7.	Income Taxes

The Company had a provision (benefit) for income taxes for the years ended December 31, 2014 and 2013 that consisted of the following (in thousands):


	2014		2013
Current:
Foreign	$	—	$	—
Federal		—		—
State		9		5

Total		9		5
Deferred:
Foreign		—		—
Federal		—		(5	)
State		—		(1	)

Total		—		(6	)
Total:
Foreign		—		—
Federal		—		(5	)
State		9		4

Total	$	9	$	(1	)

The Company annually evaluates the positive and negative evidence bearing upon the realizability of its deferred tax assets. The Company, however, has considered results of current operations and concluded that it is more likely than not that the deferred tax assets will not be realizable. As a result, the Company has determined that a valuation allowance of $38.2 and $31.9 million is required at December 31, 2014 and 2013, respectively. The valuation allowance decreased primarily due to an increase in deferred tax assets arising from current year’s net operating losses (“NOLs”) which was partially offset by reduction in deferred tax assets related to capital losses. The tax effects of temporary differences that gave rise to deferred tax assets at December 31, 2014 and 2013, were as follows (in thousands):


	December 31,
	2014			2013
Deferred tax assets:
Net operating losses	$	42,579		$	28,973
Capital losses		361			4,153
Other asset reserves		—			1
Accrued expenses		18			23

Total deferred tax assets		42,958			33,150
Valuation allowance		(38,166	)		(31,931	)

		4,792			1,219
Deferred tax liabilities:
State deferreds		(4,814	)		(1,219	)
Other investment		22			—

Total deferred tax liabilities		(4,792	)		(1,219	)

Net deferred taxes	$	—		$	—

As of December 31, 2014, the Company had federal NOLs totaling approximately $83.8 million and post-apportionment state NOLs totaling approximately $158.8 million. New York State made changes to the carryforward rules for NOLs, and the New York State NOLs have been revalued to be post-apportionment in accordance with New York State instructions. The New York State post-apportionment NOLs included above total $122.6 million. The federal NOLs carry forward for 20 years and being to expire in 2021 through 2035. The state post-apportioned NOLs are from various states and begin to expire in 2015 through 2035.

The Company also has pre-apportionment NOLs from New York City totaling $113.7 million as of December 31, 2014. Since the Company has no revenue-generating operations in New York City and none are expected in the future, management has determined that none of the NOLs should be recognized. If the Company were to commence operations in New York City in future years, the realizability of the NOLs and related deferred tax assets will be assessed at such time. The NOLs from New York City carry forward for 20 years and begin to expire in 2021 through 2035.

The federal and state NOLs may be subject to certain limitations under Section 382 of the Internal Revenue Code, which could significantly restrict the Company’s ability to use the NOLs to offset taxable income in subsequent years. The Company completed a review of any potential limitation on the use of its net operating losses under Section 382 on August 9, 2008, and an update to this review on June 7, 2013. Based on such reviews, the Company does not believe Section 382 of the Internal Revenue Code will adversely impact its ability to use its current net operating losses to offset future taxable income, if any.

The following is a reconciliation of the statutory federal income tax rate to the actual effective income tax rate for continuing operations:


	2014			2013
Federal tax (benefit) rate		34.0	%		(34.0	)%

Increase (decrease) in taxes resulting from:
State income taxes		5.8			(5.8	)
Change in valuation allowance		(39.4	)		39.2
Permanent differences		(0.4	)		0.6
Minimum tax		(0.1	)		0.1

		(0.1	)%		0.1	%