14. INCOME TAXES

As of September 30, 2014, the Company had net deferred tax assets of $23,646, which is recorded as a non-current deferred tax asset of $23,815 specific to Silvercrest which consists primarily of assets related to temporary differences between the financial statement and tax bases of intangible assets related to its acquisition of partnership units of SLP, a non-current deferred tax liability of $65 specific to SLP which consists primarily of liabilities related to differences between the financial statement and tax bases of intangible assets offset in part by amounts for deferred rent expense and a non-current deferred tax liability of $104 related to the corporate activity of SFS which is primarily related to temporary differences between the financial statement and tax bases of intangible assets.  Of the total net deferred taxes at September 30, 2014, $64 of the net deferred tax liabilities relate to non-controlling interests. These amounts are included in the prepaid expenses and other assets and deferred tax and other liabilities on the Condensed Consolidated Statement of Financial Position, respectively.

As of December 31, 2013, the Company had net deferred tax assets of $25,683, which is recorded as a non-current deferred tax asset of $25,831 specific to Silvercrest which consists primarily of assets related to temporary differences between the financial statement and tax bases of intangible assets related to its acquisition of partnership units of SLP, a non-current deferred tax liability of $34 specific to SLP which consists primarily of liabilities related to differences between the financial statement and tax bases of intangible assets offset in part by amounts for deferred rent expense, and a non-current deferred tax liability of $114 related to the corporate activity of SFS which is primarily related to temporary differences between the financial statement and tax bases of intangible assets. These amounts are included in the prepaid expenses and other assets and deferred tax and other liabilities in the Consolidated Statement of Financial Condition, respectively.

The current tax expense was $990 and $546 for the three months ended September 30, 2014 and 2013, respectively. Of the amount for the three months ended September 30, 2014, $720 relates to Silvercrest’s corporate tax expense, $268 relates to SLP’s UBT liability and $2 relates to SFS’s corporate tax expense.  The deferred tax expense for the three months ended September 30, 2014 and 2013 was $475 and $277, respectively. When combined with current tax expense, the total income tax provision for the three months ended September 30, 2014 and 2013 is $1,465 and $823, respectively.

The current tax expense was $1,774 and $1,138 for the nine months ended September 30, 2014 and 2013, respectively. Of the amount for the nine months ended September 30, 2014, $806 relates to Silvercrest’s corporate tax expense, $963 relates to SLP’s UBT liability and $5 relates to SFS’s corporate tax expense.  The deferred tax expense for the nine months ended September 30, 2014 and 2013 was $2,479 and $351, respectively. When combined with current tax expense, the total income tax provision for the nine months ended September 30, 2014 and 2013 is $4,253 and $1,489, respectively.

The current expense increased from the comparable period for 2013 mainly due to corporate taxes at Silvercrest, which did not previously exist and increased profitability during 2014. The deferred expense difference is attributable primarily to the movement in deferred tax accounts with respect to various intangible assets and other book-tax differences relate to Silvercrest’s acquisition of partnership units of SLP between 2013 and 2014. The deferred tax expense for the nine months ended September 30, 2014 includes the impact of future statutory corporate tax rates in New York State.

Of the total current tax expense for the nine months ended September 30, 2014, $370 relates to non-controlling interests.  Of the deferred tax expense for the three months ended September 30, 2014, $9 relates to non-controlling interests.  When combined with current tax expense, the total income tax provision for the nine months ended September 30, 2014 related to non-controlling interests is $379.    

In the normal course of business, the Company is subject to examination by federal, state, and local tax regulators. As of September 30, 2014, the Company’s U.S. federal income tax returns for the years 2011 through 2013 are open under the normal three-year statute of limitations and therefore subject to examination.

The Company does not believe that it has any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months.