Pre-tax income from continuing operations (including equity method investment earnings) consisted of the following:

	2021			2020			2019
Current
Federal	$	232.6		$	188.2		$	125.4
State		31.8			25.5			22.6
Foreign		15.3			9.5			21.6
		279.7			223.2			169.6
Deferred
Federal		(63.5	)		37.6			40.1
State		(26.1	)		(62.3	)		19.0
Foreign		3.7			2.8			(9.9	)
		(85.9	)		(21.9	)		49.2
	$	193.8		$	201.3		$	218.8

Income taxes computed by applying the U.S. Federal statutory rates to income from continuing operations before income taxes are reconciled to the provision for income taxes set forth in the Consolidated Statements of Earnings as follows:

	2021			2020			2019
Computed U.S. Federal income taxes	$	313.9		$	219.0		$	188.8
State income taxes, net of U.S. Federal tax impact		37.4			29.6			34.1
Goodwill and intangible impairments		13.6			11.2			12.5
Remeasurement of deferred taxes due to legal entity reorganization		35.8			(40.9	)		16.9
State tax impact of combining Pinnacle business		—			—			(12.0	)
Change of valuation allowance on capital loss carryforward		(188.5	)		—			(32.2	)
Other		(18.4	)		(17.6	)		10.7
	$	193.8		$	201.3		$	218.8

Income taxes paid, net of refunds, were $286.3 million, $178.0 million, and $133.8 million in fiscal 2021, 2020, and 2019, respectively.

The tax effect of temporary differences and carryforwards that give rise to significant portions of deferred tax assets and liabilities consisted of the following:

	May 30, 2021					May 31, 2020
	Assets			Liabilities		Assets			Liabilities
Property, plant and equipment	$	—		$	281.7	$	—		$	258.4
Inventory		19.5			—		19.5			—
Goodwill, trademarks and other intangible assets		—			1,118.4		—			1,108.4
Right-of-use assets		—			45.5		—			51.0
Accrued expenses		12.0			—		13.4			—
Compensation related liabilities		36.5			—		36.3			—
Pension and other postretirement benefits		—			9.8		35.2			—
Investment in unconsolidated subsidiaries		—			2.6		—			196.2
Lease liabilities		54.4			—		61.3			—
Other liabilities that will give rise to future tax deductions		96.2			—		88.1			—
Net capital and operating loss carryforwards		53.8			—		753.4			—
Federal credits		16.1			—		17.5			—
Other		33.9			33.1		52.7			31.8
		322.4			1,491.1		1,077.4			1,645.8
Less: Valuation allowance		(67.5	)		—		(728.3	)		—
Net deferred taxes	$	254.9		$	1,491.1	$	349.1		$	1,645.8

The liability for gross unrecognized tax benefits at May 30, 2021 was $33.0 million, excluding a related liability of $8.8 million for gross interest and penalties. Included in the balance at May 30, 2021 are $0.8 million of tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period. Any associated interest and penalties imposed would affect the tax rate. As of May 31, 2020, our gross liability for unrecognized tax benefits was $35.8 million, excluding a related liability of $7.4 million for gross interest and penalties. Interest and penalties recognized in the Consolidated Statements of Earnings was an expense of $1.4 million in fiscal 2021, a benefit of $4.3 million in fiscal 2020, and an expense of $1.2 million in fiscal 2019.

The net amount of unrecognized tax benefits at May 30, 2021 and May 31, 2020 that, if recognized, would favorably impact our effective tax rate was $28.2 million and $30.3 million, respectively.

We accrue interest and penalties associated with uncertain tax positions as part of income tax expense.

We conduct business and file tax returns in numerous countries, states, and local jurisdictions. The U.S. Internal Revenue Service ("IRS") has completed its audit of the Company for tax years through fiscal 2020. All resulting significant items for fiscal 2020 and prior years have been settled with the IRS, with the exception of fiscal 2016. Statutes of limitation for pre-acquisition tax years of Pinnacle generally remain open for calendar year 2003 and subsequent years principally related to net operating losses. Other major jurisdictions where we conduct business generally have statutes of limitations ranging from three to five years.

We estimate that it is reasonably possible that the amount of gross unrecognized tax benefits will decrease by up to $13.2 million over the next twelve months due to various federal, state, and foreign audit settlements and the expiration of statutes of limitations.

The change in the unrecognized tax benefits for the year ended May 30, 2021 was:

We have approximately $13.3 million of foreign net operating loss carryforwards ($9.8 million will expire between fiscal 2022 and 2042 and $3.5 million have no expiration dates) and $106.8 million of federal net operating loss carryforwards which expire between fiscal 2022 and 2027. Included in net deferred tax liabilities are $30.7 million of tax effected state net operating loss carryforwards which expire in various years ranging from fiscal 2022 to 2040 and $3.8 million of tax effected state capital loss balances that expire in fiscal year 2031. Foreign tax credits of $14.3 million will expire between fiscal 2025 and 2031. State tax credits of approximately $5.2 million will expire in various years ranging from fiscal 2023 to 2028.

Federal capital loss carryforwards related to the Private Brands divestiture of approximately $1.9 billion expired at the end of fiscal 2021. Accordingly, we have removed the deferred tax asset and the related valuation allowance from our balance sheet. Tax effected state capital loss carryforwards related to the Private Brands divestiture of approximately $91.9 million also expired at the end of fiscal 2021 and were removed from the balance sheet, including the related valuation allowance.

In fiscal 2021, we completed a restructuring of our ownership interest in Ardent Mills that utilized a portion of our capital loss carryforward prior to its expiration. Also in fiscal 2021, we completed several other transactions related to retained assets in conjunction with the divestiture of the Peter Pan^® peanut butter and Egg Beaters^® businesses that we believe will utilize a portion of the remaining capital loss carryforward. These transactions are subject to certain elections and are currently under review by the Internal Revenue Service. We believe they may result in increases to the tax basis in those assets and if successful would result in tax benefits being realized in future periods.

We have recognized a valuation allowance for the portion of the net operating loss carryforwards, capital loss carryforwards, tax credit carryforwards, and other deferred tax assets we believe are not more likely than not to be realized. The net change in the valuation allowance for fiscal 2021 was a decrease of $653.9 million. For fiscal 2020 and 2019, changes in the valuation allowance were a decrease of $9.8 million and $1.5 million, respectively. The current year change principally relates to decreases in the valuation allowances on the capital loss carryforward generated from the sale of our Private Brands operations. Valuation allowances were released on capital losses that were utilized against capital gains generated on the divestures of the Peter Pan^® peanut butter and Egg Beaters^® businesses and the restructuring of our ownership interest in Ardent Mills. Valuation allowances were also removed on the Federal and state capital losses that expired at the end of fiscal 2021.

We believe that our foreign subsidiaries have invested or will invest any undistributed earnings indefinitely, or the earnings will be remitted in a tax-neutral transaction, and, therefore, do not provide deferred taxes on the cumulative undistributed earnings of our foreign subsidiaries.