Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

8. Income Taxes

The Company has elected to be taxed as a REIT under the applicable provisions of the Internal Revenue Code with certain of its subsidiaries treated as taxable REIT subsidiary entities, which are subject to federal and state income taxes.

The following table summarizes the tax status of dividends paid on our common shares:

	Year ended December 31,
(in thousands)	2022				2021				2020
Dividend per share	$	2.53		(1)		2.53		(2)		2.19
Ordinary income		100	%			92	%			100	%
Capital gain (3)		—	%			8	%			—	%
Additional tax status information:
Qualified dividend income		—	%			1	%			—	%
Section 199A dividend		100	%			91	%			100	%
Section 897 ordinary dividends		—	%			2	%			—	%
Section 897 capital gains		—	%			4	%			—	%

(1)During 2022, the Company declared four quarterly dividends, the last of which was paid on January 4, 2023, with a portion allocated to the 2022 dividend period, and the balance allocated to 2023.

(2)During 2021, the Company declared four quarterly dividends, the last of which was paid on January 5, 2022, with a portion allocated to the 2021 devidend period, and the balance allocated to 2022.

(3)Of the total capital gain distribution during 2021, 42% is excluded under Reg. 1.1061-4(b)(7). The remaining 58% is a Three Year Amount under Reg. 1.1061-6(c).

Our consolidated expense (benefit) for income taxes for the years ended December 31, 2022, 2021, and 2020 was as follows:

	Year ended December 31,
(in thousands)	2022			2021		2020
Income tax expense (benefit):
Current	$	(332	)		620		2,157
Deferred		293			421		(891	)
Total income tax expense (benefit) (1)	$	(39	)		1,041		1,266

(1)Includes $(39,000), $943,000 and $(355,000) of tax expense (benefit) presented within Other operating expenses during the years ended December 31, 2022, 2021, and 2020, respectively. Additionally, $1,600,000 of tax expense is presented within Gain on sale of real estate (or Provision for impairment), net of tax, during the year ended December 31, 2020.

The TRS entities are subject to federal and state income taxes and file separate tax returns. Income tax expense (benefit) differed from the amounts computed by applying the U.S. Federal income tax rate to pretax income of the TRS entities, as follows:

	Year ended December 31,
(in thousands)	2022			2021		2020
Computed expected tax expense (benefit)	$	504			544		(3,665	)
State income tax, net of federal benefit		52			477		(593	)
Valuation allowance		(323	)		15		1,043
Permanent items		1			1		5,079
All other items		(273	)		4		(598	)
Total income tax expense (1)		(39	)		1,041		1,266
Income tax expense attributable to operations (1)	$	(39	)		1,041		1,266

(1)Includes $(39,000), $943,000, and $(355,000) of tax expense (benefit) presented within Other operating expenses during the years ended December 31, 2022, 2021, and 2020, respectively. Additionally, $1,600,000 of tax expense is presented within Gain on sale of real estate (or Provision for impairment), net of tax, during the year ended December 31, 2020.

The tax effects of temporary differences (included in Accounts payable and other liabilities in the accompanying Consolidated Balance Sheets) are summarized as follows:

	December 31,
(in thousands)	2022			2021
Deferred tax assets
Fixed assets	$	—			1,039
Other		1,007			1,379
Deferred tax assets		1,007			2,418
Valuation allowance		(1,007	)		(2,418	)
Deferred tax assets, net	$	—			—
Deferred tax liabilities
Fixed assets		(12,527	)		(13,004	)
Other		(61	)		(340	)
Deferred tax liabilities		(12,588	)		(13,344	)
Net deferred tax liabilities	$	(12,588	)		(13,344	)

The Company believes it is more likely than not that the remaining deferred tax assets will not be realized unless tax planning strategies are implemented.