The following table presents a summary of our domestic and foreign income (loss) before income taxes:

	Year Ended December 31,
	2020			2019		2018
	(in millions)
Domestic	$	(262	)	$	92	$	104
Foreign		(107	)		102		69
Income (loss) before income taxes	$	(369	)	$	194	$	173

The following table presents a summary of the components of our (benefit) provision for income taxes:

	Year Ended December 31,
	2020			2019			2018
	(in millions)
Current income tax expense (benefit):
Federal	$	(73	)	$	31		$	37
State		(3	)		5			12
Foreign		(3	)		26			17
Current income tax expense (benefit)		(79	)		62			66
Deferred income tax expense (benefit):
Federal		13			25			(10	)
State		(10	)		7			(1	)
Foreign		(4	)		(26	)		5
Deferred income tax expense (benefit):		(1	)		6			(6	)
(Benefit) provision for income taxes	$	(80	)	$	68		$	60

The Company reduced its current income tax payable by $25 million, $24 million and $15 million for the years ended December 31, 2020, 2019 and 2018, respectively, for tax deductions attributable to the exercise or settlement of the Company’s stock-based awards.

The significant components of our deferred tax assets and deferred tax liabilities is as follows:

	December 31,
	2020			2019
	(in millions)
Deferred tax assets:
Stock-based compensation	$	31		$	47
Net operating loss carryforwards		81			49
Provision for accrued expenses		4			6
Lease financing obligation		23			24
Foreign advertising spend		15			15
Interest carryforward		32			20
Other		20			14
Total deferred tax assets	$	206		$	175
Less: valuation allowance		(106	)		(72	)
Net deferred tax assets	$	100		$	103
Deferred tax liabilities:
Intangible assets	$	(53	)	$	(51	)
Property and equipment		(24	)		(27	)
Prepaid expenses		(2	)		(2	)
Building - corporate headquarters		(20	)		(22	)
Other		(1	)		(2	)
Total deferred tax liabilities	$	(100	)	$	(104	)
Net deferred tax asset (liability)	$	—		$	(1	)

At December 31, 2020, we had federal, state and foreign net operating loss carryforwards (“NOLs”) of approximately $4 million, $208 million and $297 million, respectively. If not utilized, the federal and state NOLs will expire at various times between 2021 and 2036 and the foreign NOLs will expire at various times between 2021 and 2032.

As of December 31, 2020, we had a valuation allowance of approximately of $106 million related to certain NOL carryforwards and other foreign deferred tax assets for which it is more likely than not, the tax benefit will not be realized. This amount represented an increase of $34 million, as compared to balance as of December 31, 2019. The increase is primarily related to additional foreign net operating losses. Except for certain foreign deferred tax assets, we expect to realize all of our deferred tax assets based on a strong history of earnings over the last several years in the U.S. and other jurisdictions, as well as the expected timing of future reversals of taxable temporary differences.

A reconciliation of the (benefit) provision for income taxes to the amounts computed by applying the statutory federal income tax rate to income (loss) before income taxes is as follows:

	Year Ended December 31,
	2020			2019			2018
	(in millions)
Income tax expense at the federal statutory rate	$	(77	)	$	40		$	36
Foreign rate differential		(9	)		(16	)		(17	)
State income taxes, net of effect of federal tax benefit		(11	)		9			9
Unrecognized tax benefits and related interest		4			11			15
Change in cost-sharing treatment of stock-based compensation		—			15			(3	)
FDII, GILTI and other provisions		—			(3	)		(5	)
Rate differential on US NOL carryback (1)		(23	)		—			—
Research tax credit		(9	)		(11	)		(9	)
Stock-based compensation		14			4			8
Change in valuation allowance		25			6			9
Local income tax on intercompany transactions (2)		1			7			10
Executive compensation		6			3			2
Other, net		(1	)		3			5
(Benefit) provision for income taxes	$	(80	)	$	68		$	60

The CARES Act made tax law changes to provide financial relief to companies as a result of the business impacts of COVID-19. Key income tax provisions of the CARES Act include changes in NOL carryback and carryforward rules, increase of the net interest expense deduction limit, and immediate write-off of qualified improvement property. The CARES Act allows us to carryback our U.S. federal NOLs incurred in 2020, generating an expected U.S. benefit of $76 million, of which $48 million will be refunded. This refund is recorded in income taxes receivable on our consolidated balance sheet as of December 31, 2020 and is expected to be received during 2021. We also reduced our long-term transition tax payable related to the 2017 Tax Act by $28 million as a result of the NOL carryback.

During 2011, the Singapore Economic Development Board accepted our application to receive a tax incentive under the International Headquarters Award. This incentive provides for a reduced tax rate on qualifying income of 5% as compared to Singapore’s statutory tax rate of 17% and is conditional upon our meeting certain employment and investment thresholds. This agreement has been extended until June 30, 2021 as we have met certain employment and investment thresholds. During 2020, the reduced tax rate resulted in an additional income tax expense of $2 million as a result of the loss position in Singapore.

As a result of the 2017 Tax Act, foreign earnings may now generally be repatriated back to the U.S. without incurring U.S. federal income tax. Historically, we have asserted our intention to indefinitely reinvest the cumulative undistributed earnings of our foreign subsidiaries. In response to increased cash requirements in the U.S. related to our declaration of a special cash dividend and other strategic initiatives during the fourth quarter of 2019, we determined that we no longer consider all foreign earnings to be indefinitely reinvested. As of December 31, 2020, $376 million of our cumulative undistributed foreign earnings were no longer considered to be indefinitely reinvested, while we intend to indefinitely reinvest $118 million of foreign earnings in our non-US subsidiaries, which determination of any related unrecognized deferred income tax liability is not practicable.

For purposes of governing certain of the ongoing relationships between Tripadvisor and Expedia at and after the Spin-Off, and to provide for an orderly transition, Tripadvisor and Expedia entered into various agreements at the time of the Spin-Off, which Tripadvisor has satisfied its obligations. However, Tripadvisor continues to be subject to certain post Spin-Off obligations under the Tax Sharing Agreement. Under the Tax Sharing Agreement between Tripadvisor and Expedia, Tripadvisor is generally required to indemnify Expedia for any taxes resulting from the Spin-Off (and any related interest, penalties, legal and professional fees, and all costs and damages associated with related stockholder litigation or controversies) to the extent such amounts resulted from (i) any act or failure to act by Tripadvisor described in the covenants in the tax sharing agreement, (ii) any acquisition of Tripadvisor equity securities or assets or those of a member of the Tripadvisor group, or (iii) any failure of the representations with respect to Tripadvisor or any member of our group to be true or any breach by Tripadvisor or any member of the Tripadvisor group of any covenant, in each case, which is contained in the separation documents or in the documents relating to the IRS private letter ruling and/or the opinion of counsel. The full text of the Tax Sharing Agreement is incorporated by reference in this Annual Report on Form 10-K as Exhibit 10.2.

By virtue of consolidated income tax returns previously filed with Expedia, we are currently under an IRS audit for the 2009, 2010 and short-period 2011 tax years. We are separately under examination by the IRS for the short-period 2011, 2012 through 2016, and 2018 tax years, under an employment tax audit by the IRS for the 2015 through 2017 tax years, and have various ongoing audits for foreign tax years, including a 2012 through 2016 HMRC audit, as well as state income tax audits. These audits include questioning of the timing and the amount of income and deductions and the allocation of income among various tax jurisdictions. These examinations may lead to proposed or ordinary course adjustments to our taxes. We are no longer subject to tax examinations by tax authorities for years prior to 2009. As of December 31, 2020, no material assessments have resulted, except as noted below regarding our 2009, 2010, and 2011 IRS audit with Expedia, our 2012 through 2016 standalone IRS audit, and our 2012 through 2016 HMRC audit.

In January 2017 and April 2019, as part of the IRS audit of Expedia, we received Notices of Proposed Adjustment from the IRS for the 2009, 2010, and 2011 tax years. Subsequently, in September 2019, as part of our standalone audit, we received Notices of Proposed Adjustment from the IRS for the 2012 and 2013 tax years, and in August 2020, we received Notices of Proposed Adjustment from the IRS for the 2014, 2015, and 2016 tax years. These proposed adjustments are related to certain transfer pricing arrangements with our foreign subsidiaries, and would result in an increase to our worldwide income tax expense in an estimated range of $95 million to $105 million at the close of the audit if the IRS prevails, which includes $20 million to $30 million related to the 2009 through 2011 pre Spin-Off tax years. The estimated range takes into consideration competent authority relief and transition tax regulations, and is exclusive of deferred tax consequences and interest expense, which would be significant. We disagree with the proposed adjustments and we intend to defend our position through applicable administrative and, if necessary, judicial remedies. Our policy is to review and update tax reserves as facts and circumstances change. Based on our interpretation of the regulations and available case law, we believe the position we have taken with regard to transfer pricing with our foreign subsidiaries is sustainable. In addition to the risk of additional tax for 2009 through 2016 transactions, if the IRS were to seek transfer pricing adjustments of a similar nature for transactions in subsequent years, we would be subject to significant additional tax liabilities. We have requested competent authority assistance under the Mutual Agreement Procedure (“MAP”) for tax years 2009 through 2013. We expect the competent authorities to present a resolution for the 2009 through 2011 tax years in the near future. Upon receipt, we will assess the resolution provided by the competent authorities as well as its impact on our existing income tax reserves for all open subsequent years.

In January 2021, we received an issue closure notice relating to adjustments for 2012 through 2016 tax years from HMRC. These proposed adjustments are related to certain transfer pricing arrangements with our foreign subsidiaries and would result in an increase to our worldwide income tax expense in an estimated range of $45 million to $55 million, exclusive of interest expense, at the close of the audit if HMRC prevails. We disagree with the proposed adjustments and we intend to defend our position through applicable administrative and, if necessary, judicial remedies. Our policy is to review and update tax reserves as facts and circumstances change. Based on our interpretation of the regulations and available case law, we believe the position we have taken with regard to transfer pricing with our foreign subsidiaries is sustainable.

In July 2015, the United States Tax Court (the “Court”) issued an opinion favorable to Altera with respect to Altera’s litigation with the IRS. This opinion was submitted as a final decision under Tax Court Rule 155 during

December 2015. The litigation relates to the treatment of stock-based compensation expense in an inter-company cost-sharing arrangement with Altera’s foreign subsidiary. In its opinion, the Court accepted Altera’s position of excluding stock-based compensation from its inter-company cost-sharing arrangement. The IRS appealed the Court decision on February 19, 2016. On June 7, 2019, a three-judge panel from the Ninth Circuit Court of Appeals reversed the Court’s decision and upheld the validity of the Treasury regulation (Reg. sec. 1.482-7A(d)(2)) requiring stock-based compensation costs to be included in the costs shared in a cost-sharing arrangement. Based on this Ninth Circuit Court of Appeals decision, we recorded a cumulative income tax expense of $15 million during the year ended December 31, 2019, which was a reversal of income tax benefits taken by the Company since the Court’s 2015 opinion. In November 2019, the Ninth Circuit denied Altera’s request for a rehearing en banc. On February 10, 2020, Altera filed a certiorari petition with the Supreme Court, asking it to hear an appeal of the Ninth Circuit’s decision. On June 22, 2020, the Supreme Court denied Altera’s request to review the Ninth Circuit decision.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (excluding interest and penalties) is as follows:

	December 31,
	2020		2019			2018
	(in millions)
Balance, beginning of year	$	140	$	136		$	123
Increases to tax positions related to the current year		3		11			11
Increases to tax positions related to the prior year		1		1			2
Reductions due to lapsed statute of limitations		—		—			—
Decreases to tax positions related to the prior year		—		(8	)		—
Settlements during current year		—		—			—
Balance, end of year	$	144	$	140		$	136

As of December 31, 2020, we had $144 million of unrecognized tax benefits, net of interest, which is classified as long-term and included in other long-term liabilities and deferred income taxes, net on our consolidated balance sheet. The amount of unrecognized tax benefits, if recognized, would reduce income tax expense by $74 million, due to correlative adjustments in other tax jurisdictions. We recognize interest and penalties related to unrecognized tax benefits in income tax expense on our consolidated statement of operations. As of December 31, 2020 and 2019, total gross interest accrued was $35 million and $29 million, respectively. We anticipate that the liability for unrecognized tax benefits could decrease by up to $4 million within the next twelve months due to the settlement of examinations of issues with tax authorities.