Income Taxes

For the year ended December 31, 2017, we intend to elect to be taxed as a REIT, and our former parent also elected to be taxed as a REIT for the years ended December 31, 2016 and 2015. Accordingly, we incurred no federal income tax expense for each of the three years ended December 31, 2017 related to our REIT subsidiaries. The only federal income taxes included in the accompanying financial statements relate to activities of our TRSs. Due to the passage of federal tax reform legislation, which was signed into law on December 22, 2017 and which we refer as the 2017 Tax Act, our TRSs were required to decrease the net deferred tax liability, which resulted in a net tax benefit of $3.9 million during the year ended December 31, 2017. The remainder of the tax benefit is due to the net loss of the TRSs.

Our 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. As of December 31, 2017, our TRSs have an estimated federal and state net operating loss of $6.2 million, which will expire in 2037. As of December 31, 2017, the cost of real estate, net of accumulated depreciation, for federal income tax purposes was approximately $3.5 billion.

The following is a summary of our income tax benefit (expense) for each of the three years in the period ended December 31, 2017:



	Year Ended December 31,
	2017			2016			2015
	(in thousands)
Current tax benefit (expense)	$	(496	)	$	(1,083	)	$	(420	)
Deferred tax benefit (expense)	10,408			—			—
Income tax benefit (expense)	$	9,912		$	(1,083	)	$	(420	)

As of December 31, 2017, we have a net deferred tax liability of $8.2 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 net operating loss for 2017. We are subject to federal, state and local income tax examinations by taxing authorities for 2014 through 2017.



	December 31,
	2017			2016
	(in thousands)
Deferred tax assets:
Accrued bonus	$	1,675		$	—
Net operating loss	1,710			—
Other	805			—
Total deferred tax assets	4,190			—
Deferred tax liabilities:
Management and leasing contracts	(11,840		)	—
Other	(552		)	—
Total deferred tax liabilities	(12,392		)	—
Net deferred tax liability	$	(8,202	)	$	—

During the year ended December 31, 2017, our Board of Trustees declared cash dividends of $0.45 per common share of which $0.31 was taxable as ordinary income for federal income tax purposes in 2017 and the remaining $0.14 will be determined in 2018. No dividends were declared or paid in 2016 and 2015.