INCOME TAXES

The Company intends to continue to operate so as to qualify, for United States federal income tax purposes, as a partnership, and not as an association or publicly traded partnership taxable as a corporation. As such, the Company generally is not subject to United States federal income tax at the entity level, but is subject to limited state and foreign taxes.

The Company owns both REIT and domestic taxable corporate subsidiaries. The Company’s REIT subsidiaries are not expected to incur federal tax expense, but are subject to limited state income tax expense related to the 2015 tax year. The domestic taxable corporate subsidiaries taxed as regular corporations under the Code are expected to incur federal and state tax expense related to the 2015 tax year. The income tax expense (benefit) consisted of the following components (amounts in thousands):



	Successor Company					Predecessor Company
	Year ended December 31, 2015		Eight months ended December 31, 2014			Four months ended April 30, 2014			Year ended December 31, 2013
Current:
Federal income tax	$	48	$	(63	)	$	(4,304	)	$	2,988
State income tax	134		126			137			480
Total	182		63			(4,167		)	3,468
Deferred:
Federal income tax	843		343			4,329			(3,001		)
State income tax	165		78			—			—
Total	1,008		421			4,329			(3,001		)
Total income tax expense (benefit)	$	1,190	$	484		$	162		$	467

The tax provision for domestic taxable corporate subsidiaries taxed as regular corporations was based on a combined federal and state income tax rate of 39.16% at December 31, 2015, 39.81%, at December 31, 2014 and 41.50% at December 31, 2013. The tax rate is equivalent to the combined federal statutory income tax rate and the state statutory income tax rate, net of federal benefit.

The following table presents a reconciliation of income before taxes at the statutory rate to the effective tax expense (benefit) (amounts in thousands):



	Successor Company						Predecessor Company
	Year ended December 31, 2015			Eight months ended December 31, 2014			Four months ended April 30, 2014			Year ended December 31, 2013
Income before taxes at statutory rate	$	(116,720	)	$	(76,561	)	$	37,150		$	102,794
Income passed through to shareholders	128,242			83,098			(34,377		)	(93,260		)
REIT income not subject to tax	(10,574		)	(6,072		)	(2,773		)	(9,141		)
State and local income taxes, net of federal benefit	194			82			88			(464		)
Withholding taxes	48			21			25			172
Other	—			(84		)	49			366
Effective tax expense (benefit)	$	1,190		$	484		$	162		$	467

Deferred tax assets are recognized if, in management’s judgment, their realizability is determined to be more likely than not. If a deferred tax asset is determined to be unrealizable, a valuation allowance is established. The significant components of deferred tax assets and liabilities are reflected in the following table as of December 31, 2015 and 2014 (amounts in thousands):



	As of December 31, 2015			As of December 31, 2014
Deferred tax assets:
Unrealized losses from investments in domestic corporate subsidiaries	$	—		$	—
Total deferred tax assets	—			—
Deferred tax liabilities:
Unrealized gains from investments in domestic corporate subsidiaries	1,008			421
Total deferred tax liabilities	1,008			421
Net deferred tax assets (liabilities)	$	(1,008	)	$	(421	)