Income Taxes

12 Months Ended

Dec. 31, 2021

Income Taxes

Income Taxes

Note 8 – Income Taxes

Uncertain Tax Positions

The Company is subject to the provisions of Financial Accounting Standards Board ASC Topic 740-10 (“ASC 740-10”) and has analyzed its various federal and state filing positions. The Company believes that its income tax filing positions and deductions are documented and supported. Additionally, the Company believes that its accruals for tax liabilities are adequate. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740-10. The Company’s Federal income tax returns are open for examination by taxing authorities for all tax years after December 31, 2017. The Company has elected to record related interest and penalties, if any, as income tax expense on the Consolidated Statements of Operations and Comprehensive Income. We have no material interest or penalties relating to income taxes recognized for years ended December 31, 2021, 2020, and 2019.

Deferred Taxes

As of December 31, 2018, the Company had accrued a deferred income tax liability in the amount of $0.5 million. This deferred income tax balance represents the federal and state tax effect of deferring income tax in 2007 on the sale of an asset under section 1031 of the Internal Revenue Code. This transaction was accrued within the Company’s TRS entities.  During 2019, the Company restructured its ownership of the TRS to which the deferred tax liability was related, resulting in a reversal of the previously accrued amount.

Income Tax Expense

During the years ended December 31, 2021, 2020, and 2019, the Company recognized net federal and state income tax expense of approximately $2.4 million, $1.1 million and $0.5 million, respectively. The income tax expense recorded in 2021 includes additional tax expense of approximately $0.5 million relating to 2020 operations, recognized upon filing of the 2020 annual tax returns in 2021.