Income Taxes Income Taxes

12 Months Ended

Dec. 31, 2015

INCOME TAXES

Beginning with our inception in 1991, we have elected to be taxed as a REIT under the Internal Revenue Code (the "Code"). We have elected that our subsidiary established on September 30, 2012 in connection with the Bickford arrangement (which holds our ownership interest in an operating company) be taxed as a taxable REIT subsidiary ("TRS") under provisions of the Code. The TRS is subject to federal and state income taxes like those applicable to regular corporations. Aside from such income taxes which may be applicable to the taxable income in the TRS, we will not be subject to federal income tax provided that we continue to qualify as a REIT and make distributions to stockholders equal to or in excess of 90% of our taxable income.

Per share dividend payments to common stockholders for the last three years are characterized for tax purposes as follows:



(Unaudited)	2015		2014		2013
Ordinary income	$	2.62808	$	2.53548	$	2.8590
Capital gain	0.69110		—		0.1649
Return of capital	0.08082		0.54452		0.09612
Dividends paid per common share	$	3.40	$	3.08	$	3.12

Our consolidated provision for state and federal income tax (benefit) expense for the years ended 2015, 2014, and 2013 was $(583,000), $118,000, and $267,000, respectively. For the years ended 2015, 2014, and 2013 we had no material deferred state or federal income tax.

All of our income tax expense for 2015 and 2014 relates to a franchise tax levied by the state of Texas that has attributes of an income tax. For 2013, tax expense of $128,000 relates to our equity interest in the unconsolidated operating company whose interest is owned by our TRS described above, and $139,000 relates to the Texas franchise tax. For 2015, we recorded a Federal income tax benefit of $707,000 related to losses in our operating subsidiary, offset primarily by Texas Franchise taxes of $124,000 resulting in the net income tax benefit disclosed above of $(583,000). Our state income taxes described above are combined in franchise, excise and other taxes in our Consolidated Statements of Income. Income taxes related to the equity interest in the unconsolidated operating company whose interest is owned by our TRS are included in our Consolidated Statements of Income under the caption Income tax benefit (expense) of taxable REIT subsidiary.

We made state income tax payments of $122,000, $139,000,and $198,000 for the years ended December 31, 2015, 2014, and 2013, respectively.