Texas Pacific Land Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Note 6 - Income Taxes

Note 6 - Income Taxes

12 Months Ended

Dec. 31, 2017

6 .	Income Taxes

The income tax provision charged to operations for the years ended

December 31, 2017,

2016

and

2015

was as follows (in thousands):

	2017			201 6			201 5
Current:
U.S. Federal	$	46,013		$	21,665		$	25,030
State and local		851			376			400
		46,864			22,041			25,430
Deferred benefit		(3,365	)		(4,194	)		(186	)
	$	43,499		$	17,847		$	25,244

The Trust is taxed as if it were a corporation. Total income tax expense differed from the amounts computed by applying the U.S. Federal income tax rate of

35%

to income before Federal income taxes as a result of the following

(in thousands):

	201 7			201 6			201 5
Computed tax expense at the statutory rate	$	41,951		$	19,280		$	26,349
Reduction in income taxes resulting from:
Statutory depletion		(3,378	)		(1,609	)		(1,321	)
State taxes		397			205			257
Effect of change in statutory tax rate (1)		4,519			—			—
Other, net		10			(29	)		(41	)
	$	43,499		$	17,847		$	25,244

(

)

The effect of the anticipated change in statutory income tax rate from

35%

21%

effective

January 1, 2018.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at

December 31,

201

and

2016

are as follows (in thousands):

	201 7		201 6
Deferred revenue	$	8,902	$	4,177
Basis difference in pension plan liability		—		(36	)
Total deferred tax assets		8,902		4,141

Basis differences in property, plant and equipment		1,691		—
Basis differences in real estate acquired through foreclosure		142		234
Basis difference in pension plan liability		68		—
Deferred installment revenue on land sales for tax purposes		9		32
Total deferred tax liability		1,910		266
Net deferred tax asset	$	6,992	$	3,875

The Trust files a U. S. Federal income tax return. With few exceptions, the Trust is

longer subject to U. S. Federal income tax examination by tax authorities for years before

201