INCOME TAXES

Income tax benefit from continuing operations was $2.1 million, zero, and zero in 2016, 2015 and 2014, respectively. This amount was comprised of $1.8 million of U.S. federal taxes and $0.2 million of U.S. state taxes. Income from discontinued operations included equivalent amounts of income tax expense, leading to no overall income tax expense for all periods presented.

We have federal, state and foreign net operating loss carryforwards of approximately $594.9 million, $364.5 million and $14.5 million, respectively, as of December 31, 2016. Federal net operating loss carryforwards expire beginning in 2024 and state net operating loss carryforwards expire beginning in 2017, if not utilized. We have federal and state research and development tax credit carryforwards of $6.2 million and $4.1 million, respectively, as of December 31, 2016. The federal research and development tax credit carryforwards will expire starting in 2028 if not utilized. The state research and development tax credit carryforwards can be carried forward indefinitely.

Utilization of the net operating loss and research and development credit carryforwards may be subject to an annual limitation due to the ownership percentage change limitations provided by Section 382 of the Internal Revenue Code and similar state provisions. The annual limitation may result in the expiration of the net operating losses and research and development credit carryforwards before utilization.

The components of loss before income taxes from continuing operations were as follows for 2016, 2015 and 2014 (in thousands):



	Years Ending December 31,
	2016			2015			2014
United States	$	(105,533	)	$	(135,359	)	$	(158,390	)
Foreign	(1,386		)	(3,023		)	(2,771		)
Loss before income taxes from continuing operations	$	(106,919	)	$	(138,382	)	$	(161,161	)

Reconciling items from income tax computed at the statutory federal rate for the years ended December 31, 2016, 2015 and 2014, were as follows:



	Years Ending December 31,
	2016		2015		2014
Federal income tax statutory rate	34.0	%	34.0	%	34.0	%
State income taxes, net of federal benefits	4.5		2.2		1.6
Revalued derivative liability	—		—		0.6
Incentive stock option compensation	(0.4	)	(0.4	)	(1.3	)
Research tax credits	1.4		0.4		0.8
Other	(0.1	)	—		—
Valuation allowance	(37.5	)	(36.2	)	(35.7	)
Effective income tax rate from continuing operations	1.9	%	—	%	—	%

The tax effects of temporary differences and carry forwards that give rise to significant portions of the deferred tax assets are as follows (in thousands):



	December 31,
	2016			2015
Net operating loss carry forwards	$	228,637		$	187,169
Capitalized start-up costs	7,093			7,475
Research and development credits	8,922			6,320
Stock compensation	10,256			12,683
Other	4,313			6,875
Total deferred tax assets	259,221			220,522
Valuation allowance	(255,765		)	(216,220		)
Deferred tax liability—fixed assets	(3,456		)	(3,056		)
Deferred tax liability—derivative liability	—			(1,246		)
Net deferred tax assets, after valuation allowance	$	—		$	—

We track the portion of our deferred tax assets attributable to excess stock option benefits in accordance with FASB ASC 718-740-45, Other Presentation Matters, and therefore, these amounts are not included in our deferred tax assets. The deferred tax assets attributable to excess stock option benefits total $6.8 million at December 31, 2016, and the benefit related thereto will only be recognized when it reduces cash taxes payable.

Our deferred tax assets represent an unrecognized future tax benefit. We have provided a full valuation allowance on our deferred tax assets as of December 31, 2016 and 2015, as management believes it is more likely than not that the related deferred tax asset will not be realized. The net valuation allowance increased by $39.5 million during 2016.

Uncertain Tax Positions

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):



Balance as of December 31, 2013	$	1,488
Addition based on tax positions related to current year	6,411
Additions based on tax positions related to prior year	4,042
Balance as of December 31, 2014	11,941
Addition based on tax positions related to current year	184
Reduction based on tax positions related to prior year	(9,799		)
Additions based on tax positions related to prior year	86
Balance as of December 31, 2015	2,412
Addition based on tax positions related to current year	595
Additions based on tax positions related to prior year	431
Balance as of December 31, 2016	$	3,438

Our policy is to include interest and penalties related to unrecognized tax benefits within the provision for income taxes. Management has determined that no accrual for interest and penalties was required as of December 31, 2016. We do not anticipate the total amounts of unrecognized tax benefits will significantly increase or decrease in the next twelve months.

We are subject to taxation in the U.S., various states and a foreign jurisdiction. As of December 31, 2016, our tax years 2004 and thereafter remain subject to examination by the tax authorities.