Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2017 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes |
Income Taxes
For the three and six months ended June 30, 2017 and 2016, the Company qualified to be taxed as a REIT under the Code for U.S. federal income tax purposes. As long as the Company qualifies as a REIT, the Company generally will not be subject to U.S. federal income taxes on its taxable income to the extent it annually distributes its net taxable income to stockholders, and does not engage in prohibited transactions. The Company intends to distribute 100% of its REIT taxable income and comply with all requirements to continue to qualify as a REIT. The majority of states also recognize the Company’s REIT status. The Company’s TRSs file separate tax returns and are fully taxed as standalone U.S. C-corporations. It is assumed that the Company will retain its REIT status and will incur no REIT level taxation as it intends to comply with the REIT regulations and annual distribution requirements.
During the three and six months ended June 30, 2017, the Company’s TRSs recognized a provision for income taxes of $8.8 million and a benefit from income taxes of $15.8 million, respectively. The provision for the three months ended June 30, 2017 was primarily due to realized gains on sales of AFS securities held in the Company’s TRSs, while the benefit for the six months ended June 30, 2017 was primarily due to realized losses on sales of AFS securities and net losses incurred on derivative instruments held in the Company’s TRSs. During the three and six months ended June 30, 2016, the Company’s TRSs recognized a benefit from income taxes of $14.8 million and $9.3 million, respectively, which was primarily due to losses incurred on MSR and derivative instruments held in the Company’s TRSs. At June 30, 2017, a $4.3 million valuation allowance was established because the Company determined that it is more likely than not that the associated deferred tax asset will not be realized. At December 31, 2016, the Company had not recorded a valuation allowance for any portion of its deferred tax assets as it did not believe, at a more likely than not level, that any portion of its deferred tax assets would not be realized.
Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s condensed consolidated financial statements of a contingent tax liability for uncertain tax positions.
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- References No definition available.
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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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