NOTE 14 - INCOME TAXES

The following table details the allocation of the Company's provision (benefit) for income taxes from continuing operations between RAI and RSO:



	Years Ended December 31,
	2014			2013			2012
RAI	$	5,853		$	1,657		13,117
RSO, net of eliminations	(2,212		)	(1,041		)	14,602
Total	$	3,641		$	616		$	27,719

The following table details the components of the Company's provision (benefit) for income taxes from continuing operations, excluding RSO (in thousands):



	Years Ended December 31,
	2014			2013			2012
Current tax (benefit) provision:
Federal	$	(170	)	$	746		$	—
State	592			1,042			1,225
Foreign	43			(156		)	56
Total current tax provision	465			1,632			1,281
Deferred tax provision (benefit)
Federal	5,039			1,399			13,045
State	349			(1,374		)	(1,209		)
Foreign	—			—			—
Total deferred tax provision	5,388			25			11,836
Total income tax provision	$	5,853		$	1,657		$	13,117

A reconciliation between the federal statutory income tax rate and the Company's effective income tax rate, excluding RSO, is as follows:



	Years Ended December 31,
	2014		2013		2012
Statutory tax rate	35	%	35	%	35	%
State and local taxes, net of federal benefit	5		(10	)	3
Deconsolidation adjustment	—		—		(6	)
Foreign adjustment	—		(2	)	—
Valuation allowance for deferred tax assets	—		—		3
Equity-based compensation (benefit) expense	(1	)	1		—
Dividend received deduction	(2	)	(2	)	—
Other items	2		(5	)	—
	39	%	17	%	35	%

Deferred tax assets (liabilities) are provided for the effects of temporary differences between the tax basis of an asset or liability and its reported amount in the consolidated balance sheets. These temporary differences will result in taxable or deductible amounts in future years. The components of deferred tax assets, net, excluding RSO, are as follows (in thousands):



	December 31,
	2014			2013
Deferred tax assets related to:
Federal, foreign, state and local operating loss carryforwards	$	10,401		$	8,999
Capital loss carryforwards	1,192			450
Unrealized loss on investments	3,941			3,664
Investment in partnerships	2,201			2,572
Provision for credit losses	7,354			15,600
Accrued expenses	1,794			2,142
Employee equity compensation awards	1,864			1,005
Deferred income	40			—
Property and equipment basis differences	—			96
Gross deferred tax assets	28,787			34,528
Less: valuation allowance	(4,906		)	(4,584		)
	23,881			29,944
Deferred tax liabilities related to:
Intangible assets	(392		)	—
Unremitted foreign earnings	(76		)	—
Deferred income	—			(2,175		)
Property and equipment basis differences	(109		)	—
	(577		)	(2,175		)

Deferred tax assets, net	$	23,304		$	27,769

As a result of certain realization requirements, the table of deferred tax assets and liabilities shown above does not include certain deferred tax assets as of December 31, 2014 and 2013 that arose directly from tax deductions related to equity compensation greater than compensation recognized for financial reporting. Equity will be increased by $2.0 million if and when such deferred tax assets are ultimately realized. The Company uses a "with and without approach" when determining when excess tax benefits have been realized.

At December 31, 2014, the Company had total net operating tax loss carryforwards ("NOLs") of $170.9 million (deferred tax asset of $9.9 million), including federal NOLs of $2.3 million and state/local NOLs of $168.6 million, that will expire between 2015 and 2035. The Company believes it will be able to utilize up to $96.0 million of these NOLs (deferred tax asset of $5.9 million) prior to their expiration and has changed its valuation allowance against gross NOLs from $61.9 million to $74.9 million (tax effected expense of $583,000). In addition, the Company changed its valuation allowance against gross state timing differences from $1.7 million to $1.3 million (tax effected benefit of $256,000) that the Company believes it will not be able to use. Management will continue to assess its estimate of the amount of NOLs that the Company will be able to utilize. Furthermore, its estimate of the required valuation allowance could be adjusted in the future if projections of taxable income are revised. Management believes it is more likely than not that the other net deferred tax assets will be realized based on carryback of capital losses and tax planning strategies that will generate future taxable income during the periods in which these temporary differences become deductible.

The Company is subject to examination by the U.S. Internal Revenue Service (“IRS”) and by the taxing authorities in states in which the Company has significant business operations, such as Pennsylvania and New York. The Company is currently undergoing an IRS Excise Tax examination for year 2011, a Kansas income tax examination for tax years 2010 through 2012, a Los Angeles income tax examination for tax years 2010 through 2012, and a Philadelphia income tax examination for tax years 2010 through 2013. The Company is not subject to IRS examination for tax return years before 2010 and is not subject to state and local income tax examinations for years before 2007.