Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our provision for income taxes consists of the following (in thousands):

	Year Ended December 31,
	2023		2022		2021
Current:
State and local	$	(50)	$	(103)	$	(120)
Federal	(1,816)		(350)		—
Income tax expense	$	(1,866)	$	(453)	$	(120)

During the years ended December 31, 2023, 2022 and 2021, we recorded benefit of $0.1 million, $0.0 million and $0.1 million, respectively, related to uncertain tax positions, as part of our income tax provision.

A reconciliation of our effective tax rate and the U.S. Federal statutory income tax rate is as follows:

	Year Ended December 31,
	2023		2022		2021
Taxes at statutory U.S. federal income tax rate	21.00	%	21.00	%	21.00	%
Dividends paid deduction and net operating loss utilization	(21.00)	%	(21.00)	%	(21.00)	%
Federal taxes	1.95	%	0.93	%	—	%
State and local income taxes	0.05	%	0.27	%	(0.74)	%
Effective tax rate	2.00	%	1.20	%	(0.74)	%

On November 30, 2023 and August 31, 2022, the Company completed internal restructurings intended to comply with Section 351 of the Internal Revenue Code. As a result, for the years ended December 31, 2023 and 2022, the Operating Trust recognized $200.0 million and $82.0 million taxable gains, respectively, for federal income tax purposes. The gains were distributed by the Company and have no impact on the Company’s provision for income taxes for the years ended December 31, 2023 and 2022.

At December 31, 2023 and 2022, we had federal net operating loss, or NOL, carryforwards of $29 million and $29 million, respectively. These amounts can be used to offset future taxable income, if any. The REIT will be entitled to utilize NOL carryforwards only to the extent that REIT taxable income exceeds our deduction for dividends paid. NOLs arising in taxable years ending before January 1, 2018 can generally be carried forward 20 years, with no carryforward limitation on NOLs generated after that date. NOL carryforwards of $18 million expire in 2037 and NOL carryforwards of $11 million never expire.