14. Income Taxes

Income tax expense (benefit) consist of the following:


	Year Ended December 31,
	2019		2018		2017
Current:
Federal	$	1,070	$	4,305	$	7,418
State		—		—		48
Total		1,070		4,305		7,466
Deferred:
Federal		5,903		488		(23,512)
State		2,474		(5,529)		(1,835)
Total		8,377		(5,041)		(25,347)
Income tax expense (benefit)	$	9,447	$	(736)	$	(17,881)

Total income tax expense (benefit) was allocated in the consolidated financial statements as follows:


	Year Ended December 31,
	2019		2018		2017
Income tax expense (benefit)	$	9,447	$	(736)	$	(17,881)
Income tax recorded in accumulated other comprehensive loss
Income tax expense (benefit)		116		685		(2,488)
Total income tax expense (benefit)	$	9,563	$	(51)	$	(20,369)

Income tax expense (benefit) attributable to income from operations differed from the amount computed by applying the statutory federal income tax rate of 21% as of December 31, 2019 and 2018 and 35% as of December 31, 2017 to pre-tax income or loss as a result of the following:


	Year Ended December 31,
	2019		2018		2017
Tax at the statutory federal rate	$	7,607	$	6,643	$	14,594
State income taxes (net of federal benefit)		1,477		1,392		1,340
Decrease in valuation allowance, net		—		(4,993)		(142)
Decrease in uncertain tax positions		—		(2,165)		—
Change in US and State tax rates		1,006		(1,035)		(33,542)
Benefit of Qualified Opportunity Zone investment		(561)		—		—
Dividend received deduction		(188)		(322)		(530)
Other permanent items		106		(256)		399
Total income tax expense (benefit)	$	9,447	$	(736)	$	(17,881)

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities are presented below:


	December 31,		December 31,
	2019		2018
Deferred tax assets:
State net operating loss carryforwards	$	14,316	$	15,709
Impairment losses		36,751		38,907
Prepaid income from land sales		3,180		2,597
Capitalized costs		2,468		2,107
Reserves and accruals		1,672		1,789
Unrealized losses on investments		2,282		1,008
Other		765		711
Total gross deferred tax assets		61,434		62,828
Deferred tax liabilities:
Investment in real estate and property and equipment basis differences		4,000		2,358
Deferred gain on land sales and involuntary conversions		24,956		19,236
Installment sales		83,275		83,268
Pension Plan assets transferred to the 401(k) plan		580		872
Other		1,431		1,409
Total gross deferred tax liabilities		114,242		107,143
Net deferred tax liabilities	$	(52,808)	$	(44,315)

As of December 31, 2019 and 2018, the Company had state net operating loss carryforwards of $341.4 million and $357.0 million, respectively and no federal net operating loss carryforwards. The majority of state net operating losses are available to offset future taxable income through 2036 and will begin expiring in 2029. As of December 31, 2017, the Company had a federal income tax receivable of $8.4 million related to the reclassification of a U.S. federal AMT credit carryforward following the enactment of the Tax Act in December 2017, which is refundable to the Company in the years 2018 through 2021. During the year ended December 31, 2018, the U.S. federal AMT credit receivable decreased $4.5 million to $3.9 million due to the utilization in 2018. During the year ended December 31, 2019 the U.S. federal AMT credit receivable decreased $1.1 million to $2.8 million due to the expected utilization in 2019.

The Tax Act was enacted on December 22, 2017, and changed many aspects of U.S. corporate income taxation including reducing the U.S. federal corporate tax rate from 35% to 21% for tax years beginning after December 31, 2017. The Company recognized the tax effects of the Tax Act during the year ended December 31, 2017, which included a $33.5 million income tax benefit from the reassessment of net deferred tax balances to reflect the newly enacted tax rate.

On September 12, 2019, the Florida Department of Revenue announced that the corporate income tax rate for tax years 2019, 2020, and 2021 was reduced from 5.5% to 4.458%. As a result, the Company has recorded $1.0 million of income tax expense during 2019 to adjust its deferred tax balances due to the impact on the Company’s existing Florida net operating loss carried forward in addition to other temporary differences.

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. In 2018, the Company reassessed its need for a valuation allowance by evaluating all available evidence, including but not limited to historical and projected pre-tax profits. Based on this assessment the Company determined it had the ability to fully realize the future benefit of its net operating loss carryforward and released the valuation allowance in full resulting in a $5.0 million tax benefit in 2018.

Significant judgment is required in evaluating the Company's uncertain tax positions and determining its provision for income taxes. The Company regularly assesses the likelihood of adverse outcomes resulting from potential examinations to determine the adequacy of its provision for income taxes and applies a “more-likely-than-not” in determining the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company has not identified any unrecognized tax benefits as of December 31, 2019 and 2018. The Company had approximately $2.1 million of total unrecognized tax benefits as of December 31, 2017. During 2018, the Company recognized a $2.1 million income tax benefit due to the expiration of the statute of limitations for the tax year covering the previously unrecognized tax benefits. There were no penalties required to be accrued as of December 31, 2019 and 2018. The Company records interest related to unrecognized tax benefits, if any, in interest expense and penalties in other income, net.

The Company is currently open to examination by taxing authorities for the years ended December 31, 2016 through 2018. The IRS has completed a limited scope review of the Company’s tax returns for 2016 without adjustment.