Income Taxes
 12 Months Ended
Dec. 31, 2015
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
We intend to elect to be taxed as, and operate in a manner that will allow us to qualify as, a REIT under the Code, for federal income tax purposes, beginning with our tax year ended December 31, 2015. If we qualify for taxation as a REIT, we generally will not be subject to U.S. federal corporate income tax on our net taxable income that is currently distributed to our stockholders. A REIT is subject to a number of organizational and operational requirements, including a requirement that it currently distributes at least 90% of its REIT taxable income (subject to certain adjustments) to its stockholders. If we fail to qualify as a REIT in any taxable year, without the benefit of certain relief provisions, we will be subject to federal and state income tax on our taxable income at regular corporate tax rates. Even if we qualify for taxation as a REIT, we also may be subject to certain federal, state, and local taxes on our income and assets, including (1) taxes on any undistributed income, (2) taxes related to our TRSs and (3) certain state or local income taxes.

We elected for one of our subsidiaries to be treated, and may in the future elect to treat newly formed subsidiaries, as TRSs pursuant to the Code. TRSs may participate in non-real estate related activities and/or perform non-customary services for tenants and are subject to federal and state income tax at regular corporate tax rates.
All entities other than our TRS are collectively referred to as the “REIT” within this Note 9.
During the year ended December 31, 2015, our tax treatment of distributions per common share was as follows:
 
2015
Tax treatment of distributions:
 
Ordinary income
$
1.105160

Qualified ordinary income
—

Long-term capital gain
—

Unrecaptured Section 1250 gain
—

Return of capital
0.034840

Distribution reported for 1099-DIV purposes
$
1.140000


We believe we have met the annual REIT distribution requirement by payment of at least 90% of our estimated taxable income for 2015. The provision for income taxes related to continuing operations consists of the following (in thousands):
 
Year Ended December 31,
 
2015
Current:


Federal
$
(91
)
State
(213
)
Total current
(304
)
Deferred:


Federal
114

State
(748
)
Total deferred
(634
)
Total income tax (provision)
$
(938
)

There was no benefit (provision) for income taxes related to continuing operations for the years ended December 31, 2014 and 2013.
Below is a reconciliation between the provision for income taxes and the amount computed by applying the federal statutory income tax rate to the income or loss for continuing operations before income taxes (in thousands):
 
Year Ended December 31,
 
2015
Provision for income taxes at statutory rate
$
(49,528
)
35.00
 %
Tax at statutory rate on earnings not subject to federal income taxes
49,561

(35.02
)
Income for which no book expense was recognized
—

0.00

Valuation allowances
—

0.00

State tax (provision) benefit, net of federal
(960
)
0.68

Other
(11
)
0.01

Total income tax (provision)

$
(938
)
0.67
 %

    
Deferred tax assets and liabilities are included within deferred costs and other assets and other liabilities in the combined consolidated balance sheets, respectively, and are mainly attributable to the activity of our taxable REIT subsidiary. The components of the deferred tax liability at December 31, 2015 were as follows (in thousands):
 
Year Ended December 31,
 
2015
Deferred income
$
(138
)
Basis difference on tangible property
(804
)
Basis difference on intangible property
(947
)
Total
(1,889
)
Valuation adjustment
—

Total net deferred tax liability
$
(1,889
)

The REIT made minimal state income tax payments and no federal income tax payments for the year ended December 31, 2015. There were no deferred tax assets or liabilities at December 31, 2014 and 2013.
For the year ended December 31, 2015, the net difference between tax basis and the reported amount of REIT assets and liabilities for federal income tax purposes was approximately $607 million, respectively, less than the book basis of those assets and liabilities for financial reporting purposes.
Generally, we are subject to audit under the statute of limitations by the Internal Revenue Service (“IRS”) for the year ended December 31, 2015 and are subject to audit by state taxation authorities for the year ended December 31, 2015.
We had no uncertain tax positions which would require us to record a tax exposure liability.