In the first quarter of fiscal 2021 and 2020 we recognized income tax expense of $86.7 million and an income tax benefit of $11.5 million, respectively. The effective tax rate (calculated as the ratio of income tax expense to pre-tax income, inclusive of equity method investment earnings) was 20.8% and (7.0)% for the first quarter of fiscal 2021 and 2020, respectively.

The effective tax rate in the first quarter of fiscal 2021 reflected a benefit resulting from the regulations issued by the U.S. Treasury and Internal Revenue Service on certain provisions of the 2017 Tax Cuts and Jobs Act.

The effective tax rate in the first quarter of fiscal 2020 reflected the following:

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additional tax expense associated with non-deductible goodwill in our DSD Snacks and private label peanut butter businesses, for which an impairment charge was recognized,

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a tax benefit resulting from state law changes,

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a benefit from the settlement of tax issues that were previously reserved,

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an additional benefit due to a change in the deferred state tax rates relating to the integration of Pinnacle activity for tax purposes, and

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an income tax benefit associated with a tax planning strategy that will allow us to utilize certain state tax attributes.

The amount of gross unrecognized tax benefits for uncertain tax positions was $34.4 million as of August 30, 2020 and $35.8 million as of May 31, 2020. Included in those amounts was $0.8 million and $0.7 million, respectively, for tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The gross unrecognized tax benefits excluded related liabilities for gross interest and penalties of $8.1 million and $7.4 million as of August 30, 2020 and May 31, 2020, respectively.

The net amount of unrecognized tax benefits at August 30, 2020 and May 31, 2020 that, if recognized, would impact the Company's effective tax rate was $29.1 million and $30.3 million, respectively. Included in those amounts is $6.5 million that would be reported in discontinued operations. Recognition of these tax benefits would have a favorable impact on the Company's effective tax rate.

We estimate that it is reasonably possible that the amount of gross unrecognized tax benefits will decrease by up to $13.5 million over the next twelve months due to various federal, state, and foreign audit settlements and the expiration of statutes of limitations.

As of August 30, 2020 and May 31, 2020, we had a deferred tax asset of $685.3 million and $685.2 million, respectively, that was generated from the capital loss realized on the sale of the Private Brands operations with corresponding valuation allowances of $685.3 million and $685.2 million, respectively, to reflect the uncertainty regarding the ultimate realization of the tax asset. Federal capital loss carryforwards related to the Private Brands divestiture will expire in fiscal 2021.

We have not provided any deferred taxes on undistributed earnings of our foreign subsidiaries. Deferred taxes will be provided for earnings of non-U.S. affiliates and associated companies when we determine that such earnings are no longer indefinitely reinvested and will result in a tax liability upon distribution.