Income Taxes

6 Months Ended

Jun. 30, 2011

Income Taxes [Abstract]

Income Taxes

Note 14 - Income Taxes

The Company is qualified as a REIT under the provisions of the Code. To maintain qualification as a REIT, the Company is required to distribute at least 90% of its taxable income to shareholders and meet certain other requirements.

As a REIT, the Company is generally not liable for federal corporate income taxes. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to federal and state income taxes on its taxable income at regular corporate tax rates. Even if the Company maintains its qualification as a REIT, the Company may be subject to certain state and local taxes on its income and property, and to federal income and excise taxes on its undistributed income. State tax expense was $1,242 and $1,324 during the three months ended June 30, 2011 and 2010, respectively, and $2,046 and $2,264 during the six months ended June 30, 2011 and 2010, respectively.

The Company has also elected taxable REIT subsidiary status for some of its subsidiaries.  This enables the Company to receive income and provide services that would otherwise be impermissible for REITs. For these entities, deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of assets and liabilities at the enacted tax rates expected to be in effect when the temporary differences reverse. A valuation allowance for deferred tax assets is provided if the Company believes all or some portion of the deferred tax asset may not be realized. An increase or decrease in the valuation allowance resulting from changes in circumstances that may affect the realizability of the related deferred tax asset is included in income or expense, as applicable.

The Company recorded an income tax benefit of $4,653 and $1,911 for the three months ended June 30, 2011 and 2010, respectively. The income tax benefit in 2011 consisted of a current tax provision of $14 and deferred tax provision of $4,667.  The income tax benefit in 2010 consisted of a current tax benefit of $4,980 and a deferred tax provision of $3,069.  

The Company recorded an income tax benefit of $6,423 and $3,788 for the six months ended June 30, 2011 and 2010, respectively.  The income tax benefit in 2011 consisted of a current and deferred income tax benefit of $1,498 and $4,925, respectively.  The income tax benefit in 2010 consisted of a current tax benefit of $6,370 and a deferred tax provision of $2,582.

 The Company had a deferred tax asset of $10,557 and $7,074 at June 30, 2011 and December 31, 2010, respectively. The Company also had a deferred tax liability of $2,941 at December 31, 2010.  The deferred tax asset is included in other assets, while the deferred tax liability is included in accounts payable and accrued liabilities.  The deferred taxes primarily consisted of operating expense accruals, net operating loss carryforwards, share-based compensation and differences between book and tax depreciation.  There was no deferred tax liability at June 30, 2011.

The Company reports any income tax penalties attributable to its properties as property operating expenses and any corporate-related income tax penalties as general and administrative expenses in its statement of operations.  In addition, any interest incurred on tax assessments is reported as interest expense.  The Company reported nominal interest and penalty amounts for the three and six month periods ended June 30, 2011 and 2010, respectively.