17. INCOME TAXES

We have elected to be taxed as a REIT under the Code. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute at least 90% of our taxable income to our stockholders. As a REIT, we generally will not be subject to corporate level Federal income tax on net income that is currently distributed to stockholders.

We have wholly-owned TRS's which are subject to federal and state income taxes. The income generated from the TRS's is taxed at normal corporate rates. No current or deferred income tax provision was included in income from continuing operations.

The provision for income taxes results in effective tax rates that differ from federal and state statutory rates. A reconciliation of the provision for income tax attributable to the TRS's income from continuing operations computed at federal statutory rates to the income tax provision reported in the financial statements is as follows:

	Year Ended December 31,
	2014			2013			2012
	(In thousands)
Income/(loss) from continuing operations before income taxes for TRS's	$	2,925		$	(1,084	)	$	(481	)


Expected federal income tax provision	$	995			(368	)		(163	)
State income taxes		172			(61	)		(26	)
Change in valuation allowance		(1,175	)		418			177
Other		8			11			12

Income tax provision	$	—		$	—		$	—

The components of our net deferred tax asset were as follows:

	December 31,
	2014			2013
	(In thousands)
Deferred tax assets:
Net operating losses	$	1,893		$	2,598
Secured borrowings—government guaranteed loans		1,075			—
Other		225			327

Total gross deferred tax assets		3,193			2,925
Valuation allowance		(1,808	)		(2,925	)

		1,385			—
Deferred tax liabilities:
Loans receivable		(681	)		—
Other		(147	)		—

		(828	)		—

Deferred tax asset, net	$	557		$	—


Reported as:
Deferred tax assets	$	—		$	—
Assets held for sale		557			—

Deferred tax assets, net	$	557		$	—

The net operating loss carryforwards at December 31, 2014 were generated by TRS's and are available to offset future taxable income of these TRS's. The net operating loss carryforwards expire from 2027 to 2033. The decrease in the valuation allowance recorded in 2014 was $1,175,000.

The periods subject to examination for our federal and state income returns are 2009 through 2013. As of December 31, 2014, no reserves for uncertain tax positions have been established and we do not anticipate any material changes in the amount of unrecognized tax benefits recorded to occur within the next 12 months.