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Discontinued Operations
 12 Months Ended
Dec. 31, 2020
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations Discontinued Operations
During 2019, management divested the Government Solutions (“GS”) segment as a result of the Firm’s decision to focus solely on the commercial technical and professional staffing services and solutions space. The GS segment consisted of Kforce Government Solution (“KGS”), our federal government solutions business, and TFX, our federal government product business.
On April 1, 2019, Kforce completed the sale of all of the issued and outstanding stock of Kforce Government Holdings, Inc., including its wholly-owned subsidiary KGS, to ManTech International Corporation for a cash purchase price of $115.0 million. Our gain on the sale of KGS, net of transaction costs, was $72.3 million. Total transaction costs were $9.6 million, which primarily includes legal and broker fees, transaction bonuses and accelerated stock-based compensation expense for KGS management triggered by a change in control of KGS.
On June 7, 2019, Kforce completed the sale of all of the issued and outstanding stock of TFX to an unaffiliated third party for a cash purchase price of $18.4 million less a post-closing working capital adjustment of $0.7 million. Our gain on the sale of TFX, net of transaction costs, was $7.0 million. Total transaction costs were $2.2 million, which primarily includes legal and broker fees and transaction bonuses. Due to the sale of TFX, we finalized the settlement of a contingent consideration liability related to the acquisition of TFX in 2014 and paid $0.6 million during the year ended December 31, 2019.
Since the divestitures, Kforce has had no significant continuing involvement in the operations of KGS and TFX.
The results of operations for both KGS and TFX have been reported as discontinued operations in our consolidated financial statements prior to their disposition. The following table summarizes the income from discontinued operations, net of tax for the GS segment (in thousands):
YEARS ENDED DECEMBER 31,
202020192018
Revenue$— $27,737 $114,416 
Direct costs— 19,494 82,295 
Gross profit— 8,243 32,121 
Selling, general and administrative expenses— 6,988 21,862 
Depreciation and amortization— 307 995 
Income from discontinued operations— 948 9,264 
Gain on sale of discontinued operations— 79,318 — 
Other (expense) income, net— (436)9 
Income from discontinued operations, before income taxes— 79,830 9,273 
Income tax expense— 3,534 2,169 
Income from discontinued operations, net of tax$— $76,296 $7,104 

The effective tax rates for discontinued operations, including the gain on sale of discontinued operations, were nil%, 4.4%, and 23.4% for the years ended December 31, 2020, 2019, and 2018, respectively. For the year ended December 31, 2019, there was minimal income tax obligation for the sale of KGS due to the efficient tax structure of the transaction. The GS effective tax rate for 2018 was positively impacted by the Tax Cut and Jobs Act (“TCJA”).
The accompanying Consolidated Statements of Cash Flows are presented on a combined basis (continuing operations and discontinued operations). The following table provides information for the total operating and investing cash flows for the GS segment (in thousands):
YEARS ENDED DECEMBER 31,
Cash Provided by (Used in)202020192018
GS Operating Activities$— $4,547 $10,937 
GS Investing Activities$— $117,798 $(927)