INCOME TAXES

The Company accounts for income taxes using ASC 740, “Income Taxes” which is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized differently in the financial statements and the tax returns. The provision for income taxes consists of the following at December 31:



($ in thousands)	2013			2012		2011
Total provision:	$	2,086		$	2,723	$	7,367
Federal:
Current	$	(2,459	)	903		6,812
Deferred	4,097			1,092		(1,233		)
	1,638			1,995		5,579
State:
Current	231			67		2,133
Deferred	217			661		(345		)
	448			728		1,788
	$	2,086		$	2,723	$	7,367

The reasons for the difference between total income tax expense and the amount computed by applying the statutory Federal income tax rate of 34% to income before taxes are as follows for the years ended December 31:



($ in thousands)	2013			2012			2011
Income tax at statutory rate	$	2,139		$	2,382		$	7,909
State income taxes, net of Federal benefit	307			472			1,180
Oil and mineral depletion	(450		)	(620		)	(552		)
Valuation allowance - land contribution	—			—			(595		)
Other, net	90			489			(575		)
Total provision	$	2,086		$	2,723		$	7,367

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows at December 31:



($ in thousands)	2013		2012
Deferred income tax assets:
Accrued expenses	$	600	$	525
Deferred revenues	371		512
Capitalization of costs	2,151		1,758
Pension adjustment	2,923		4,262
Stock grant expense	2,660		7,005
State deferred taxes	2		777
Book deferred gains	1,416		963
Provision for additional capitalized costs	1,003		1,003
Other	1,208		73
Total deferred income tax assets	$	12,334	$	16,878
Deferred income tax liabilities:
Deferred gains	$	1,390	$	1,390
Depreciation	3,495		3,374
Cost of sales allocations	1,252		1,252
Joint venture allocations	2,001		2,084
Straight line rent	1,006		1,063
Prepaid expenses	406		212
State deferred taxes	444		345
Other	296		785
Total deferred income tax liabilities	$	10,290	$	10,505
Net deferred income tax asset	$	2,044	$	6,373
Allowance for deferred tax assets	—		—
Net deferred taxes	$	2,044	$	6,373

The net current and non-current deferred tax assets for 2013 and 2012 are included separately on the face of the balance sheet. Due to the nature of most of our deferred tax assets, the Company believes they will be used through operations in future years and an allowance is not necessary.

During 2013 and 2012, the Company recognized certain net tax benefits related to stock option plans in the amount of $3,000 and $8,000, respectively. Such benefits were recorded as a reduction of income taxes payable and an increase in additional paid in capital.

The Company made total income tax payments of $15,000 in 2013 and $4,601,000 during 2012. The Company received federal refunds of $0 and $580,000 in 2013 and 2012, respectively.

The Company evaluates its tax positions for all income tax items based on their technical merits to determine whether each position satisfies the “more likely than not to be sustained upon examination” test. The tax benefits are then measured as the largest amount of benefit, determined on a cumulative basis, that is “more likely than not” to be realized upon ultimate settlement. As a result of the this evaluation, the Company determined there were no uncertain tax positions that required recognition and measurement for the years ended December 31, 2013 and 2012 within the scope of ASC 740, "Income Taxes." Tax years from 2010 to 2012 and 2009 to 2012 remain available for examination by the Federal and California State taxing authorities, respectively.