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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Code. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it currently distribute at least 90% of its REIT taxable income (determined without regard to the deduction for dividends paid and excluding net capital gains) to its shareholders. It is the Company's current intention to adhere to these requirements and maintain the Company's qualification for taxation as a REIT. As a REIT, the Company generally is not subject to federal corporate income tax on that portion of its taxable income that is currently distributed to shareholders. However, as a REIT, the Company is still subject to certain state and local taxes on its income and property, and to federal income and excise taxes on its undistributed taxable income. In addition, taxable income of TRSs, including our TRS lessees, are subject to federal, state and local income taxes.
For federal income tax purposes, the cash distributions paid to the Company’s common shareholders and preferred shareholders may be characterized as ordinary income, return of capital (generally non-taxable) or capital gains. Tax law permits certain characterization of distributions which could result in differences between cash basis and tax basis distribution amounts.
The following characterizes distributions paid per common share and preferred share on a tax basis for the years ended December 31, 2021, 2020 and 2019:
202120202019
Amount%Amount%Amount%
Common Shares:
Ordinary non-qualified income$— — %$— — %$0.5609 30.03 %
Qualified dividend— — %— — %0.0069 0.37 %
Capital gain0.0128 32.00 %0.0100 33.33 %1.3000 69.60 %
Return of capital0.0272 68.00 %0.0200 66.67 %— — %
Total$0.0400 100.00 %$0.0300 100.00 %$1.8678 100.00 %
Series C Preferred Shares:
Ordinary non-qualified income$— — %$— — %$0.6100 30.03 %
Qualified dividend— — %— — %0.0075 0.37 %
Capital gain0.1725 12.45 %0.4063 33.34 %1.4138 69.60 %
Return of capital1.2133 87.55 %0.8125 66.66 %— — %
Total$1.3858 100.00 %$1.2188 100.00 %$2.0313 100.00 %
Series D Preferred Shares:
Ordinary non-qualified income$— — %$— — %$0.5982 30.03 %
Qualified dividend— — %— — %0.0074 0.37 %
Capital gain0.1692 12.49 %0.3984 33.33 %1.3866 69.60 %
Return of capital1.1855 87.51 %0.7969 66.67 %— — %
Total$1.3547 100.00 %$1.1953 100.00 %$1.9922 100.00 %
Series E Preferred Shares: (1)
Ordinary non-qualified income$— — %$— — %$0.5982 30.03 %
Qualified dividend— — %— — %0.0074 0.37 %
Capital gain0.5118 32.11 %0.3984 33.33 %1.3866 69.60 %
Return of capital1.0819 67.89 %0.7969 66.67 %— — %
Total$1.5937 100.00 %$1.1953 100.00 %$1.9922 100.00 %
Series F Preferred Shares: (1)
Ordinary non-qualified income$— — %$— — %$0.5912 30.03 %
Qualified dividend— — %— — %0.0073 0.37 %
Capital gain0.5058 32.11 %0.3938 33.34 %1.3703 69.60 %
Return of capital1.0692 67.89 %0.7875 66.66 %— — %
Total$1.5750 100.00 %$1.1813 100.00 %$1.9688 100.00 %
Series G Preferred Shares:
Ordinary non-qualified income$— — %$— — %$— — %
Qualified dividend— — %— — %— — %
Capital gain0.5787 86.00 %— — %— — %
Return of capital0.0942 14.00 %— — %— — %
Total$0.6729 100.00 %$— — %$— — %
Series H Preferred Shares:
Ordinary non-qualified income$— — %$— — %$— — %
Qualified dividend— — %— — %— — %
Capital gain0.2655 86.01 %— — %— — %
Return of capital0.0432 13.99 %— — %— — %
Total$0.3087 100.00 %$— — %$— — %
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(1)    Issued upon completion of the Company's merger with LaSalle on November 30, 2018.
Of the common distributions declared on November 19, 2018 and December 14, 2018 and paid on January 15, 2019, $0.3478 was treated as a 2019 distribution for tax purposes. The preferred share distributions declared on December 14, 2018 and paid on January 15, 2019, $0.4063 per Series C Preferred Share, $0.3984 per Series D Preferred Share, $0.3984 per Series E Preferred Share and $0.3938 per Series F Preferred Share, were treated as 2019 distributions for tax purposes.
Of the common distribution declared on December 16, 2019 and paid on January 15, 2020, $0.3800 was treated as a 2019 distribution for tax purposes. The preferred share distributions declared on December 16, 2019 and paid on January 15, 2020 were treated as 2019 distributions for tax purposes.
Of the common distribution declared on December 15, 2020 and paid on January 15, 2021, $0.0100 was treated as a 2021 distribution for tax purposes. The preferred share distributions declared on December 15, 2020 and paid on January 15, 2021 were treated as 2021 distributions for tax purposes.
Of the common distribution declared on December 15, 2021 and paid on January 18, 2022, $0.0100 will be treated as a 2022 distribution for tax purposes. The preferred share distributions declared on December 15, 2021 and paid on January 18, 2022, $0.3984 of Series E, $0.3938 of Series F, $0.3984 of Series G and $0.3563 of Series H will be treated as 2022 distributions for tax purposes.
The Company's provision (benefit) for income taxes consists of the following (in thousands):
For the year ended December 31,
202120202019
Federal
Current$— $(127)$3,061 
Deferred— (6,266)(106)
State and local
Current61 668 3,938 
Deferred— 2,028 (1,721)
Income tax expense (benefit)$61 $(3,697)$5,172 
A reconciliation of the statutory federal tax expense (benefit) to the Company's income tax expense (benefit) is as follows (in thousands):
For the year ended December 31,
202120202019
Statutory federal tax expense (benefit)$(38,251)$(72,098)$25,388 
State income tax expense (benefit), net of federal tax expense (benefit)(6,990)(5,046)943 
REIT income not subject to tax22,235 53,311 (21,522)
Change in valuation allowance23,077 20,056 — 
Other(10)80 363 
Income tax expense (benefit), net$61 $(3,697)$5,172 
The Company has provided a valuation allowance against its federal and state deferred tax asset at December 31, 2021 and 2020 due to the uncertainty of realizing the loss in future years. As of December 31, 2021, the Company had a receivable of $6.9 million representing the portion of taxable losses that were carried back to prior years in which the Company had taxable income.
The significant components of the Company's deferred tax assets as of December 31, 2021 and 2020 consisted of the following (in thousands):
December 31, 2021December 31, 2020
Deferred Tax Assets:
Net operating loss carryover$41,109 $18,309 
State taxes and other2,470 1,631 
Depreciation418 980 
Total deferred tax asset before valuation allowance$43,997 $20,920 
Valuation allowance(43,997)(20,920)
Deferred tax asset net of valuation allowance$— $— 
The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal, state and local jurisdictions, where applicable. As of December 31, 2021 and 2020, the statute of limitations remains open for all major jurisdictions for tax years dating back to 2017 and 2016, respectively.