The federal income tax expense (benefit) on continuing operations (in millions) was as follows:



	For the Years Ended December 31,
	2019			2018		2017
Current	$	175		$	179	$	118
Deferred		(212	)		78		(1,405	)
Federal income tax expense (benefit)	$	(37	)	$	257	$	(1,287	)

A reconciliation of the effective tax rate differences (in millions) was as follows:



	For the Years Ended December 31,
	2019			2018			2017
Income (loss) before taxes	$	577		$	1,830		$	731
Federal statutory rate		21%			21%			35%
Federal income tax expense (benefit) at federal statutory rate		121			384			256
Effect of:
Tax-preferred investment income ⁽¹⁾		(99	)		(87	)		(280	)
Tax credits		(40	)		(39	)		(29	)
Excess tax benefits from stock-based compensation		(6	)		(3	)		(8	)
Goodwill impairment		-			-			316
Tax impact associated with the Tax Cuts and Jobs Act ⁽²⁾		(16	)		3			(1,526	)
Other items		3			(1	)		(16	)
Federal income tax expense (benefit)	$	(37	)	$	257		$	(1,287	)
Effective tax rate		-6%			14%			-176%

⁽¹⁾Relates primarily to separate account dividends eligible for the dividends-received deduction. As a result of the Tax Cuts and Jobs Act (the “Tax Act”), the recorded tax benefit for the separate account dividends-received deduction was substantially less in 2019 and 2018 as compared to 2017.

⁽²⁾As a result of the enactment of the Tax Act in 2017, we remeasured our existing deferred tax balances at the prevailing corporate federal income tax rate of 21% and recognized a $1.5 billion tax benefit. In 2018, we recognized a $3 million net tax benefit from the impact of the reduced federal statutory rate under the Tax Act on our adoption of an Internal Revenue Service pronouncement related to variable annuity contracts. In 2019, we recognized a $16 million net tax benefit from the impact of the reduced corporate tax rate under the Tax Act on our election to revalue policyholder tax reserves.


	As of December 31,
	2019			2018
Current	$	255		$	205
Deferred		(2,605	)		(1,421	)
Total federal income tax asset (liability)	$	(2,350	)	$	(1,216	)

Significant components of our deferred tax assets and liabilities (in millions) were as follows:



	As of December 31,
	2019			2018
Deferred Tax Assets
Future contract benefits and other contract holder funds	$	527		$	549
Reinsurance related embedded derivative liability		79			-
Compensation and benefit plans		135			120
Intangibles		26			40
Net operating losses		216			264
Other		14			59
Total deferred tax assets	$	997		$	1,032
Deferred Tax Liabilities
DAC	$	854		$	1,380
VOBA		191			302
Net unrealized gain on fixed maturity AFS securities		2,216			333
Net unrealized gain on trading securities		70			25
Investment activity		154			334
Reinsurance related embedded derivative asset		-			39
Deferred gain on business sold through reinsurance		4			34
Other		113			6
Total deferred tax liabilities	$	3,602		$	2,453
Net deferred tax asset (liability)	$	(2,605	)	$	(1,421	)

As of December 31, 2019, we have $1.0 billion of net operating losses to carry forward to future years. The net operating losses arose in tax year 2018, and under the Tax Act changes, have an unlimited carryforward period. As a result, management believes that it is more likely than not that the deferred tax asset associated with the loss carryforwards will be realized. Inclusive of the tax attribute for the net operating losses, although realization is not assured, management believes that it is more likely than not that we will realize the benefits of all of our deferred tax assets, and, accordingly, no valuation allowance has been recorded.

As of December 31, 2019, and 2018, $41 million and $12 million, respectively, of our unrecognized tax benefits presented below, if recognized, would have affected our federal income tax expense (benefit) and our effective tax rate. We are not aware of any events for which it is likely that unrecognized tax benefits will significantly increase or decrease within the next year. A reconciliation of the unrecognized tax benefits (in millions) was as follows:



	For the Years Ended
	December 31,
	2019		2018
Balance as of beginning-of-year	$	12	$	11
Increases for prior year tax positions		29		-
Increases for current year tax positions		-		1
Balance as of end-of-year	$	41	$	12

We recognize interest and penalties accrued, if any, related to unrecognized tax benefits as a component of tax expense. For the years ended December 31, 2019, 2018 and 2017, we recognized no interest and penalty expense (benefit), and there was no accrued interest and penalty expense related to the unrecognized tax benefits as of December 31, 2019 and 2018.