Income Taxes

For the years ended December 31, 2015, 2014 and 2013 , the Company qualified to be taxed as a REIT under the Code for U.S. federal income tax purposes. As long as the Company qualifies as a REIT, the Company generally will not be subject to U.S. federal income taxes on its taxable income to the extent it annually distributes at least 90% of its taxable income to stockholders and does not engage in prohibited transactions. Certain activities the Company performs may produce income that will not be qualifying income for REIT purposes. The Company has designated its TRSs to engage in these activities. The tables below reflect the taxes accrued at the TRS level and the tax attributes included in the consolidated financial statements.

The income tax provision for the years ended December 31, 2015, 2014 and 2013 is comprised of the following components (dollar amounts in thousands):



	Years Ended December 31,
	2015		2014			2013
Current income tax expense
Federal	$	3,158	$	4,572		$	381
State	1,283		2,423			358
Total current income tax expense	4,441		6,995			739
Deferred income tax expense (benefit)
Federal	69		(458		)	—
State	25		(142		)	—
Total deferred income tax expense (benefit)	94		(600		)	—

Total provision	$	4,535	$	6,395		$	739

The Company’s estimated taxable income differs from the statutory U.S. federal rate as a result of state and local taxes, non-taxable REIT income, valuation allowance and other differences. A reconciliation of the statutory income tax provision to the effective income tax provision for the years ended December 31, 2015, 2014 and 2013, respectively, are as follows (dollar amounts in thousands).



	December 31,
	2015					2014					2013
Provision at statutory rate	$	28,892		35.0	%	$	49,316		35.0	%	$	24,393		35.0	%
Non-taxable REIT income	(25,733		)	(31.2	)	(44,247		)	(31.4	)	(26,215		)	(37.6	)
State and local tax provision	1,284			1.6		2,420			1.7		348			0.5
Other	24,047			29.1		(1,227		)	(0.9	)	(853		)	(1.2	)
Valuation allowance	(23,955		)	(29.0	)	133			0.1		3,066			4.4
Total provision	$	4,535		5.5	%	$	6,395		4.5	%	$	739		1.1	%

Deferred Tax Assets and Liabilities

The major sources of temporary differences included in the deferred tax assets and their deferred tax effect as of December 31, 2015 and 2014 are as follows (dollar amounts in thousands):



	December 31, 2015			December 31, 2014
Deferred tax assets
Net operating loss carryforward	$	2,083		$	28,704
Net capital loss carryforward	2,029			1,592
Other	3,043			1,755
Total deferred tax assets ⁽¹⁾	$	7,155		$	32,051
Deferred tax liabilities
Deferred tax liabilities	$	192		$	1,040
Total deferred tax liabilities ⁽²⁾	192			1,040
Valuation allowance	(6,457		)	(30,412		)
Total net deferred tax asset	$	506		$	599


(1)	Included in receivables and other assets in the accompanying consolidated balance sheets.


(2)	Included in accrued expenses and other liabilities in the accompanying consolidated balance sheets.

At December 31, 2014, one of the Company’s wholly owned TRS had approximately $56 million of net operating loss carryforwards which the Company did not expect to be able to utilize to offset future taxable income, other than taxable income arising from certain "built in gains" on its CLOs. The Internal Revenue Code places certain limitations on the annual amount of net operating loss carryforwards that can be utilized if certain changes in the Company’s ownership occur. The Company determined that it had undergone ownership changes within the meaning of Internal Revenue Code Section 382 resulting in substantial limitation on use of these net operating loss carryforwards to offset future taxable income therefore, as of December 31, 2014, the Company recorded a full valuation allowance against the deferred tax assets related to the net operating loss carryforwards. In 2015, the Company sold its remaining CLOs and used a portion of its net operating loss carryforwards to offset the "built in gains" from the sale. At December 31, 2015, based on several factors, including Section 382 limitation, the TRS's capability to generate sufficient taxable income and capital gains prior to the expiration of the net operating loss carryforwards, management determined it is appropriate to write-off the deferred tax asset and corresponding valuation allowance related to the net operating loss carryover.

As of December 31, 2015, the Company through a wholly owned TRS, had incurred net operating losses in the aggregate amount of approximately $4.5 million. The Company’s carryforward net operating losses will expire between 2033 and 2034 if they are not offset by future taxable income. Additionally, as of December 31, 2015, the Company, through one of its wholly owned TRSs, had also incurred approximately $4.4 million in capital losses. The Company’s carryforward capital losses will expire between 2018 and 2020 if they are not offset by future capital gains. At December 31, 2015, the Company has recorded a valuation allowance against the deferred tax assets management does not believe it is more likely than not to be realized.

The Company files income tax returns with the U.S. federal government and various state and local jurisdictions. The Company is no longer subject to tax examinations by tax authorities for years prior to 2012. The Company has assessed its tax positions for all open years, which includes 2012 to 2015 and concluded that there are no material uncertainties to be recognized.

In addition, based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements.