Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Tax Disclosure

Income Taxes

The Company is subject to income tax laws of the various jurisdictions in which it operates, including U.S. federal, state and local non-U.S. jurisdictions, primarily in Europe. The Company’s current primary sources of income subject to tax are income from its hotel investments, certain PE Investments, and real estate and loan investments in Europe.

The following table provides a summary of the Company’s tax provisions (dollars in thousands):

	Year Ended December 31,
	2020		2019		2018
Current
Federal	$	13,125	$	(6,316)	$	(7,534)
State and local	(1,730)		(1,824)		(583)
Foreign	(669)		316		(588)
Total current tax benefit (expense)	10,726		(7,824)		(8,705)
Deferred
Federal	(808)		2,226		(27,817)
Foreign	980		2,426		(537)
Total deferred tax benefit (expense)	172		4,652		(28,354)
Total income tax benefit (expense)	$	10,898	$	(3,172)	$	(37,059)

Deferred Income Tax Assets and Liabilities

Deferred tax asset is included in other assets while deferred tax liability is included in accrued and other liabilities on the consolidated balance sheets.

The components of deferred tax assets and deferred tax liabilities arising from temporary differences are as follows (dollars in thousands):

	December 31,
	2020		2019
Deferred tax assets
Basis difference - investment in partnerships	$	27,394	$	40,626
Disallowed interest expense carry forwards	524		524
Net operating and capital loss carry forwards(1)	3,249		9,910
Other	—		746
Gross deferred tax asset	31,167		51,806
Valuation allowance	(29,212)		(49,244)
Deferred tax assets, net of valuation allowance	$	1,955	$	2,562
Deferred tax liabilities
Basis difference - real estate	(31,282)		(31,463)
Other	(201)		—
Gross deferred tax liabilities	(31,483)		(31,463)
Net deferred tax liability	$	(29,528)	$	(28,901)

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(1)    As of December 31, 2020 and 2019, deferred tax asset was recognized on net operating losses of $6.9 million and $27.1 million, respectively. Net operating losses attributable to U.S. federal and state income taxes, where applicable, generally begin to expire in 2034, or can be carried forward indefinitely.

Effective Income Tax

The Company’s income tax expense varied from the amount computed by applying the statutory income tax rate to income before income taxes. A reconciliation of the statutory U.S. income tax to the Company’s effective income tax is presented as follows (dollars in thousands):

	Year Ended December 31,
	2020		2019		2018
Pre-tax income (loss) attributable to taxable entities	$	(15,652)	$	(1,316)	$	(39,843)
Federal tax expense (benefit) at statutory tax rate (21%, 21% and 21%, respectively)	(3,287)		(276)		(8,367)
State and local taxes, net of federal income tax expense (benefit)	34		71		(644)
Permanent adjustments	(116)		10		41
Adjustments for foreclosure property	1,030		2,840		—
Foreign income tax differential	(172)		(1,328)		24
Foreign income tax rate change	—		(1,383)		—
Return to provision	1,364		(273)		—
Valuation allowance, net	(6,095)		2,402		43,078
Tax rate benefit of capital loss carryback	(3,058)		—		—
Revaluation of deferred taxes due to “Tax Cuts and Jobs Act”	—		—		1,725
Other	(598)		1,109		1,202
Income tax (benefit) expense	$	(10,898)	$	3,172	$	37,059

Tax Examinations and Uncertainty in Income Tax

The Company is no longer subject to U.S. federal, state and local tax examinations by tax authorities for years prior to 2017. There were no material uncertain tax positions as of December 31, 2020. For the years ended December 31, 2020, 2019 and 2018, the Company has not recognized any interest or penalties related to uncertain tax positions.