Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes

Income Taxes

11.          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 had an estimated federal net operating loss ("NOL") carry forward of $4.8 million that was utilized in 2022. As of December 31, 2022, the state NOL carryforward was $159,000, tax-effected. The net basis of our assets and liabilities for tax reporting purposes is approximately $223.8 million higher than the amounts reported in our consolidated balance sheet as of December 31, 2022.

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

	Year Ended December 31,
	2022		2021		2020
	(In thousands)
Current tax (expense) benefit	$	(1,701)	$	(709)	$	1,232
Deferred tax (expense) benefit		437		(2,832)		3,033
Income tax (expense) benefit	$	(1,264)	$	(3,541)	$	4,265

As of December 31, 2022 and 2021, we have a net deferred tax liability of $4.9 million and $5.3 million primarily related to investments in real estate, and management and leasing contracts, partially offset by deferred tax assets associated with tax versus book differences and related general and administrative expenses. 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,
	2022		2021
	(In thousands)
Deferred tax assets:
Accrued bonus	$	474	$	388
NOL		159		1,206
Deferred revenue		1,266		1,473
Capital loss		—		3,130
Charitable contributions		500		1,091
Other		307		302
Total deferred tax assets		2,706		7,590
Valuation allowance		(500)		(3,969)
Total deferred tax assets, net of valuation allowance		2,206		3,621
Deferred tax liabilities:
Basis difference - intangible assets		(3,835)		(4,911)
Basis difference - real estate		(1,722)		(3,033)
Basis difference - investments		(1,517)		(989)
Other		(35)		(28)
Total deferred tax liabilities		(7,109)		(8,961)
Net deferred tax liability	$	(4,903)	$	(5,340)

During the year ended December 31, 2022, our Board of Trustees declared cash dividends totaling $0.90 of which $0.775 were capital gain distributions for federal income tax purposes and the remaining $0.125 will be determined in 2023. 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 and $0.648 were capital gain distributions. 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.