
	Year Ended December 31,
	2020		2019		2018
Domestic	$	(445,370)	$	(441,494)	$	680,423
Foreign	1,423		1,440		2,302
Income (loss) before provision for income taxes	$	(443,947)	$	(440,054)	$	682,725


	Year Ended December 31,
	2020		2019		2018
Current:
Federal	$	—	$	—	$	—
State	165		139		699
Foreign	364		495		620
Total Current	529		634		1,319
Deferred:
Federal	—		—		—
State	—		—		—
Foreign	(36)		(21)		93
Total Deferred	(36)		(21)		93
Provision for income taxes	$	493	$	613	$	1,412

Our income tax provision related to continuing operations differs from the amount computed by applying the statutory income tax rate of 21% for the years ended December 31, 2020, 2019 and 2018 to pretax income (loss) as follows (in thousands):


	Year Ended December 31,
	2020		2019		2018
Income tax expense (benefit) at federal statutory rate	$	(93,229)	$	(92,411)	$	143,372
Research credits	(3,081)		(10,511)		(17,295)
Premium on equity issuance	—		—		(12,551)
Change in valuation allowance	87,060		104,440		(46,885)
Stock-based compensation	7,929		(672)		(66,716)
Non-cash royalty revenue related to sale of future royalties	(7,967)		(7,624)		(6,995)
Non-cash interest expense on liability related to sale of future royalties	6,356		5,259		4,451
Other	3,425		2,132		4,031
Provision for income taxes	$	493	$	613	$	1,412

Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We measure deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future. Significant components of our deferred tax assets for federal and state income taxes are as follows (in thousands):


	December 31,
	2020		2019
Deferred tax assets:
Net operating loss carryforwards	$	456,284	$	399,361
Research and other credits	132,994		128,015
Operating lease liabilities	35,672		36,907
Liability related to the sale of future royalties	32,737		—
Stock-based compensation	32,517		30,875
Other	11,688		13,568
Deferred tax assets before valuation allowance	701,892		608,726
Valuation allowance for deferred tax assets	(670,103)		(575,087)
Total deferred tax assets	31,789		33,639
Deferred tax liabilities:
Operating lease right-of-use assets	(29,707)		(31,718)
Other	(1,856)		(1,725)
Total deferred tax liabilities	(31,563)		(33,443)
Net deferred tax assets	$	226	$	196

Realization of our deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Because of our lack of U.S. earnings history, other than income resulting from revenue recognized from the BMS Collaboration Agreement, and projected future losses, we have fully reserved our net U.S. deferred tax assets with a valuation allowance. The valuation allowance increased by $95.0 million and $114.6 million during the years ended December 31, 2020 and 2019, respectively, primarily due to the additional domestic net operating losses and credits generated in the current year that are not more likely than not of being utilized.

As of December 31, 2020, we had a net operating loss carryforward for federal income tax purposes of approximately $2.0 billion, portions of which will begin to expire in 2021. As of December 31, 2020, we had a total state net operating loss carryforward of approximately $1.3 billion, portions of which will begin to expire in 2026. Utilization of some of the federal and state net operating loss and credit carryforwards are subject to annual limitations due to the “change in ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions.

We have federal research credits of approximately $98.9 million, which will begin to expire in 2023 and state research credits of approximately $44.0 million which have no expiration date. We have federal orphan drug credits of $17.7 million which will begin to expire in 2026. These tax credits are subject to the same limitations discussed above.


	Year Ended December 31,
	2020		2019		2018
Beginning balance	$	77,410	$	27,419	$	20,483
Tax positions related to current year:
Additions	2,512		49,858		5,664
Reductions	—		—		—
Tax positions related to prior years:
Additions	193		277		1,272
Reductions	(1,450)		(144)		—
Settlements	—		—		—
Lapses in statute of limitations	—		—		—
Ending balance	$	78,665	$	77,410	$	27,419

If we are eventually able to recognize our uncertain positions, our effective tax rate may be reduced. We currently have a full valuation allowance against our U.S. net deferred tax asset which would impact the timing of the effective tax rate benefit should any of these uncertain tax positions be favorably settled in the future. Adjustments to the substantial majority of our uncertain tax positions would result in an adjustment of our net operating loss or tax credit carry forwards rather than resulting in a cash outlay.

We file income tax returns in the U.S., California, Alabama, certain other states and India. Because of net operating losses and research credit carryovers, substantially all of our domestic tax years remain open and subject to examination. We may be subject to examination in India from time to time, but we do not believe that any resulting liability resulting from such an examination would have a material effect on our financial position or results of operations.