9.	Income Taxes

Income tax expense associated with state and international operations recognized during the periods presented were as follows:


	Quarter Ended September 30,				Nine months Ended September 30,
	2014		2013		2014		2013
Income tax expense:
Continuing operations:
State tax expense	$	12,208	$	12,432	$	38,596	$	37,590

Discontinued operations:
International tax (benefit) expense		20,781		9,747		371,943		16,685

	$	32,989	$	22,179	$	410,539	$	54,275

The effective tax rate for the international properties was 4.6% and 226.1% for the quarter and nine months ended September 30, 2014 and 18.6%, for the quarter and nine months ended September 30, 2013. The variance in effective tax rate is significantly due to the change in valuation allowance.

Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities, which are included in Assets and Liabilities Held for Sale in the accompanying condensed balance sheets, were as follows as of:


	September 30, 2014			December 31, 2013
Deferred tax assets relating to:
Fixed assets	$	336,334		$	350,824
Net operating loss carryforwards		102,656			51,161

Total deferred tax assets		438,990			401,985
Valuation allowance		(417,552	)		(39,509	)

Net deferred tax assets		21,438			362,476
Deferred tax liabilities relating to:
Accruals		21,438			23,261

Total deferred tax liabilities		21,438			23,261

Total deferred tax assets, net	$	—		$	339,215

As of September 30, 2014, the Company recorded a full valuation allowance against all net deferred tax assets. As of December 31, 2013, the Company had recorded deferred tax assets of approximately $0.3 million, of which approximately $0.05 million related to net operating losses generated in Luxembourg. The Company recorded a full valuation allowance against the net deferred tax asset in Luxembourg as it was deemed more likely than not that future taxable income would be insufficient to realize future tax benefits. The net operating losses in Luxembourg can be carried forward indefinitely.

In connection with the Company’s determination to sell its German portfolio, it recorded a full valuation allowance of $0.4 million against the net deferred tax assets attributable to the Luxembourg operations and the German properties as it was deemed more likely than not that Company would not be able to realize future tax benefits for these amounts.

The tax years 2010 through 2013 remain subject to examination by taxing authorities throughout the United States. The Company analyzed its material tax positions and determined that it has not taken any uncertain tax positions.