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Income Taxes
9 Months Ended
Sep. 30, 2013
Income Tax Disclosure [Abstract]  
Income Taxes

12. Income Taxes

The Company recorded an income tax expense for continuing operations of $1.8 million for the nine months ended September 30, 2013. The tax expense for the nine months ended September 30, 2013 differs from the statutory rate of 34% primarily because of state income taxes.

The Company recorded an income tax benefit of $0.4 million for the nine months ended September 30, 2012. The tax benefit for the nine months ended September 30, 2012 differs from the statutory rate of 34% because of state income taxes.

The Company’s valuation allowance against its deferred tax assets was $0.7 million at September 30, 2013 and December 31, 2012. On a regular basis, the Company evaluates the recoverability of deferred tax assets and the need for a valuation allowance. Such evaluations involve the application of significant judgment. The Company considers multiple factors in its evaluation of the need for a valuation allowance. The Company’s long-term forecasts continue to support the realization of its deferred tax assets. The Company’s domestic deferred tax assets have a ratable reversal pattern over 15 years. The carryforward rules allow for up to a 20 year carryforward of net operating losses (“NOL”) to future income that is available to realize the deferred tax assets. The combination of the deferred tax asset reversal pattern and carryforward period yields a 27.5 year average period over which future income can be utilized to realize the deferred tax assets.

The Company’s gross unrecognized tax benefit was $1.4 million both at September 30, 2013 and December 31, 2012. The Company does not expect any of the potential benefits will be settled within the next twelve months. The Company is unaware of any positions for which it is reasonably possible that the unrecognized tax benefits will significantly increase or decrease within the next twelve months.

The Company files a consolidated federal income tax return, income tax returns with various states, and foreign income tax returns in various foreign jurisdictions. The Company’s federal and state income tax years, with limited exceptions, are closed through 2007.

The Company recorded a tax gain of $0.7 million related to the sale of PCTEL Secure assets in April 2013. The income tax gain was based on the fair market value of the intangible assets sold minus the tax basis of the intangible assets.

The Company has no plans to repatriate foreign income from its subsidiaries. The Company has not provided deferred U.S. income taxes and foreign withholding taxes on approximately $1.0 million of undistributed cumulative earnings of foreign subsidiaries because the Company considers such earnings to be permanently reinvested in those operations.