Income Taxes

Income tax (benefit) expense for the years ended December 31, 2016, 2015, and 2014 consist of the following:



	2016			2015			2014
Current:
Federal	$	(22,416	)	$	(1,377	)	$	69,245
State	(64		)	(138		)	135
Total	(22,480		)	(1,515		)	69,380
Deferred:
Federal	29,796			2,261			35,314
State	(169		)	62			10,813
Total	29,627			2,323			46,127
Income tax expense	$	7,147		$	808		$	115,507

Total income tax expense (benefit) for the years ended December 31, 2016, 2015, and 2014 was allocated in the consolidated financial statements as follows:



	2016		2015			2014
Income tax expense	$	7,147	$	808		$	115,507
Income tax recorded in accumulated other comprehensive income (loss)
Income tax expense (benefit)	2,003		(300		)	(127		)
Total income tax expense	$	9,150	$	508		$	115,380

Income tax expense attributable to income from operations differed from the amount computed by applying the statutory federal income tax rate of 35% to pre-tax income or loss as a result of the following:



	2016			2015			2014
Tax at the statutory federal rate	$	8,065		$	(323	)	$	182,700
State income taxes (net of federal benefit)	806			(32		)	18,270
Decrease in valuation allowance	(941		)	(164		)	(86,882		)
Fees and expenses for SEC investigation	—			1,092			—
Other	(783		)	235			1,419
Total income tax expense	$	7,147		$	808		$	115,507

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities as of December 31, 2016 and 2015 are presented below:



	2016			2015
Deferred tax assets:
State net operating loss carryforwards	$	14,956		$	11,400
Alternative minimum tax credit carryforward	13,477			—
Impairment losses	63,108			112,143
Prepaid income from land sales	5,461			5,490
Other	—			1,358
Total gross deferred tax assets	97,002			130,391
Valuation allowance	(5,135		)	(6,012		)
Total net deferred tax assets	91,867			124,379
Deferred tax liabilities:
Investment in real estate and property and equipment basis differences	647			3,071
Deferred gain on land sales and involuntary conversions	28,920			28,691
Installment sales	127,260			126,741
Pension Plan assets transferred to the 401(k) Plan	2,170			2,723
Other	1,716			—
Total gross deferred tax liabilities	160,713			161,226
Net deferred tax liability	$	(68,846	)	$	(36,847	)

The Company had no federal net operating loss carryforwards at December 31, 2016 and 2015. The Company had a federal AMT credit carryforward of $13.5 million at December 31, 2016. The AMT credit carryforward is available indefinitely to offset future federal income tax liabilities. The Company had no federal AMT tax credit carryforward at December 31, 2015. At December 31, 2016 and 2015, the Company had state net operating loss carryforwards of $427.3 million and $325.7 million, respectively. The majority of state net operating losses are available to offset future taxable income through 2036.

In general, a valuation allowance is recorded if, based on the available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. Realization of the Company’s deferred tax assets is dependent upon the Company generating sufficient taxable income in future years in the appropriate tax jurisdictions to obtain a benefit from the reversal of deductible temporary differences and from loss carryforwards.

As of December 31, 2016 and 2015, management believed it had not met the requirements to realize the benefits for a portion of its deferred tax assets for state net operating loss carryforwards; therefore, the Company has maintained a valuation allowance of $5.1 million and $6.0 million, respectively, related to state net operating losses. During 2016, the Company decreased the valuation allowance by $0.9 million to $5.1 million.

The Company had approximately $1.7 million of total unrecognized tax benefits as of December 31, 2016 and 2015, respectively. Of this total, there are no amounts of unrecognized tax benefits that, if recognized, would affect the effective income tax rate. There were no decreases or increases related to prior year or current year tax positions.

There were no penalties required to be accrued at December 31, 2016 and 2015. The Company recognizes interest and/or penalties related to income tax matters in income tax expense.

The Company is currently open to examination by taxing authorities for the years ended December 31, 2013 through 2015. The IRS has completed the examination of the Company’s tax return for 2013 without adjustment.