(335		)	(1,480		)
Ending balance	$	9,058	$	7,974		$	6,964

Included in the balance of unrecognized tax benefits as of December 31, 2019, 2018 and 2017, are approximately $9.1 million, $8.0 million, and $7.0 million, respectively, of tax benefits that, if recognized and the valuation allowance against our net deferred tax assets were released, would affect the effective tax rate. We believe it is reasonably possible that these unrecognized tax benefits will continue to increase in the future.

Accrued interest and penalties on unrecognized tax benefits as of December 31, 2019 and 2018 were $567,000 and $499,000, respectively.

We are subject to taxation in the United States and various state and foreign jurisdictions. Tax years beginning in 2015 are subject to examination by taxing authorities, although net operating loss and credit carryforwards from all years are subject to examinations and adjustments for at least three years following the year in which the attributes are used. An audit by the Ireland Revenue Agency for the calendar year 2016 was finalized during 2019 with no assessment.

We have indefinitely reinvested foreign earnings of $2.5 million at December 31, 2019. We would need to accrue and pay various taxes on this amount if repatriated. We do not intend to repatriate these earnings.