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10-K
RLJ LODGING TRUST filed this Form 10-K on 03/01/2019
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Deferred income taxes represent the tax effect from continuing operations of the differences between the book and tax basis of the assets and liabilities. The deferred tax assets (liabilities) include the following (in thousands):
 
December 31, 2018
 
December 31, 2017
Deferred tax liabilities:
 
 
 
Prepaid expenses
$
(1,298
)
 
$
(1,501
)
Intangible assets
(1,468
)
 
(3,597
)
Deposits

 
(449
)
Deferred tax liabilities
$
(2,766
)
 
$
(5,547
)
 
 
 
 
Deferred tax assets:
 
 
 
Property and equipment
$
2,639

 
$
5,427

Incentive and vacation accrual
4,595

 
4,576

Deferred revenue - key money
1,037

 
1,095

Allowance for doubtful accounts
156

 
128

Partnership basis
573

 
918

Contingent liability
298

 
301

Other
1,077

 
357

Other carryforwards

 
184

Net operating loss carryforwards
57,248

 
64,546

Federal historic tax credit
824

 
824

Valuation allowance
(21,052
)
 
(21,595
)
Deferred tax assets
$
47,395

 
$
56,761


Deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on the consideration of all available evidence, including the future reversals of existing taxable temporary differences, future projected taxable income, and tax planning strategies. Valuation allowances are provided if, based upon the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company records a valuation allowance to reduce its deferred tax assets to the amount that is most likely to be utilized in future periods to offset taxable income. As of December 31, 2018 and 2017, the Company had a valuation allowance of approximately $21.1 million and $21.6 million, respectively, related to net operating loss ("NOL") carryforwards, historic tax credits, and other deferred tax assets of its TRSs. The Company considered all available evidence, both positive and negative, including cumulative income in recent years and its current forecast of future income in its analysis. While the Company believes its forecast of future income is reasonable, it is inherently uncertain. If the Company’s projections of future income are lower than expected, the Company may need to establish an additional valuation allowance.

The Company’s NOLs will begin to expire in 2024 for federal tax purposes and 2019 to 2032 for state tax purposes. Additionally, the annual utilization of these NOLs is limited pursuant to Section 382 of the Code. The Company's historic tax credits begin to expire in 2035. Additionally, the annual utilization of these tax credits is limited pursuant to Section 383 of the Code.

The Company is subject to examination by the U.S. Internal Revenue Service ("IRS") and various state and local jurisdictions.  The tax years subject to examination vary by jurisdiction.  With few exceptions, as of December 31, 2018, the Company is no longer subject to U.S. federal or state and local tax examinations by tax authorities for the tax years of 2014 and before. 

The Company had no accruals for tax uncertainties as of December 31, 2018 and 2017.

17. Segment Information
The Company separately evaluates the performance of each of its hotel properties. However, because each of the hotels has similar economic characteristics, facilities, and services, the hotel properties have been aggregated into a single operating segment.


F-42

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