INCOME TAXES |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES | INCOME TAXES We have elected to be taxed as a REIT. As a REIT, we are generally not subject to corporate-level income taxes on taxable income we distribute to our stockholders. Income related to our TRS Lessees is subject to federal, state, and local taxes at applicable corporate tax rates. Our consolidated tax provision includes the income tax provision related to the operations of the TRS Lessees as well as state and local income taxes related to the Operating Partnership. We consider all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance for deferred tax assets is needed. Certain of our TRS Lessees have incurred operating losses in the past and the realizability of certain of our deferred tax assets as of June 30, 2026 is not reasonably assured. Therefore, we have recorded a valuation allowance of $2.7 million against a portion of our deferred tax assets at June 30, 2026. We may reverse the valuation allowance in the future as additional evidence becomes available to support the realizability of the deferred tax assets. The Company accounts for income taxes in interim periods in accordance with ASC No. 740 - Income Taxes. Under ASC No. 740, income tax expense (benefit) is recognized in interim periods based on our best estimate of the annual effective tax rate expected to be applicable for the full fiscal year. This estimated annual effective tax rate is updated quarterly and applied to year-to-date consolidated ordinary income (loss). Estimates of the annual effective tax rate are, of necessity, based on evaluations of possible future events and transactions that may be subject to subsequent refinement or revision. Actual tax expense for the full fiscal year may vary from these interim period estimates if actual full-year operating results, tax planning strategies, or jurisdictions in which income is earned differ significantly from our current forecasts. Tax effects of discrete, unusual, or infrequently occurring items are recognized entirely in the interim period in which they occur. The Company recorded an income tax benefit of $1.4 million and an income tax expense of $1.2 million for the three months ended June 30, 2026 and 2025, respectively, and an income tax benefit of $0.5 million and an income tax expense of $1.9 million for the six months ended June 30, 2026 and 2025, respectively. We file U.S. and state income tax returns in jurisdictions with varying statutes of limitations. In general, we are not subject to tax examinations by tax authorities for years before 2022. In the normal course of business, we are subject to examination by federal, state, and local jurisdictions where applicable. We had no unrecognized tax benefits at June 30, 2026. We expect no significant increase or decrease in unrecognized tax benefits due to changes in tax positions within the next year.
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