Income Taxes

We elected and qualified to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with our tax year ended December 31, 2014. In order to continue to qualify as a REIT, we must annually distribute to our stockholders 90% of our REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding net capital gain, and must comply with various other organizational and operational requirements. Distributions to stockholders for the tax year ended December 31, 2015 were all deemed to be return of capital.

The components of income tax expense for the year ended December 31, 2015 are presented in the following table, in thousands. There was no income tax expense for the year ended December 31, 2014.



	Year Ended December 31,
	2015			2014
Current:
Federal	$	2,664		$	633
State	548			91
	3,212			724
Deferred:
Federal	(98		)	(116		)
State	(9		)	(17		)
	(107		)	(133		)
Income tax expense	$	3,105		$	591

A reconciliation of the statutory federal income tax benefit of the Company's income tax expense is presented in the following table, in thousands. There was no income tax expense for the year ended December 31, 2014.



	Year Ended December 31,
	2015			2014
Statutory federal income tax benefit	$	(31,121	)	$	(4,845	)
Effect of non-taxable REIT loss	33,720			5,361
State income tax expense, net of federal tax benefit	506			73
Other	—			2
Income tax expense	$	3,105		$	591

The tax effect of each type of temporary difference and carryforward, that gives rise to the deferred tax assets and liabilities as of December 31, 2015 are presented in the following table, in thousands. There were no temporary differences or carryforwards for the year ended December 31, 2014.



	Year Ended December 31,
	2015			2014
Deferred tax asset:
Employee-related compensation	$	—		$	152
Other	86			11
Net operating losses	186			$	—
	$	272		$	163
Deferred tax liability:
Investments in unconsolidated joint ventures	$	(32	)	$	(30	)
Total deferred tax liability	(32		)	(30		)
Net deferred tax asset	$	240		$	133

As of December 31, 2015, the Company had a net deferred tax asset of $0.2 million. The Company believes that it is more likely than not that the TRS will generate sufficient taxable income to realize in full this deferred tax asset. Accordingly, no valuation allowance has been recorded as of December 31, 2015.

As of December 31, 2015, the tax years that remain subject to examination by major tax jurisdictions include 2013 and 2014.