Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

The following summarizes income tax expense (benefit) for the years ended December 31:


thousands	2022		2021		2020
Current	$	18,478	$	4,797	$	826
Deferred	42,022		10,356		10,827
Total	$	60,500	$	15,153	$	11,653

Schedule of reconciliation of income tax expense (benefit) computed by applying the Federal corporate tax rate to the provision (benefit) for income taxes

Reconciliation of the Income tax expense (benefit) if computed at the U.S. federal statutory income tax rate to the Company’s reported Income tax expense (benefit) for the years ended December 31 is as follows:


thousands except percentages	2022			2021			2020
Income (loss) before income taxes	$	245,136		$	64,077		$	8,480
U.S. federal statutory tax rate	21.0		%	21.0		%	21.0		%
Tax computed at the U.S. federal statutory rate	$	51,479		$	13,456		$	1,781
Increase (decrease) in valuation allowance, net	1,065			2,378			11,822
State income tax expense (benefit), net of federal income tax	5,483			(3,182)			(2,608)

Tax expense (benefit) from other change in rates, prior period adjustments and other permanent differences	315			(181)			2,271

Tax expense on compensation disallowance	2,180			1,570			1,553
Net (income) loss attributable to noncontrolling interests (a)	(22)			1,507			(4,826)
Tax expense (benefit) on tax credits	—			(395)			1,660



Income tax expense (benefit)	$	60,500		$	15,153		$	11,653
Effective tax rate	24.7		%	23.6		%	137.4		%

(a)The Company deconsolidated 110 North Wacker in the third quarter of 2020. Refer to Note 2 - Investments in Unconsolidated Ventures for additional information.

Schedule of amounts and expiration dates of operating loss, charitable contribution and tax credit carryforwards

As of December 31, 2022, the amounts and expiration dates of operating loss carryforwards for tax purposes are as follows:


thousands	Amount

Net operating loss carryforwards - Federal (a)	$	132,736
Net operating loss carryforwards - State (b)	606,681

(a)Federal net operating loss carryforwards have an indefinite carryforward period.

(b)State net operating loss carryforwards of $279.5 million have an indefinite carryforward period. The remaining $327.2 million of carryforwards have varying carryforward periods through 2042. A valuation allowance has been recorded against the deferred tax benefit related to a majority of the state net operating loss carryforwards.

Summary of tax effects of temporary differences and carryforwards included in net deferred tax liabilities

The following summarizes tax effects of temporary differences and carryforwards included in the net deferred tax liabilities as of December 31:


thousands	2022		2021
Deferred tax assets:
Operating and Strategic Developments properties, primarily differences in basis of assets and liabilities	$	24,141	$	—

Operating loss and tax carryforwards	65,829		119,884
Total deferred tax assets	89,970		119,884
Valuation allowance	(39,478)		(40,477)
Total net deferred tax assets	$	50,492	$	79,407
Deferred tax liabilities:
Property associated with MPCs, primarily differences in the tax basis of land assets and treatment of interest and other costs	$	(214,045)	$	(176,904)
Operating and Strategic Developments properties, primarily differences in basis of assets and liabilities	—		(27,364)
Deferred income	(90,783)		(79,976)
Total deferred tax liabilities	(304,828)		(284,244)
Total net deferred tax liabilities	$	(254,336)	$	(204,837)