18. 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,
	2015		2014		2013
	(in thousands)

Income/(loss) from continuing operations before income taxes for TRS’s	$	645	$	2,925	$	(1,084)

Expected federal income tax provision	$	219	$	995	$	(368)
State income taxes		41		172		(61)
Change in valuation allowance		(301)		(1,175)		418
Other		41		8		11
Income tax provision	$	—	$	—	$	—

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


	December 31,
	2015		2014
	(in thousands)
Deferred tax assets:
Net operating losses	$	1,614	$	1,893
Secured borrowings—government guaranteed loans		916		1,075
Other		264		225
Total gross deferred tax assets		2,794		3,193
Valuation allowance		(1,507)		(1,808)
		1,287		1,385
Deferred tax liabilities:
Loans receivable		(618)		(681)
Other		(245)		(147)
		(863)		(828)
Deferred tax asset, net	$	424	$	557

Reported as:
Deferred tax assets	$	—	$	—
Assets held for sale		424		557
Deferred tax assets, net	$	424	$	557

The net operating loss carryforwards at December 31, 2015 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 2034.

The periods subject to examination for our federal and state income returns are 2011 through 2014. As of December 31, 2015 and 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.