Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Note 8 — Income Taxes

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities of our taxable entities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax liabilities and assets are as follows (in thousands):

	December 31,
	2021			2020
Deferred tax liabilities:
Real estate and real estate partnership basis differences	$	124,733		$	132,599
Interest Income		—			—
Lease Liability		79,827			—
Other		1,807			—
Deferred tax assets:					—
Real Estate & Real Estate Partnership Basis Difference		145			—
Lease Right of Use		80,497			—
Management contracts and other		2,764			999
Net operating, capital, and other loss carryforwards		5,598			40
Valuation Allowance for Deferred Tax Assets		(1,342	)		—
Net deferred tax liability	$	118,705		$	131,560

Our policy is to include any interest and penalties related to income taxes within income tax benefit (expense) in our consolidated statements of operations.

Significant components of the income tax benefit (expense) are as follows and are classified within income tax benefit in our consolidated statements of operations for the years ended December 31, 2021, 2020, and 2019 (in thousands):

	2021			2020			2019
Current:
Federal	$	905		$	857		$	1,313
State		(250	)		660			536
Total current		655			1,517			1,849
Deferred:
Federal		(7,400	)		(10,470	)		(4,658	)
State		(6,825	)		(1,196	)		(492	)
Total deferred		(14,225	)		(11,666	)		(5,150	)
Total income tax benefit	$	(13,570	)	$	(10,149	)	$	(3,301	)

Consolidated GAAP income or loss subject to tax consists of pretax income or loss of our taxable entities and income and gains retained by the REIT. For the years ended December 31, 2021, 2020, and 2019, we had consolidated net loss subject to tax of $31.4 million, $25.5 million, and $7.5 million, respectively.

The reconciliation of income tax attributable to operations computed at the United States statutory rate to income tax benefit for the years ended December 31, 2021 2020, and 2019 is shown below (in thousands):

	2021						2020						2019
	Amount			Percent			Amount			Percent			Amount			Percent
Tax (benefit) expense at United States statutory rates on consolidated income or loss subject to tax	$	(6,591	)		21.0	%	$	(5,361	)		21.0	%	$	(1,582	)		21.0	%
US branch profits tax on earnings of foreign subsidiary		(1,084	)		3.5	%		(4,195	)		16.4	%		(1,779	)		23.6	%
State income tax, net of federal (benefit) expense		(7,075	)		22.5	%		(536	)		2.1	%		34			(0.5	%)
Effects of permanent differences		197			(0.6	%)		1			0.0	%		—			0.0	%
Valuation Allowance		840			(2.7	%)		—			0.0	%		—			0.0	%
Other		143			(0.5	%)		(58	)		0.2	%		26			(0.3	%)
Total income tax benefit	$	(13,570	)		43.2	%	$	(10,149	)		39.7	%	$	(3,301	)		43.8	%

Income taxes paid totaled approximately $2.9 million, $9.2 million, and $1.8 million for the years ended December 31, 2021, 2020, and 2019, respectively.

For income tax purposes, dividends paid to holders of common stock primarily consist of ordinary income, capital gains, qualified dividends and unrecaptured Section 1250 gains, or a combination thereof. For the years ended December 31, 2021, 2020, and 2019, tax attributes of dividends per share held for the entire year were estimated to be as follows (unaudited):

	2021					2020					2019
	Amount		Percent			Amount		Percent			Amount		Percent
Ordinary income	$	—		0.0	%	$	3.17		6.7	%	$	0.66		20.6	%
Capital gains		—		0.0	%		19.43		40.9	%		1.29		40.4	%
Qualified dividends		—		0.0	%		0.62		1.3	%		0.66		20.7	%
Unrecaptured § 1250 gain		—		0.0	%		8.80		18.5	%		0.58		18.3	%
Return of capital		—		0.0	%		15.48		32.6	%		—		0.0	%
Balance at December 31	$	—		0.0	%	$	47.50		100.0	%	$	3.19		100.0	%

A reconciliation of the beginning and ending balance of our unrecognized tax benefits is presented below and is included in accrued liabilities and other in the consolidated balance sheets (in thousands):

Because the statute of limitations has not yet elapsed, our United States federal income tax returns for the year ended December 31, 2018, and subsequent years and certain of our state income tax returns for the year ended December 31, 2018, and subsequent years are currently subject to examination by the IRS or other taxing authorities. If recognized, the unrecognized benefit would affect the effective rate.

	December 31,
	2021			2020
Balance at January 1	$	7,076		$	—
Liability assumed at Separation		—			6,889
(Reductions) additions based on tax positions in prior years		(38	)		187
Balance at December 31	$	7,038		$	7,076

In accordance with the accounting requirements for stock-based compensation, we may recognize tax benefits in connection with the exercise of stock options by employees of our TRS entities and the vesting of restricted stock awards. We recognize the tax effects related to stock-based compensation through earnings in the period the compensation is recognized.