Annual report pursuant to Section 13 and 15(d)

Income Taxes

v2.4.1.9
Income Taxes
12 Months Ended
Dec. 31, 2014
Income Tax Disclosure [Abstract]  
Income Taxes

14. INCOME TAXES

 

 

  

Year Ended December 31,

 

 

  

2014

 

 

2013

 

 

2012

 

Current Provision:

  

 

 

 

 

 

 

 

 

 

 

 

Federal

  

$

896

  

 

$

435

  

 

$

6

 

State and local

  

 

1,890

  

 

 

1,430

  

 

 

1,029

  

Total Current Provision

  

 

2,786

  

 

 

1,865

  

 

 

1,035

  

Deferred (Benefit) Provision:

  

 

 

 

 

 

 

 

 

 

 

 

Federal

  

 

2,200

 

 

 

176

 

 

 

(14

)

State and local

  

 

1,400

  

 

 

107

  

 

 

36

 

Total Deferred Provision (Benefit)

  

 

3,600

  

 

 

283

  

 

 

22

 

Total Provision for Income Taxes

  

$

6,386

  

 

$

2,148

  

 

$

1,057

  

Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their bases for income tax purposes.  The deferred tax expense for the year ended December 31, 2014, also includes additional deferred tax expense of $1,147 for discrete items. The discrete items are primarily attributable to the decrease of deferred tax assets at Silvercrest due to a reduction in the future statutory corporate tax rates and changes in methods of apportioning income in New York State.

As of December 31, 2014 and 2013, the Company had a net deferred tax asset of $22,835 and $25,683, respectively.  As of December 31, 2014, the net deferred tax asset of $22,835, which is recorded as a net non-current deferred tax asset of $23,000 specific to Silvercrest, consists primarily of assets related to temporary differences between the financial statement and tax bases of intangibles related to its acquisition of partnership units of SLP, a net non-current deferred tax liability of $64 specific to SLP which consists primarily of liabilities related to differences between the financial statement and tax bases of intangible assets, and a non-current deferred tax liability of $101 related to the corporate activity of SFS which is primarily related to temporary differences between the financial statement and tax bases of intangible assets.

A summary of deferred tax assets and liabilities as follows:

 

 

  

As of December 31,

 

 

  

2014 

 

 

2013

 

Deferred tax assets

  

 

 

 

 

 

 

 

Intangible assets

 

$

24,170

 

 

$

25,050

 

Other

  

 

37

  

 

 

851

  

Total deferred tax assets

  

$

24,207

  

 

$

25,901

  

Deferred tax liabilities

  

 

 

 

 

 

 

 

Intangible assets

  

$

202

  

 

$

218

  

Investment on underlying SLP partnership

 

 

1,170

 

 

 

 

Total deferred tax liabilities

  

$

1,372

  

 

$

218

  

Net deferred tax assets (liabilities)

  

$

22,835

 

 

$

25,683

 

The following table reconciles the provision for income taxes to the U.S. Federal statutory tax rate:

 

 

  

Year Ended December 31,

 

 

  

2014

 

 

2013

 

 

2012

 

Statutory U.S. federal income tax rate

  

 

35.00

 

 

35.00

 

 

35.00

Income passed through to Partners

  

 

(12.43

)% 

 

 

(25.57

)% 

 

 

(35.00

)% 

State and local income taxes

  

 

15.60

 

 

6.92

 

 

5.26

Permanent items

 

 

(3.69

)%

 

 

0.00

 

 

0.00

Life insurance proceeds

 

 

0.00

 

 

   (5.41

)% 

 

 

0.00

Other

  

 

2.87

 

 

0.13

 

 

(0.17

)% 

Effective income tax rate

  

 

37.35

 

 

11.07

 

 

5.09

As of December 31, 2014, the Company had tax refunds receivable of $1,073 which consisted of federal and state and local tax refunds of $930 and $143, respectively.  At December 31, 2013, the Company had taxes payable of $1,153, which consisted of federal and state and local taxes payable of $430 and $723, respectively.

Of the total net deferred taxes at December 31, 2014, $61 of the net deferred tax liabilities relate to non-controlling interests. These amounts are included in deferred tax and other liabilities on the Consolidated Statement of Financial Position, respectively.

In the normal course of business, the Company is subject to examination by federal, state, and local tax regulators. As of December 31, 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 guidance for accounting for uncertainty in income taxes prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. 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.  Furthermore, the Company does not have any material uncertain tax positions at December 31, 2014 and 2013.