Income Taxes

6 Months Ended

Jun. 30, 2021

Income Taxes

Income Taxes

12. INCOME TAXES:

The Company has elected to be taxed as a REIT effective January 1, 2013, pursuant to the U.S. Internal Revenue Code of 1986, as amended. As a REIT, generally the Company will not be subject to federal corporate income taxes on ordinary taxable income and capital gains income from real estate investments that it distributes to its stockholders. The Company will continue to be required to pay federal and state corporate income taxes on earnings of its taxable REIT subsidiaries (“TRSs”).

For the three months ended June 30, 2021 and 2020, the Company recorded an income tax provision of $1.6 million and $0.2 million, respectively. For the six months ended June 30, 2021 and 2020, the Company recorded an income tax provision of $5.6 million and $27.0 million, respectively. The income tax provision for the six months ended June 30, 2021 and 2020 included the recording of a valuation allowance of $3.6 million and $26.7 million, respectively, as further described below. Additionally, in the six months ended June 30, 2021 and 2020, the Company recorded an income tax provision of $2.0 million and $0.2 million, respectively, inclusive of valuation allowance, related to the current period operations of the Company.

Due to the financial statement impact of the COVID-19 pandemic, in connection with the preparation of the condensed consolidated financial statements included herein, the Company reassessed the realizability of net deferred tax assets during 2020, and as a result, the Company included a valuation allowance of $26.7 million in its income tax provision for the six months ended June 30, 2020 on the net deferred tax assets of its TRSs. After further analysis, the Company identified the need for an additional valuation allowance related to the deferred tax assets in 2020 of $3.6 million, which is included in the income tax provision for the six months ended June 30, 2021.

At June 30, 2021 and December 31, 2020, the Company had no unrecognized tax benefits.