Income Taxes

The Income tax benefit from both continuing and discontinued operations was not material during the 2015. This is due primarily to continued losses from operations and the full valuation allowance against the Company's deferred tax assets, which is discussed further below. During 2014, the Company recorded an income tax benefit from continuing operations of approximately $1.7 million. The majority of this benefit relates to operating losses from continuing operations and the utilization of a portion of the Company's deferred tax assets to offset the income tax expense from discontinued operations. For 2014, the income tax expense from discontinued operations totaled approximately $2.0 million, arising primarily from the gain on the sale of StreetLinks, offset by the operating losses of Corvisa. The components of income tax benefit from continuing operations for 2015 and 2014 were as follows (dollars in thousands):



	For the Year Ended December 31,
	2015			2014
Current:
Federal	$	(13	)	$	(227	)
State and local	(15		)	3
Total current	(28		)	(224		)

Deferred:
Federal	—			(1,306		)
State and local	—			(192		)
Total deferred	—			(1,498		)
Total income tax benefit	$	(28	)	$	(1,722	)

A reconciliation of the expected federal income tax expense using the federal statutory tax rate of 35% to the Company’s actual income tax benefit and resulting effective tax rate for 2015 and 2014 were as follows (dollars in thousands):



	For the Year Ended December 31,
	2015			2014
Income tax at statutory rate	$	(977	)	$	(1,270	)
State income taxes, net of federal tax benefit	(96		)	(226		)
Valuation allowance	2,519			(2,740		)
Change in state tax rate	—			(85		)
State tax credits	488			—
Adjustment to deferred tax asset	(1,965		)	162
Expiration of loss carryforward	—			3,007
Uncertain tax positions	(87		)	(504		)
Other	90			(66		)
Total income tax benefit	$	(28	)	$	(1,722	)

Prior to 2014, the Company concluded that it was no longer more likely than not that it would realize a portion of its deferred tax assets. As such, the Company maintained a full valuation allowance against its deferred tax assets as of both December 31, 2015 and 2014.

The Company's determination of the realizable deferred tax assets requires the exercise of significant judgment, based in part on business plans and expectations about future outcomes. In the event the actual results differ from these estimates in future periods, the Company may need to adjust the valuation allowance, which could materially impact our financial position and results of operations. The Company will continue to assess the need for a valuation allowance in future periods. As of December 31, 2015 and 2014, the Company maintained a valuation allowance of $281.5 million and $268.6 million, respectively, for its deferred tax assets. During 2015, there was an increase in the valuation allowance of approximately $12.9 million, of which $2.5 million was attributable to continuing operations, while $10.4 million was attributable to discontinued operations.

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2015 and 2014 were as follows (dollars in thousands):



	December 31, 2015			December 31, 2014
Deferred tax assets:
Basis difference – investments	$	18,043		$	20,049
Federal net operating loss carryforwards	239,003			227,519
State net operating loss carryforwards	20,168			16,922
Other	4,882			5,102
Gross deferred tax asset	282,096			269,592
Valuation allowance	(281,548		)	(268,592		)
Deferred tax asset	548			1,000
Deferred tax liabilities:
Other	548			1,000
Deferred tax liability	548			1,000
Net deferred tax asset	$	—		$	—

As of December 31, 2015, the Company had a federal net operating loss of approximately $682.9 million. The federal net operating loss may be carried forward to offset future taxable income, subject to applicable provisions of the Internal Revenue Code (the "Code"). If not used, this net operating loss will expire in years 2025 through 2035. The Company has state net operating loss carryovers arising from both combined and separate filings from as early as 2004. The state net operating loss carryovers may expire as early as 2017 and as late as 2035.

The activity in the accrued liability for unrecognized tax benefits for the years ended December 31, 2015 and 2014 was as follows (dollars in thousands):



	For the Year Ended December 31,
	2015			2014
Beginning balance	$	475		$	731
Gross increases – tax positions in current period	19			300
Lapse of statute of limitations	(126		)	(556		)
Ending balance	$	368		$	475

As of December 31, 2015 and 2014, the total gross amount of unrecognized tax benefits was $0.4 million and $0.5 million, respectively, which also represents the total amount of unrecognized tax benefits that would impact the effective tax rate. The Company anticipates a reduction of unrecognized tax benefits of less than $0.1 million due the lapse of statute of limitations in the next twelve months. The Company does not expect any other significant change in the liability for unrecognized tax benefits in the next twelve months.

It is the Company’s policy to recognize interest and penalties related to income tax matters in income tax expense. The benefit for interest and penalties recorded in income tax expense was not significant for 2015 and 2014. There were accrued interest and penalties of less than $0.1 million as of both December 31, 2015 and 2014.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state and local jurisdictions. Tax years 2011 to 2015 remain open to examination for both U.S. federal income tax and major state tax jurisdictions.