Quarterly report pursuant to Section 13 or 15(d)

INCOME TAXES

v3.7.0.1
INCOME TAXES
6 Months Ended
Jun. 30, 2017
Income Tax Disclosure [Abstract]  
INCOME TAXES
INCOME TAXES

The provision for income taxes consists of the following:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
Current:
 
 
 
 
 
 
 
Federal
$
510

 
$
23

 
$
1,049

 
$
66

State and Local

 
9

 

 
20

Total Current Provision
$
510

 
$
32

 
$
1,049

 
$
86

Deferred:
 
 
 
 
 
 
 
Federal
$

 
$
91

 
$

 
$
82

State and Local

 
15

 

 
14

Total Deferred Benefit
$

 
$
106

 
$

 
$
96

 
 
 
 
 
 
 
 
Total Provision for Income Taxes
$
510

 
$
138

 
$
1,049

 
$
182


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 June 30, 2017 are presented below:
 
June 30, 2017
 
December 31, 2016
Deferred tax assets:
 
 
 
Allowance for loan losses
$
349

 
$
358

Depreciation and amortization
39,371

 
38,598

Accrued expenses
1,886

 
2,885

Interest
12,646

 
16,503

Net operating losses
161,248

 
162,629

Capital losses
5,429

 

Other
3,223

 
2,036

Total deferred tax assets
224,152

 
223,009

Less valuation allowance
(154,310
)
 
(133,192
)
Net deferred tax assets
$
69,842

 
$
89,817

Deferred tax liabilities:
 
 
 
Leaseholds
13,118

 
13,681

Cancellation of debt
56,724

 
75,632

Other

 
504

Total deferred tax liabilities
$
69,842

 
$
89,817

Net deferred tax assets
$

 
$



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 June 30, 2017 as management does not believe that it is more likely than not that the deferred tax assets will be realized.