Drive Shack Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

INCOME TAXES

INCOME TAXES

6 Months Ended

Jun. 30, 2016

The provision for income taxes consists of the following:



	Three Months Ended June 30,					Six Months Ended June 30,
	2016		2015			2016		2015
Current:
Federal	$	23	$	34		$	66	$	80
State and Local	9		8			20		20
Total Current Provision	$	32	$	42		$	86	$	100
Deferred:
Federal	$	91	$	(13	)	$	82	$	(23	)
State and Local	15		(2		)	14		(4		)
Total Deferred Provision (Benefit)	$	106	$	(15	)	$	96	$	(27	)

Total Provision for Income Taxes	$	138	$	27		$	182	$	73
Provision for income taxes from continuing operations	$	138	$	27		$	182	$	73

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, 2016 are presented below:



	June 30, 2016			December 31, 2015
Deferred tax assets:
Allowance for loan losses	$	372		$	399
Depreciation and amortization	34,592			33,495
Accrued expenses	1,325			2,008
Net operating losses	27,482			22,524
Total deferred tax assets	63,771			58,426
Less valuation allowance	(48,194		)	(42,158		)
Net deferred tax assets	$	15,577		$	16,268
Deferred tax liabilities:
Leaseholds	14,515			15,366
Other	1,062			805
Total deferred tax liabilities	$	15,577		$	16,171
Net deferred income tax assets (A)	$	—		$	97


(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.

Newcastle recorded a valuation allowance against its deferred tax assets as of June 30, 2016 as management does not believe that it is more likely than not that the deferred tax assets will be realized.