
	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2013		2012		2013		2012

Current Federal alternative minimum tax (“AMT”) expense	$	—	$	—	$	—	$	—
Deferred Federal tax expense (benefit)		268,000		(4,000)		406,000		—
Deferred state and local tax expense (benefit)		55,000		(1,000)		83,000		—


Consolidated income tax expense (benefit), including taxes attributable to discontinued operations (A)		323,000		(5,000)		489,000		—
Less income tax expense (benefit) attributable to discontinued operations		(24,000)		79,000		(123,000)		—

Income tax expense (benefit) (B)	$	347,000	$	(84,000)	$	612,000	$	—


(A) Includes income taxes attributable to income from discontinued operations.
(B) Reflects the tax expense from continuing operations as reported on the consolidated statements of operations for the periods presented.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The net deferred tax asset was approximately $9,133,000 and $9,622,000 at June 30, 2013 and December 31, 2012, respectively, of which $802,000 and $1,065,000 is reflected as a net current asset and $8,331,000 and $8,557,000 is reflected as a net non-current asset in the accompanying consolidated balance sheets, respectively. The significant portion of the deferred tax items primarily relates to: (1) NOL carryforwards; (2) Federal AMT credit carryforwards; (3) stock based compensation; and (4) liability reserves, all as they relate to deferred tax assets; and (5) the deferred tax liability resulting from the intangible assets recorded at the time of the Merger.

The Company has aggregate Federal, state and local NOL carryforwards aggregating approximately $67,994,000 at December 31, 2012. These NOLs include NOLs generated subsequent to the Merger, losses from Private Reis prior to the Merger, losses obtained from the Company’s 1998 merger with Value Property Trust (“VLP”) and the Company’s operating losses prior to the Merger. Approximately $27,259,000 of these Federal NOLs are subject to an annual limitation, whereas the remaining balance of approximately $40,735,000 is not subject to such a limitation. There is an annual limitation on the use of NOLs after an ownership change, pursuant to Section 382 of the Internal Revenue Code. As a result of the Merger, the Company experienced such an ownership change which resulted in a new annual limitation of $2,779,000. However, because of the accumulation of annual limitations, it is expected that the use of NOLs will not be limited by expiration. A substantial NOL was realized during the year ended December 31, 2012 as a result of the Gold Peak litigation settlement, discussed in Note 11.

A valuation allowance is required to reduce deferred tax assets if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Accordingly, management has determined that a valuation allowance of approximately $15,217,000 at June 30, 2013 and December 31, 2012, was necessary. The allowance relates primarily to NOL carryforwards and AMT credits. The Company will continue to evaluate the amount of valuation allowance on deferred tax assets during 2013 and in subsequent years based on such factors as historic profitability levels and forecasts of future taxable income.