Income Taxes

Income tax benefit (expense) for the years ended December 31, 2013, 2012, and 2011 consist of the following:



	2013			2012		2011
Current:
Federal	$	349		$	34	$	(2,091	)
State	169			118		(70		)
Total	518			152		(2,161		)
Deferred:
Federal	(366		)	196		(52,450		)
State	(561		)	39		(1,047		)
Total	(927		)	235		(53,497		)
Income tax (benefit) expense	$	(409	)	$	387	$	(55,658	)

Total income tax expense (benefit) for the years ended December 31, 2013, 2012, and 2011 was allocated in the consolidated financial statements as follows:



	2013			2012		2011
Income tax (benefit) expense	$	(409	)	$	387	$	(55,658	)
Tax benefits recorded on Consolidated Statement of Changes in Equity:
Excess tax expense on stock-based compensation	—			—		907
Deferred tax expense on accumulated other comprehensive income	—			—		7,888
Total	—			—		8,795
Total income tax (benefit) expense	$	(409	)	$	387	$	(46,863	)

Income tax expense (benefit) attributable to income from operations differed from the amount computed by applying the statutory federal income tax rate of 35% to pre-tax income as a result of the following:



	2013			2012			2011
Tax at the statutory federal rate	$	1,603		$	2,240		$	(135,078	)
State income taxes (net of federal benefit)	160			224			(13,508		)
Increase (decrease) in valuation allowance	(2,218		)	(2,870		)	94,505
Real estate investment trust income exclusion	—			—			(1,468		)
Other	46			793			(109		)
Total income tax (benefit) expense	$	(409	)	$	387		$	(55,658	)

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities as of December 31, 2013 and 2012 are presented below:



	2013			2012
Deferred tax assets:
Federal net operating carryforwards	$	26,884		$	29,222
State net operating loss carryforwards	20,759			20,888
Impairment losses	151,050			150,514
Prepaid income from land sales	10,210			10,262
Other	4,697			4,968
Total gross deferred tax assets	213,600			215,854
Valuation allowance	(93,058		)	(95,276		)
Total net deferred tax assets	120,542			120,578
Deferred tax liabilities:
Investment in real estate and property and equipment basis differences	1,726			2,055
Deferred gain on land sales and involuntary conversions	31,385			32,255
Prepaid pension asset	15,596			16,173
Installment sale	58,969			58,138
Total gross deferred tax liabilities	107,676			108,621
Net deferred tax asset	$	12,866		$	11,957

At December 31, 2013, the Company had a federal net operating loss carryforwards of $76.8 million and a state net operating loss carryforwards of $593.1 million. At December 31, 2012, the Company had a federal net operating loss carryforwards of $83.5 million and a state net operating loss carryforwards of $596.8 million. These net operating losses are available to offset future taxable income through 2031.

In general, a valuation allowance is recorded if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. Realization of the Company’s deferred tax assets is dependent upon the Company generating sufficient taxable income in future years in the appropriate tax jurisdictions to obtain a benefit from the reversal of deductible temporary differences and from loss carryforwards. Based on the timing of reversal of future taxable amounts and the Company’s history of losses, management does not believe it met the requirements to realize the benefits of certain of its deferred tax assets; therefore, the Company has maintained a valuation allowance. During 2013, the valuation allowance has decreased by $2.2 million primarily as a result of taxable income in 2013. The valuation allowance was $93.1 million at December 31, 2013 and $95.3 million at December 31, 2012.

Included in other deferred tax assets is a valuation allowance to offset the deferred tax component recognized in Accumulated other comprehensive loss of $2.1 million and $3.0 million at December 31, 2013 and December 31, 2012, respectively.

At December 31, 2013 and 2012, the Company had a valuation allowance of $8.4 million and $9.6 million, respectively related to state net operating losses and charitable contribution carryforwards.

The Company had approximately $1.7 million of total unrecognized tax benefits as of December 31, 2013 and 2012, respectively. Of this total, there are no amounts of unrecognized tax benefits that, if recognized, would affect the effective income tax rate. There were no decreases or increases related to prior year or current year tax positions. There were no penalties required to be accrued at December 31, 2013 and 2012. The Company recognizes interest and/or penalties related to income tax matters in income tax (expense) benefit.

The IRS completed the examination of the Company’s tax returns for 2007, 2008, 2009 and 2011 without adjustment.