Income Taxes

9 Months Ended

Sep. 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 nine months ended September 30, 2012, we recognized current state tax expense of $130 and $379, respectively.  In addition, during the three and nine months ended September 30, 2012, we recognized deferred tax expense of $1,192 and $1,527, respectively, related to basis differences in our Australian properties.  During the three and nine months ended September 30, 2011, we recognized current tax expense of $206 and $971, respectively, which includes $88 and $564 of foreign taxes, respectively, and $118 and $407 of certain state taxes, respectively.  In addition, during the three and nine months ended September 30, 2011, we recognized a deferred tax provision of $101 and a deferred tax benefit of $228, respectively, related to basis differences in our Australian properties.  At September 30, 2012 and December 31, 2011, we had deferred tax assets of $3,006 and $1,992, respectively, of which $2,328 and $1,414, respectively, related to different carrying amounts for financial reporting and for Australian income tax purposes of our properties in Australia.  At September 30, 2012 and December 31, 2011, we had deferred tax liabilities of $3,601 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 $598 and $165 as of September 30, 2012 and December 31, 2011, respectively.