The Company has elected to be taxed as a REIT under the applicable provisions of the Code for every year beginning with the year ended December 31, 1985. The Company has also elected for certain of its subsidiaries to be treated as TRSs (the “TRS entities”) which are subject to federal and state income taxes. All entities other than the TRS entities are collectively referred to as the “REIT” within this Note 16. Certain REIT entities are also subject to state, local and foreign income taxes.

Distributions with respect to our common stock can be characterized for federal income tax purposes as ordinary dividends, capital gains, nondividend distributions or a combination thereof. The following table shows the characterization of our annual common stock distributions per share:



	Year Ended December 31,
	2019		2018		2017
Ordinary dividends⁽¹⁾	$	0.7633	$	0.9578	$	1.4800
Capital gains	0.2714		0.5222		—
Nondividend distributions	0.4453		—		—
	$	1.4800	$	1.4800	$	1.4800

The TRS entities subject to tax reported losses before income taxes from continuing operations of $100 million, $59 million, and $58 million for the years ended December 31, 2019, 2018, and 2017, respectively. The REIT’s losses from continuing operations before income taxes from the U.K. prior to deconsolidation in June 2018 were $11 million and $4 million for the years ended December 31, 2018 and 2017, respectively.



	Year Ended December 31,
	2019			2018			2017
Current
Federal	$	261		$	(568	)	$	949
State	729			4,003			1,504
Foreign	—			84			1,737
Total current	$	990		$	3,519		$	4,190

Deferred
Federal	$	(16,061	)	$	(11,905	)	$	2,730
State	(2,191		)	(4,589		)	(5,889		)
Foreign	—			(4,879		)	(2,364		)
Total deferred	$	(18,252	)	$	(21,373	)	$	(5,523	)

Total income tax expense (benefit)	$	(17,262	)	$	(17,854	)	$	(1,333	)

On December 22, 2017, the Tax Cuts and Jobs Act was signed into law. As a result of the reduced U.S. federal corporate tax rate, the Company recorded a tax expense of $17 million, due to a remeasurement of deferred tax assets and liabilities, which is included in total deferred tax expense (benefit) in the table above.

The following table reconciles income tax expense (benefit) from continuing operations at statutory rates to actual income tax expense recorded (in thousands):



	Year Ended December 31,
	2019			2018			2017
Tax benefit at U.S. federal statutory income tax rate on income or loss subject to tax	$	(20,923	)	$	(17,857	)	$	(21,085	)
State income tax expense, net of federal tax	(3,845		)	(1,313		)	(1,222		)
Gross receipts and margin taxes	1,430			1,580			1,716
Foreign rate differential	—			301			632
Effect of permanent differences	20			(34		)	6
Return to provision adjustments	157			(278		)	1,597
Remeasurement of deferred tax assets and liabilities	—			—			17,080
Increase (decrease) in valuation allowance	4,583			(253		)	(57		)
Change in tax status of TRS	1,316			—			—
Total income tax expense (benefit)	$	(17,262	)	$	(17,854	)	$	(1,333	)

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table summarizes the significant components of the Company’s deferred tax assets and liabilities from continuing operations (in thousands):



	December 31,
	2019			2018			2017
Property, primarily differences in depreciation and amortization, the basis of land, and the treatment of interest and certain costs	$	40,466		$	31,034		$	31,691
Net operating loss carryforward	33,771			20,559			10,720
Expense accruals and other	3,258			2,424			229
Valuation allowance	(4,878		)	(295		)	(548		)
Net deferred tax assets	$	72,617		$	53,722		$	42,092

At December 31, 2019 the Company had a net operating loss (“NOL”) carryforward of $134 million related to the TRS entities. This amount can be used to offset future taxable income, if any. If unused, $22 million will begin to expire in 2035. The remainder, totaling $112 million, may be carried forward indefinitely.

The Company records a valuation allowance against deferred tax assets in certain jurisdictions when it cannot sustain a conclusion that it is more likely than not that it can realize the deferred tax assets during the periods in which these temporary differences become deductible. The deferred tax asset valuation allowance is adequate to reduce the total deferred tax assets to an amount that the Company estimates will “more-likely-than-not” be realized.



	December 31,
	2019		2018		2017
Total unrecognized tax benefits at January 1	$	—	$	—	$	—
Gross amount of increases for prior years' tax positions	469		—		—
Total unrecognized tax benefits at December 31	$	469	$	—	$	—

The Company had unrecognized tax benefits of $0.5 million at December 31, 2019, that, if recognized, would reduce the annual effective tax rate. The Company accrued no interest or penalties related to the unrecognized tax benefits during 2019. The Company does not expect the unrecognized tax benefits to increase or decrease materially in 2020.

The Company files numerous U.S. federal, state and local income and franchise tax returns. With a few exceptions, the Company is no longer subject to U.S. federal, state, or local tax examinations by taxing authorities for years prior to 2016.