Income Taxes

12 Months Ended

Dec. 31, 2021

Income Taxes

Income Taxes

10.          Income Taxes

We have elected to be taxed as a REIT, and accordingly, we have incurred no federal income tax expense related to our REIT subsidiaries except for our TRSs.

Our consolidated financial statements include the operations of our TRSs, which are subject to federal, state and local income taxes on their taxable income. As a REIT, we may also be subject to federal excise taxes if we engage in certain

types of transactions. Continued qualification as a REIT depends on our ability to satisfy the REIT distribution tests, stock ownership requirements and various other qualification tests. Our TRSs have estimated federal and state net operating loss (“NOL”) carry forwards of $4.8 million and $11.0 million as of December 31, 2021 and 2020, all of which are subject to limitations. The net basis of our assets and liabilities for tax reporting purposes is approximately $297.0 million higher than the amounts reported in our consolidated balance sheet as of December 31, 2021.

The following is a summary of our income tax (expense) benefit:

	Year Ended December 31,
	2021		2020		2019
	(In thousands)
Current tax (expense) benefit	$	(709)	$	1,232	$	(34)
Deferred tax (expense) benefit		(2,832)		3,033		1,336
Income tax (expense) benefit	$	(3,541)	$	4,265	$	1,302

As of December 31, 2021 and 2020, we have a net deferred tax liability of $5.3 million and $2.5 million primarily related to the management and leasing contracts assumed in the Combination, partially offset by deferred tax assets associated with tax versus book differences, related general and administrative expenses and the NOL carry forward from 2020 and 2019, as well as NOLs converted from charitable contribution carry forwards from 2021 and 2020. We are subject to federal, state and local income tax examinations by taxing authorities for the tax years ending in 2018 through 2021.

	December 31,
	2021		2020
	(In thousands)
Deferred tax assets:
Accrued bonus	$	388	$	1,921
NOL		1,206		2,770
Deferred revenue		1,473		—
Capital loss		3,130		1,283
Charitable contributions		1,091		1,533
Other		302		265
Total deferred tax assets		7,590		7,772
Valuation allowance		(3,969)		(2,072)
Total deferred tax assets, net of valuation allowance		3,621		5,700
Deferred tax liabilities:
Basis difference - intangible assets		(4,911)		(5,887)
Basis difference - real estate		(3,033)		(2,164)
Basis difference - investments		(989)		—
Other		(28)		(158)
Total deferred tax liabilities		(8,961)		(8,209)
Net deferred tax liability	$	(5,340)	$	(2,509)

During the year ended December 31, 2021, our Board of Trustees declared cash dividends totaling $0.90 of which $0.252 was taxable as ordinary income for federal income tax purposes, $0.423 were capital gain distributions and the remaining $0.225 will be determined in 2022. During the year ended December 31, 2020, our Board of Trustees declared cash dividends totaling $0.90 of which $0.489 was taxable as ordinary income for federal income tax purposes and $0.411 were capital gain distributions. During the year ended December 31, 2019, our Board of Trustees declared cash dividends totaling $0.90 of which $0.468 was taxable as ordinary income for federal income tax purposes and $0.432 were capital gain distributions.