FEDERAL AND STATE CURRENT AND DEFERRED INCOME TAX

As a result of the Tax Act, the Company remeasured its net deferred tax assets and corresponding valuation allowance using a federal rate of 21% during the year ended December 31, 2017, which resulted in no net impact to the income tax provision. The Company and its subsidiaries file a consolidated federal income tax return. Companies that are less than 80% owned corporations, or entities that are treated as partnerships for federal income tax purposes, file separate federal income tax returns. All of the Company’s pre-tax loss from continuing operations in each of the three years ended December 31, 2017, 2016 and 2015 was generated in the U.S. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The Company’s income tax (provision) benefit for federal and state income taxes consisted of the following (in thousands):



	Year Ended December 31,
	2017			2016			2015
Current tax (provision) benefit	$	360		$	(47	)	$	48
Deferred tax (provision) benefit	(3,442		)	1,182			2,913
Total income tax (provision) benefit	$	(3,082	)	$	1,135		$	2,961

The difference between income taxes provided at the Company’s federal statutory rate and effective tax rate was as follows (in thousands):



	Year Ended December 31,
	2017			2016			2015
Federal income tax (provision) benefit at statutory rate	$	(3,620	)	$	9,201		$	13,083
Change in valuation allowance	36,055			(7,664		)	(16,026		)
Impact of U.S. tax reform	(35,570		)
State taxes, net of federal benefit	319			225			280
Nondeductible compensation							(530		)
Equity in loss of unconsolidated affiliate							2,766
Research and development credit							2,248
Other	(266		)	(627		)	1,140
Total income tax (provision) benefit	$	(3,082	)	$	1,135		$	2,961

The significant components of deferred income tax assets and liabilities were as follows (in thousands):



	December 31,
	2017			2016
Deferred tax assets:
Net operating losses, capital losses, and tax credit carryforwards	$	55,852		$	67,838
Deferred compensation	1,212			10,908
Impairment loss on securities	36			1,221
Impairment loss on water assets	10,791			17,277
Impairment loss on real estate				1,847
Capitalized expenses				9,788
Employee benefits, including stock-based compensation	745			9,945
Excess tax basis in affiliate	5,743			7,676
Fixed assets	811			469
Other, net	1,011			3,528
Total deferred tax assets	76,201			130,497
Deferred tax liabilities:
Unrealized appreciation on securities	122			4,138
Revaluation of real estate and water assets	3,251			5,247
Excess book basis in affiliate				5,770
Other, net	520			2,113
Total deferred tax liabilities	3,893			17,268
Valuation allowance	(72,308		)	(113,229		)
Net deferred income tax asset	$	—		$	—

Deferred tax assets and liabilities and federal income tax expense in future years can be significantly affected by changes in circumstances that would influence management’s conclusions as to the ultimate realization of deferred tax assets. Valuation allowances are established and maintained for deferred tax assets on a “more likely than not” threshold. At December 31, 2011, the Company considered it more likely than not that the deferred tax assets would not be realized and a full valuation allowance was provided. At December 31, 2017, after evaluating the positive and negative evidence, management concluded to maintain a full valuation allowance against its deferred tax assets. The Company has considered the following possible sources of taxable income when assessing the realization of the deferred tax assets: (1) future reversals of existing taxable temporary differences; (2) taxable income in prior carryback years; (3) tax planning strategies; and (4) future taxable income exclusive of reversing temporary differences and carryforwards. Reliance on future U.S. taxable income as an indicator that a valuation allowance is not required is difficult when there is negative evidence such as the Company's cumulative losses in recent years. In considering the evidence as to whether a valuation allowance is needed, the existence, magnitude and duration of such cumulative losses are factors that are accorded significant weight in the Company's assessment. As a result, a determination was made that there was not sufficient positive evidence to enable the Company to conclude that it was “more likely than not” that certain of these deferred tax assets would be realized. Therefore, the Company has provided a full valuation allowance against the Company's net deferred tax assets balances as discussed above. This assessment will continue to be undertaken in the future. The Company's results of operations may be impacted in the future by the Company's inability to realize a tax benefit for future tax losses or for items that will generate additional deferred tax assets.

The Company's results of operations might be favorably impacted in the future by reversals of valuation allowances if the Company is able to demonstrate sufficient positive evidence that the Company's deferred tax assets will be realized.

The Company had operating loss carryforwards, federal tax credit carryforwards, and state capital loss carryforwards as of December 31, 2017, that will expire if not utilized. The following table summarizes such carryforwards and their expiration as follows (in thousands):



	Federal Net Operating Losses		Federal Tax Credits		State Net Operating Losses		State Capital Losses
Expire 2018 through 2020			$	2,751	$	14,161	$	8,500
Expire 2021 through 2025			782		6,819		5,655
Expire 2026 through 2030					17,009
Expire 2031 through 2037	$	185,494	3,970		136,730
Total	$	185,494	$	7,503	$	174,719	$	14,155

Utilization of the Company's U.S. federal and certain state net operating loss and tax credit carryovers may be subject to substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. Such an annual limitation could result in the expiration of the net operating loss carryforwards before utilization. As of December 31, 2017, the Company believes that utilization of its federal net operating losses and federal tax credits are not limited under any ownership change limitations provided under the Internal Revenue Code. The tax benefit preservation plan adopted during 2017, which is subject to ratification by the Company’s shareholders at the 2018 annual meeting, provides protections to preserve the Company’s ability to utilize its net operating loss carryforwards as a result of certain stock ownership changes in the future.

The Company is subject to taxation in the U.S. and various state jurisdictions. As of December 31, 2017, the Company's statute is open from 2014 and 2013 forward for federal and for state tax purposes, respectively.