Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Our sources of Income before income taxes were as follows:


	Year Ended December 31,
(in millions)	2020		2019		2018
U.S.	$	3,493	$	4,557	$	3,686
Foreign	37		46		231
Income from continuing operations before income taxes	$	3,530	$	4,603	$	3,917

Income tax expense is summarized as follows:


	Year Ended December 31,
(in millions)	2020		2019		2018
Current tax benefit (expense)
Federal	$	17	$	24	$	39
State	(84)		(70)		(63)
Foreign	(10)		2		(25)
Total current tax expense	(77)		(44)		(49)
Deferred tax benefit (expense)
Federal	(676)		(954)		(750)
State	(34)		(125)		(160)
Foreign	1		(12)		(70)
Total deferred tax expense	(709)		(1,091)		(980)
Total income tax expense	$	(786)	$	(1,135)	$	(1,029)

The reconciliation between the U.S. federal statutory income tax rate and our effective income tax rate is as follows:


	Year Ended December 31,
	2020		2019		2018
Federal statutory income tax rate	21.0	%	21.0	%	21.0	%
Effect of law and rate changes	(0.8)		0.4		1.9
Change in valuation allowance	(2.6)		(1.8)		(1.6)
State taxes, net of federal benefit	4.8		5.1		4.8
Foreign taxes, net of federal benefit	0.3		0.3		2.4
Permanent differences	0.4		0.6		0.7
Federal tax credits, net of reserves	(0.9)		(0.8)		(2.9)
Equity-based compensation	(2.5)		(0.6)		(0.8)
Non-deductible compensation	2.3		0.6		0.8
Other, net	0.3		(0.1)		—
Effective income tax rate	22.3	%	24.7	%	26.3	%

Significant components of deferred income tax assets and liabilities, tax effected, are as follows:


(in millions)	December 31, 2020		December 31, 2019
Deferred tax assets
Loss carryforwards	$	4,540	$	823

Lease liabilities	8,031		3,403
Property and equipment	90		—
Reserves and accruals	1,348		659
Federal and state tax credits	411		331

Other	2,665		903
Deferred tax assets, gross	17,085		6,119
Valuation allowance	(878)		(129)
Deferred tax assets, net	16,207		5,990
Deferred tax liabilities
Spectrum licenses	17,518		5,902
Property and equipment	—		2,506
Lease right-of-use assets	7,239		2,881
Other intangible assets	912		19
Other	504		289
Total deferred tax liabilities	26,173		11,597
Net deferred tax liabilities	$	9,966	$	5,607

Classified on the balance sheet as:
Deferred tax liabilities	$	9,966	$	5,607

A reconciliation of the beginning and ending amount of unrecognized tax benefits were as follows:


	Year Ended December 31,
(in millions)	2020		2019		2018
Unrecognized tax benefits, beginning of year	$	514	$	462	$	412
Gross increases to tax positions in prior periods	6		—		16
Gross decreases to tax positions in prior periods	(28)		—		(11)
Gross increases to current period tax positions	45		64		39
Gross increases due to current period business acquisitions	624		—		10
Gross decreases due to settlements with taxing authorities	(2)		(12)		(4)

Unrecognized tax benefits, end of year	$	1,159	$	514	$	462