Quarterly report pursuant to Section 13 or 15(d)

INCOME TAXES

v3.7.0.1
INCOME TAXES
3 Months Ended
Mar. 31, 2017
Income Tax Disclosure [Abstract]  
INCOME TAXES
INCOME TAXES

The provision for income taxes consists of the following:
 
 
Three Months Ended March 31,
 
 
2017
 
2016
Current:
 
 
 
 
Federal
 
$
539

 
$
43

State and Local
 

 
11

Total Current Provision
 
$
539

 
$
54

Deferred:
 
 
 
 
Federal
 
$

 
$
(9
)
State and Local
 

 
(1
)
Total Deferred Benefit
 
$

 
$
(10
)
 
 
 
 
 
Total Provision for Income Taxes
 
$
539

 
$
44


On February 23, 2017, the Company revoked its election to be treated as a REIT effective January 1, 2017. The Company operated in a manner intended to qualify as a REIT for federal income tax purposes through December 31, 2016. The change in tax status has had no effect on the Company’s Consolidated Financial Statements as the corresponding net deferred tax asset created as a result of the tax status change has been fully offset with a valuation allowance.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of March 31, 2017 are presented below:
 
March 31, 2017
 
December 31, 2016
Deferred tax assets:
 
 
 
Allowance for loan losses
$
391

 
$
358

Depreciation and amortization
39,039

 
38,598

Accrued expenses
1,764

 
2,885

Interest
13,234

 
16,503

Net operating losses
176,821

 
162,629

Other
2,094

 
2,036

Total deferred tax assets
233,343

 
223,009

Less valuation allowance
(153,541
)
 
(133,192
)
Net deferred tax assets
$
79,802

 
$
89,817

Deferred tax liabilities:
 
 
 
Leaseholds
13,529

 
13,681

Cancellation of debt
66,178

 
75,632

Other
95

 
504

Total deferred tax liabilities
$
79,802

 
$
89,817

Net deferred tax assets (A)
$

 
$

(A)
Recorded in receivables and other assets on the Consolidated Balance Sheets.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible.

The Company recorded a valuation allowance against its deferred tax assets as of March 31, 2017 as management does not believe that it is more likely than not that the deferred tax assets will be realized.