Jim: As I previously posted a 4th quarter deferred tax write off was expected due to the lowering of rates under the new tax law. Below are a couple of abstracts from the 10-K discussing the charge. As noted the effective rate for the year was 41.6%; however since the full amount of the charge off was in the 4th qtr, the effective rate was much higher. The most important thing is that, as stated, most of IDCC's future income will only be subject to a 12.125% rate.
"As a result of the Tax Reform Act, we recorded a tax charge of approximately $42.6 million in 2017 due to a re-measurement of deferred tax assets and liabilities, and we do not expect a material repatriation tax liability to be owed. We will continue to monitor as additional guidance is released. The tax charge represents provisional amounts and the Company’s current best estimates. Any adjustments recorded to the provisional amounts through fourth quarter 2018 will be included in net income as an adjustment to tax expense. The provisional amounts incorporate assumptions made based upon our current interpretation of the Tax Reform Act and may change as the Company receives additional clarification and implementation guidance. On a go-forward basis, we currently expect a significant portion of our income to qualify as FDII and thus be subject to the 13.125% tax rate".
"Income Taxes
In 2017, our effective tax rate was approximately 41.6% as compared to 27.7% in 2016, based on the statutory federal tax rate net of discrete federal and state taxes. The increase in the effective tax rate was primarily attributable to the revaluation of our net deferred tax assets at the new statutory tax rate of 21% due to the Tax Reform Act signed into law in December 2017. The revaluation resulted in a 2017 charge of approximately $42.6 million….."
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