9. FEDERAL INCOME TAXES

We recognize future tax assets and liabilities for each tax jurisdiction based on the difference between the financial reporting and tax bases of assets and liabilities using the enacted tax rates expected to be in effect when the taxes are paid or recovered. A valuation allowance is provided against net future tax assets for which we do consider the realization of such assets to meet the required "more likely than not" standard.

Our future tax assets and liabilities at December 31, 2013 and 2012 include the following components:

	December 31,

	2013			2012
Deferred tax assets:
Non-Current:
Net operating loss carryforwards	$	63,539,000		$	58,720,000
Mineral properties		14,153,000			12,230,000
Equipment & Furniture		127,000			—
Restoration Reserves		1,303,000			(2,681,000	)
Derivatives		37,000			—


Deferred tax assets		79,159,000			68,269,000
Valuation allowance		(78,544,000	)		(67,975,000	)


Net	$	615,000		$	294,000


Deferred tax liabilities:
Current:
Prepaids and other	$	50,000		$	—


		50,000			—


Non-Current:
Equipment & Furniture		(665,000	)		(294,000	)


		(665,000	)		(294,000	)


Deferred tax liabilities		(615,000	)		(294,000	)


Net deferred tax asset (liability)	$	—		$	—

The composition of our valuation allowance by tax jurisdiction is summarized as follows:

	December 31,

	2013		2012
United States	$	78,544,000	$	67,975,000
Other Countries		—		—


Total valuation allowance	$	78,544,000	$	67,975,000

The valuation allowance increased $9.3 million from the year ended December 31, 2012 to the year ended December 31, 2013. This was the result of an increase in the net deferred tax assets, primarily net operating loss carryforwards ("NOLs"), equity based compensation, and exploration spending on mineral properties. Because we are unable to determine whether it is more likely than not that the net deferred tax assets will be realized, we continue to record a 100% valuation against the net deferred tax assets.

At December 31, 2013, we had U.S. net operating loss carryforwards of approximately $181.8 million, which expire from 2018 to 2033. This included approximately $27.3 million in net operating loss carryforwards associated with the Neutron merger. A full valuation allowance has been recorded against the tax effected U.S. loss carryforwards as we do not consider realization of such assets to meet the required 'more likely than not' standard. In addition, we had net operating loss carryforwards in various U.S. state jurisdictions of approximately $50.0 million which expire from 2014 to 2033. A full valuation allowance has been recorded against the tax effected state loss carryforwards as we do not consider realization of such assets to meet the required 'more likely that not' standard.

Section 382 of the Internal Revenue Code could apply and limit our ability to utilize a portion of the US net operating loss carryforwards. Following the issuance of the Company's Common Stock in 2001 and the Neutron merger in 2012, the ability to utilize the net operating loss carryforwards will be severely limited on an annual and aggregate basis. A formal Section 382 study has not been completed, therefore the actual usage of US net operating loss carryforwards has not been determined. Similar limitations apply to the state net operating loss carryforwards related to the Neutron acquisition.

For financial reporting purposes, net loss before income taxes consists of the following components:

	Year ended December 31,

	2013			2012
United States	$	(20,294,000	)	$	(19,361,000	)
Other Countries		—			—


	$	(20,294,000	)	$	(19,361,000	)

A reconciliation of expected income tax on net income at statutory rates is as follows:

	Year ended December 31,

	2013			2012
Net loss	$	(20,294,000	)	$	(19,361,000	)
Statutory tax rate		34	%		34	%


Tax recovery at statutory rate		(6,900,000	)		(6,583,000	)
Change in tax rates		636,000			—
Mineral property adjustments		(4,210,000	)
Stock based compensation		416,000			—
Operating loss carryfoward adjustment		636,000
Nondeductible write-offs		126,000			—
Change in valuation allowance		9,296,000			6,583,000


Income tax expense (recovery)	$	—		$	—

We do not have any unrecognized income tax benefits. Should we incur interest and penalties relating to tax uncertainties, such amounts would be classified as a component of the interest expense and operating expense, respectively.

Uranium Resources, Inc., and its wholly owned subsidiaries, files in the U.S. federal jurisdiction and various state jurisdictions. The years still open for audit are generally the current year plus the previous three. However, because we have NOLs carrying forward, certain items attributable to closed tax years are still subject to adjustment by applicable taxing authorities through an adjustment to tax losses carried forward to open years.