Income Taxes (Notes)

12 Months Ended

Dec. 31, 2019

We elected to be taxed as a REIT and operate in a manner that allows us to qualify as a REIT, for federal income tax purposes commencing with our taxable year ending December 31, 2011. As a REIT, we are generally not subject to corporate level income tax on the earnings distributed currently to our stockholders that we derive from our REIT qualifying activities. Taxable income from non-REIT activities managed through our TRS is subject to federal and state income taxes.

We lease our hotel property to a wholly owned TRS that is subject to federal and state income taxes. We account for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between GAAP carrying amounts and their respective tax bases. Additionally, we classify certain state taxes as income taxes for financial reporting purposes in accordance with ASC Topic 740, Income Taxes.

A deferred tax liability is included in our consolidated balance sheets of $0.3 million and $0.1 million as of December 31, 2019 and 2018, respectively, in relation to real estate asset basis differences and prepaid expenses for our TRS.

The income tax provision included in other income (expense) on the consolidated statement of income is as follows (in thousands):



	Year Ended December 31,
	2019			2018			2017
Current:
Federal	$	48		$	60		$	—
State	625			465			422
Deferred:
Federal	$	237		$	(6	)	$	—
State	(91		)	(192		)	(208		)
Provision for income taxes	$	819		$	327		$	214