Note 17 - Income Taxes

9 Months Ended

Sep. 30, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

 17.              Income Taxes

At September 30, 2014, a wholly owned TRS of the Company had approximately $59 million of net operating loss carryforwards which the Company does 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 carryforwards will expire between 2024 through 2028. 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 during 2012 that it had undergone ownership changes within the meaning of Internal Revenue Code Section 382 that the Company believes will substantially eliminate utilization of these net operating loss carryforwards to offset future taxable income. In general, if a company incurs an ownership change under Section 382, the company's ability to utilize a net operating loss, or NOL carryforward to offset its taxable income becomes limited to a certain amount per year. In 2013, the Company, through its wholly owned TRSs, incurred net operating losses in the aggregate amount of approximately $1.3 million. The Company’s carryforward net operating losses will expire by 2033 if they are not offset by future taxable income. Additionally, during 2013, the Company, through one of its wholly owned TRSs, also incurred approximately $3.7 million in capital losses. The Company’s carryforward capital losses will expire by 2018 if they are not offset by future capital gains. The Company has recorded a valuation allowance against certain deferred tax assets at September 30, 2014 as management does not believe that it is more likely than not that these deferred tax assets will 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 2011. The Company has assessed its tax positions for all open years, which includes 2011 to 2013 and concluded that there are no material uncertainties to be recognized.

During the three and nine months ended September 30, 2014, the Company’s TRSs recorded approximately $1.1 million and $4.7 million, respectively, of income tax expense.   During the three and nine months ended September 30, 2013, the Company’s TRSs recorded approximately $0.2 million and $0.5 million, respectively, of income tax expense.   The Company’s estimated taxable income differs from the federal statutory rate as a result of state and local taxes, non-taxable REIT income, a valuation allowance and other differences.

The gross deferred tax asset at September 30, 2014 and December 31, 2013 is $31.5 million and $30.3 million, respectively. The major sources of temporary differences included in the deferred tax assets and their deferred tax effect as of September 30, 2014 and December 31, 2013 are as follows (dollar amounts in thousands):

	September 30, 2014			December 31, 2013
Deferred tax assets
Net operating loss carryforward	$	27,893		$	28,250
Net capital loss carryforward		1,680			1,594
GAAP/Tax basis differences		1,941			489
Total deferred tax assets (1)		31,514			30,333
Valuation allowance		(30,873	)		(30,278	)
Deferred tax liabilities
Deferred tax liabilities		16			55
Total deferred tax liabilities (2)		16			55
Total net deferred tax asset	$	625		$	—

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

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