	Year Ended December 31,
	2018			2017			2016
	(In thousands)
Current:
Federal	$	31,617		$	36,045		$	45,455
State and local		5,928			3,848			7,087
Foreign		8,862			7,234			6,166
Total current provision		46,407			47,127			58,708
Deferred:
Federal		(1,416	)		6,171			5,884
State and local		(272	)		661			1,141
Foreign		515			(280	)		(303	)
Total deferred provision		(1,173	)		6,552			6,722
Provision for income taxes	$	45,234		$	53,679		$	65,430

Pre-tax income from U.S. operations was $168.5 million, $165.2 million and $161.9 million for the years ended December 31, 2018, 2017 and 2016, respectively. Pre-tax income from foreign operations was $49.6 million, $36.6 million and $29.7 million for the years ended December 31, 2018, 2017 and 2016, respectively.

On December 22, 2017, the Tax Act was enacted into law. The Tax Act significantly revised the U.S. corporate income tax regime by, among other things, lowering the U.S. federal corporate income tax rate from 35% to 21%, implementing a territorial tax system and imposing a repatriation tax on deemed earnings of foreign subsidiaries. The Company recorded a provisional tax charge in 2017 of $11.7 million, composed of $6.7 million to re-measure U.S. deferred tax assets and $5.0 million for the repatriation tax on accumulated undistributed foreign earnings. In 2018, the Company reduced the provisional tax charge by $0.4 million as a result of new regulatory guidance and changes in interpretations and assumptions made by the Company.

Pursuant to the Tax Act, all previously undistributed foreign earnings have now been subject to U.S. tax. Notwithstanding the U.S. taxation of these amounts, the Company considers its undistributed foreign earnings to be indefinitely reinvested outside of the U.S. and does not expect to incur any significant additional taxes related to such amounts.

The difference between the Company’s reported provision for income taxes and the U.S. federal statutory rate of 21% is as follows:

	Year Ended December 31,
	2018				2017				2016

U.S. federal tax at statutory rate		21.0		%		35.0		%		35.0		%
State and local taxes - net of federal benefit		2.0				1.5				2.9
Credits and deductions related to research activities		(0.3	)			(1.2	)			(1.3	)
Foreign rate differential benefit		(0.5	)			(2.9	)			(2.3	)
Excess tax benefit from stock-based compensation		(2.1	)			(11.6	)			—
Tax Cuts and Jobs Act provisional tax charge		(0.2	)			5.8				—
Other, net		0.8				—				(0.2	)
Provision for income taxes		20.7		%		26.6		%		34.1		%

	As of December 31,
	2018			2017
	(In thousands)
Deferred tax assets:
U.S. net operating loss carryforwards	$	603		$	872
Capital loss carryforwards		—			4,648
Stock compensation expense		4,967			4,534
Other		2,966			1,143
Total deferred tax assets		8,536			11,197
Valuation allowance		—			(4,648	)
Net deferred tax assets		8,536			6,549
Deferred tax liabilities:
Depreciation and amortization		(1,847	)		(1,369	)
Capitalized software development costs		(3,776	)		(3,479	)
Intangible assets		(898	)		(967	)
Deferred tax assets, net	$	2,015		$	734

In 2001 and 2000, MarketAxess Holdings Inc. and MarketAxess Corporation had an ownership change within the meaning of Section 382 of the Internal Revenue Code. As of December 31, 2018, the Company had restricted U.S. federal net operating loss carryforwards of approximately $2.9 million related to the prior ownership change, which begin to expire in 2021. The Company’s net operating loss carryforwards may be subject to additional annual limitations if there is a 50% or greater change in the Company’s ownership, as determined over a rolling three-year period.

The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. If it is not more likely than not that some portion or all of the gross deferred income tax assets will be realized in future years, a valuation allowance is recorded. In October 2013, the Company recognized a $20.6 million capital loss on the sale of Greenline Financial Technologies, Inc. of which $1.2 million was carried back or otherwise utilized against current period capital gains. A full valuation allowance was provided against the remaining capital loss carryforward. The remaining capital loss carryforward expired as of December 31, 2018.

	Year Ended December 31,
	2018			2017			2016
	(In thousands)
Valuation allowance at beginning of year	$	4,648		$	7,235		$	7,294
(Decrease) to valuation allowance attributable to:
Expiration of capital loss carryforwards		(4,648	)		—			—
Federal and state tax rate changes		—			(2,587	)		(59	)
Valuation allowance at end of year	$	—		$	4,648		$	7,235

The Company or one of its subsidiaries files U.S. federal, state and foreign income tax returns. Income tax returns for U.S. Federal (through 2013), New York City (through 2003) and State (through 2009) and Connecticut State (through 2003) have been audited. An examination of the Company’s New York State income tax returns for 2010 through 2015 is currently underway. The Company cannot estimate when the examination will conclude or the impact such examinations will have on the Company’s Consolidated Financial Statements, if any.

	Year Ended December 31,
	2018		2017			2016
	(In thousands)
Balance at beginning of year	$	2,650	$	29		$	265
Additions attributable to state and local apportionment		2,068		2,650			—
Reductions for tax positions of prior years		—		(29	)		(236	)
Balance at end of year	$	4,718	$	2,650		$	29