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, 2019, 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 two years ended December 31, 2019 and 2018 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,
	2019		2018
Current tax (provision) benefit	$	—	$	(53	)
Deferred tax provision	—		—
Total income tax provision	$	—	$	(53	)

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,
	2019			2018
Federal income tax (provision) benefit at statutory rate	$	(2,421	)	$	697
Change in valuation allowance	3,038			529
State taxes, net of federal benefit	(6		)	—
Expired credits	(614		)	(1,056		)
Other	3			(223		)
Total income tax provision	$	—		$	(53	)

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



	December 31,
	2019			2018
Deferred tax assets:
Net operating losses, capital losses, and tax credit carryforwards	$	60,318		$	64,378
Impairment loss on water assets	10,384			10,313
Employee benefits, including stock-based compensation	682			928
Excess tax basis in affiliate	496			496
Fixed assets	739			798
Other, net	761			772
Total deferred tax assets	73,380			77,685
Deferred tax liabilities:
Revaluation of real estate and water assets	2,978			3,145
Other, net	508			503
Total deferred tax liabilities	3,486			3,648
Valuation allowance	(69,894		)	(74,037		)
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, 2019, after evaluating the positive and negative evidence, management concluded that there was insufficient 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, and the Company continued to maintain a full valuation allowance against its deferred tax assets. However, given the Company’s more recent earnings history, management believes that there is a reasonable possibility that within the next 12 months, sufficient positive evidence may become available to allow management to reach a conclusion that a portion of the valuation allowance will no longer be needed. Release of valuation allowance would result in the recognition of certain deferred tax assets with a corresponding decrease to income tax expense for the period the release is recorded. The exact timing and amount of the valuation allowance release will be predicated on the basis of the level of profitability that the Company is able to actually achieve, and demonstration of additional positive evidence such as reliable projections of future earnings.

The Company had net operating loss carryforwards, federal tax credit carryforwards, and state capital loss carryforwards as of December 31, 2019, 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 and Federal Capital Losses
Expire 2020	$—	$1,339	$9,508	$793
Expire 2021 through 2026	—	787	—	84,227
Expire 2027 through 2031	—	451	27,750	—
Expire 2032 through 2038	156,491	4,120	103,328	—
Total	$156,491	$6,697	$140,586	$85,020

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, 2019, 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 by the Company 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 does not have any uncertain tax benefits recorded for the years ended December 31, 2019 and 2018 . The Company’s policy is to recognize interest and penalties related to uncertain tax benefits in its provision for income taxes. For the years ended December 31, 2019 and 2018 the Company has not recorded any interest or penalties related to uncertain tax benefits.

The Company is subject to taxation in the U.S. and various state jurisdictions. As of December 31, 2019, the Company's statute is open from 2016 and 2015 forward for federal and for state tax purposes, respectively.