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Income Taxes
9 Months Ended
Sep. 30, 2018
Income Tax Disclosure [Abstract]  
Income Taxes

10. Income Taxes

The Company did not record a provision for U.S. federal income taxes for the three and nine months ended September 30, 2018 because it expects to generate a loss for the year ended December 31, 2018. The net income tax benefit of $5,000 and $0.4 million for the three and nine months ended September 30, 2018 primarily represented income tax benefit resulting from foreign research and development tax credits. Income tax expense of $37,000 and $0.1 million for the three and nine months ended September 30, 2017 represented foreign taxes. The Company’s net U.S. deferred tax assets continue to be offset by a full valuation allowance.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (Tax Act). The Tax Act significantly revises U.S. tax law by, among other provisions, lowering the U.S. federal statutory income tax rate from 35% to 21%, changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017 and eliminating or reducing certain income tax deductions.

The effects of changes in tax laws are required to be recognized in the period in which the legislation is enacted. However, due to the complexity and significance of the Tax Act’s provisions, the FASB issued ASU No. 2018-06,Income Taxes (Topic 740) pursuant to the SEC staff issued Staff Accounting Bulletin No. 118 (SAB 118), which allows companies to record the tax effects of the Tax Act on a provisional basis based on a reasonable estimate, and then, if necessary, subsequently adjust such amounts during a limited measurement period as more information becomes available. The measurement period ends when a company has obtained, prepared, and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year from enactment.

In connection with the Company’s initial analysis of the Tax Act, it recorded a decrease of its net deferred tax assets of $7.2 million for the period ended December 31, 2017, to account for the rate reduction. This did not have an impact on the Company’s condensed consolidated financial statements since its U.S. deferred tax assets are fully offset by a valuation allowance. The Company finalized the analysis during the three months ended September 30, 2018, with no material changes to the initial estimated decrease of its net deferred tax assets, and the accounting is now complete.