Income Taxes

6 Months Ended

Jun. 30, 2012

Income Taxes

Income Taxes

Note 9.  Income Taxes

We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, and are generally not subject to federal and state income taxes provided we distribute our taxable income to our shareholders and meet other requirements for qualifying as a REIT.  However, we are subject to certain state, local and Australian taxes without regard to our REIT status.  During the three and six months ended June 30, 2012, we recognized current state tax expense of $107 and $249, respectively.  In addition, during the three and six months ended June 30, 2012, we recognized a deferred tax (benefit) expense of ($15) and $335, respectively, related to basis differences in our Australian properties.  During the three and six months ended June 30, 2011, we recognized current tax expense of $499 and $765, respectively, which includes $312 and $476 of foreign taxes, respectively, and $187 and $289 of certain state taxes, respectively.  In addition, during the three and six months ended June 30, 2011, we recognized a deferred tax (benefit) of ($409) and ($329), respectively, related to basis differences in our Australian properties.  At June 30, 2012 and December 31, 2011, we had deferred tax assets of $3,610 and $1,992, respectively, of which $2,639 and $1,414, respectively, related to different carrying amounts for financial reporting and for Australian income tax purposes of our properties in Australia.  At June 30, 2012 and December 31, 2011, we had deferred tax liabilities of $3,170 and $1,214, respectively.  Because we are uncertain of our ability to realize the future benefit of certain Australian loss carry forwards, we have reduced our net deferred income tax assets by a valuation allowance of $590 and $165 as of June 30, 2012 and December 31, 2011, respectively.