Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

20. Income Taxes

For the years ended December 31, 2023, 2022 and 2021, the Company qualified to be taxed as a REIT under the Internal Revenue Code for U.S. federal income tax purposes. As long as the Company qualifies as a REIT, the Company generally will not be subject to U.S. federal income taxes on its taxable income to the extent it annually distributes at least 100% of its taxable income to stockholders and does not engage in prohibited transactions. Certain activities the Company performs may produce income that will not be qualifying income for REIT purposes. The Company has designated its TRSs to engage in these activities. The tables below reflect the taxes accrued at the TRS level and the tax attributes included in the consolidated financial statements.

The income tax provision for the years ended December 31, 2023, 2022 and 2021, respectively, is comprised of the following components (dollar amounts in thousands):

	For the Years Ended December 31,
	2023		2022		2021
Current income tax provision
Federal	$	23	$	2,355	$	280
State	273		862		5
Total current income tax provision	296		3,217		285
Deferred income tax (benefit) provision
Federal	(136)		(1,649)		1,339
State	(85)		(1,026)		834
Total deferred income tax (benefit) provision	(221)		(2,675)		2,173
Total income tax provision	$	75	$	542	$	2,458

The Company’s estimated taxable income differs from the statutory U.S. federal rate as a result of state and local taxes, non-taxable REIT income, valuation allowance and other differences. A reconciliation of the statutory income tax provision to the effective income tax provision for the years ended December 31, 2023, 2022 and 2021, respectively, are as follows (dollar amounts in thousands).

	For the Years Ended December 31,
	2023				2022				2021
(Benefit) provision at statutory rate	$	(10,204)	21.0	%	$	(71,422)	21.0	%	$	41,088	21.0	%
Non-taxable REIT loss (income)	6,901		(14.2)		64,479		(19.0)		(36,691)		(18.8)
State and local tax provision (benefit)	296		(0.6)		(78)		—		825		0.4
Other	(3,366)		6.9		(6,057)		1.8		225		0.1
Valuation allowance	6,448		(13.3)		13,620		(4.0)		(2,989)		(1.5)
Total provision	$	75	(0.2)	%	$	542	(0.2)	%	$	2,458	1.2	%

Deferred Tax Assets and Liabilities

The major sources of temporary differences included in the deferred tax assets (liabilities) and their deferred tax effect as of December 31, 2023 and 2022, respectively, are as follows (dollar amounts in thousands):

	December 31, 2023		December 31, 2022
Deferred tax assets
Net operating loss carryforward	$	7,128	$	3,513
Capital loss carryover	19,597		16,045
GAAP/Tax basis differences	2,989		1,869
Deferred tax assets	29,714		21,427
Less: Valuation allowance	(25,204)		(18,756)
Net deferred tax assets (1)	4,510		2,671
Deferred tax liabilities
GAAP/Tax basis differences	2,012		394
Deferred tax liabilities (2)	2,012		394
Total net deferred tax asset	$	2,498	$	2,277

(1)Included in other assets in the accompanying consolidated balance sheets.

(2)Included in other liabilities in the accompanying consolidated balance sheets.

As of December 31, 2023, the Company, through wholly owned TRSs, had incurred net operating losses in the aggregate amount of approximately $20.9 million. The Company’s carryforward net operating losses can be carried forward indefinitely until they are offset by future taxable income. Additionally, as of December 31, 2023, the Company, through its wholly-owned TRSs, had also incurred approximately $57.5 million in capital losses. The Company’s carryforward capital losses will expire between 2025 and 2028 if they are not offset by future capital gains.

As of December 31, 2023, the Company has recorded a valuation allowance against certain deferred tax assets as management does not believe that it is more likely than not that these deferred tax assets will be realized. The change in the valuation for the current year is an increase of approximately $6.4 million. We will continue to monitor positive and negative evidence related to the utilization of the remaining deferred tax assets for which a valuation allowance continues to be provided.

The Company files income tax returns with the U.S. federal government and various state and local jurisdictions. The Company’s federal, state and city income tax returns are subject to examination by the Internal Revenue Service and related tax authorities generally for three years after they were filed. The Company has assessed its tax positions for all open years and concluded that there are no material uncertainties to be recognized.

Based on the Company’s evaluation, the Company has concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements. To the extent that the Company incurs interest and accrued penalties in connection with its tax obligations, including expenses related to the Company’s evaluation of unrecognized tax positions, such amounts will be included in income tax expense.