14. INCOME TAXES

As of March 31, 2015, the Company had net deferred tax assets of $22,374, which is recorded as a non-current deferred tax asset of $22,547 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 $75 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 $98 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 March 31, 2015, $64 of the net deferred tax liabilities relate to non-controlling interests. These amounts are included in prepaid expenses and other assets and deferred tax and other liabilities on the Condensed Consolidated Statement of Financial Position, respectively.

As of December 31, 2014, the Company had net deferred tax assets of $22,835, which is recorded as a non-current deferred tax asset of $23,000 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 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. These amounts are included in prepaid expenses and other assets and deferred tax and other liabilities in the Condensed Consolidated Statement of Financial Condition, respectively.

The current tax expense was $653 and $442 for the three months ended March 31, 2015 and 2014, respectively. Of the amount for the three months ended March 31, 2015, $307 relates to Silvercrest’s corporate tax expense, $345 relates to SLP’s UBT liability and $1 relates to SFS’s corporate tax expense.  The deferred tax expense for the three months ended March 31, 2015 and 2014 was $645 and $1,013, respectively. When combined with current tax expense, the total income tax provision for the three months ended March 31, 2015 and 2014 is $1,298 and $1,455, respectively.

The current expense increased from the comparable period in 2014 mainly due to increased profitability during 2015.  The deferred tax expense decreased from the comparable period in 2014 primarily due to a discrete item recorded during the three months ended March 31, 2014 related to a reduction in future statutory corporate tax rates in New York State.

Of the total current tax expense for the three months ended March 31, 2015 and 2014, $129 and $124, respectively, relates to non-controlling interests.  Of the deferred tax expense for the three months ended March 31, 2015 and 2014, $3 and $2, respectively, relates to non-controlling interests.  When combined with current tax expense, the total income tax provision for the three months ended March 31, 2015 and 2014 related to non-controlling interests is $132 and $126, respectively.    

In the normal course of business, the Company is subject to examination by federal, state, and local tax regulators. As of March 31, 2015, the Company’s U.S. federal income tax returns for the years 2011 through 2014 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 March 31, 2015 and 2014.