14. INCOME TAXES

As of June 30, 2022, the Company had net deferred tax assets of $8,261, which is recorded as a deferred tax asset of $8,485 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 deferred tax liability of $195 specific to SLP which consists primarily of assets related to deferred rent expenses offset in part by amounts for differences in the financial statement and tax bases of intangible assets and a deferred tax liability of $29 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 June 30, 2022, $72 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 Condition, respectively.

As of December 31, 2021, the Company had a net deferred tax asset of $10,702, which is recorded as a net deferred tax asset of $10,797 specific to Silvercrest, which consists primarily of net 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 deferred tax liability of $58 specific to SLP which consists primarily of liabilities related to differences between the financial statement and tax bases of intangible assets, and a net deferred tax liability of $37 related to the corporate activity of SFS which is primarily related to temporary differences between the financial statement and tax bases of intangible assets.

The current tax expense was $1,559 and $1,508 for the three months ended June 30, 2022 and 2021, respectively. Of the amount for the three months ended June 30, 2022, $1,259 relates to Silvercrest’s corporate tax expense, $300 relates to SLP’s state and local liability and $0 relates to SFS’s corporate tax expense. The deferred tax expense for the three months ended June 30, 2022 and 2021 was $794 and $86, respectively. When combined with current tax expense, the total income tax provision for the three months ended June 30, 2022 and 2021 is $2,353 and $1,594, respectively. The discrete tax expense for the three months ended June 30, 2022 and 2021 was $797 and ($759), respectively. For 2022, the discrete tax expense represents an increase to tax expense associated with a favorable fair value adjustment to contingent purchase price consideration related to earnout payments to be made in conjunction with the Cortina Acquisition. For 2021, the discrete tax expense represents a reduction to tax expense associated with an unfavorable fair value adjustment to contingent purchase price consideration related to earnout payments to be made in conjunction with the Cortina Acquisition.

The current tax expense was $2,732 and $2,777 for the six months ended June 30, 2022 and 2021, respectively. Of the amount for the six months ended June 30, 2022, $2,134 relates to Silvercrest’s corporate tax expense, $598 relates to SLP’s state and local liability and $0 relates to SFS’s corporate tax expense. The deferred tax expense for the six months ended June 30, 2022 and 2021 was $2,595 and $74, respectively. When combined with current tax expense, the total income tax provision for the six months ended June 30, 2022 and 2021 is $5,327 and $2,851, respectively. The discrete tax expense for the six months ended June 30, 2022 and 2021 was $1,969 and ($759), respectively. For 2022, the discrete tax expense represents an increase to tax expense associated with a favorable fair value adjustment to contingent purchase price consideration related to earnout payments to be made in conjunction with the Cortina Acquisition. For 2021, the discrete tax expense represents a reduction to tax expense associated with an unfavorable fair value adjustment to contingent purchase price consideration related to earnout payments to be made in conjunction with the Cortina Acquisition.

The current tax expense decreased from the comparable period in 2021 mainly due to favorable timing differences related to various deferred tax assets recorded at SLP.

Of the total current tax expense for the three months ended June 30, 2022 and 2021, $97 and $161, respectively, relates to non-controlling interests. Of the deferred tax expense for the three months ended June 30, 2022 and 2021, $16 and ($7), respectively, relates to non-controlling interests. When combined with current tax expense, the total income tax provision for the three months ended June 30, 2022 and 2021 related to non-controlling interests is $113 and $154, respectively.

Of the total current tax expense for the six months ended June 30, 2022 and 2021, $194 and $297, respectively, relates to non-controlling interests. Of the deferred tax expense for the six months ended June 30, 2022 and 2021, $41 and ($19), respectively, relates to non-controlling interests. When combined with current tax expense, the total income tax provision for the six months ended June 30, 2022 and 2021 related to non-controlling interests is $235 and $278, respectively.

In the normal course of business, the Company is subject to examination by federal, state, and local tax regulators. As of June 30, 2022, the Company’s U.S. federal income tax returns for the years 2018 through 2022 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 June 30, 2022 and 2021.