Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

v3.19.3.a.u2
INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Schedule of Income Tax Expense (Benefit)

Income tax (benefit) expense consists of the following:
 
Year Ended December 31,
 
2019
 
2018
 
2017
Current:
 
 
 
 
 
  Federal
$
148

 
$
6,146

 
$
(1,250
)
  State and Local
3,411

 
477

 
360

    Total Current Income Tax Expense (Benefit)
3,559

 
6,623

 
(890
)
Deferred:
 
 
 
 
 
  Federal
28,939

 
(68,907
)
 
148,997

  State and Local
9,268

 
(11,147
)
 
19,521

    Total Deferred Income Tax Expense (Benefit)
38,207

 
(80,054
)
 
168,518

Total Income Tax (Benefit) Expense
$
41,766

 
$
(73,431
)
 
$
167,628


Schedule of Reported Provision for Income Taxes and the U.S. Federal Statutory Rate
The difference between New Residential’s reported provision for income taxes and the U.S. federal statutory rate of 21% is as follows:
 
December 31,
 
2019
 
2018
 
2017
Provision at the statutory rate
21.00
 %
 
21.00
 %
 
35.00
 %
Non-taxable REIT income
(16.26
)%
 
(25.44
)%
 
(21.72
)%
State and local taxes
2.36
 %
 
(1.19
)%
 
1.76
 %
Change in valuation allowance
 %
 
(2.31
)%
 
0.85
 %
Change in federal tax rate
 %
 
 %
 
(0.92
)%
Other
0.66
 %
 
(0.30
)%
 
(0.17
)%
Total provision
7.76
 %
 
(8.24
)%
 
14.80
 %


Schedule of Deferred Tax Assets and Liabilities
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liability are presented below:
 
December 31,
 
2019
 
2018
Deferred tax assets:
 
 
 
Net operating losses and tax credit carryforwards(A)
$
79,897

 
$
41,713

Basis differences for REO and other assets
16,279

 
8,453

Unrealized mark to market
10,084

 
36,758

Other
1,194

 
3,087

Total deferred tax assets
107,454

 
90,011

Less valuation allowance

 

Net deferred tax assets
$
107,454

 
$
90,011

 
 
 
 
Deferred tax liabilities:
 
 
 
Mortgage servicing rights
$
(65,582
)
 
$

Basis difference for partnership and other investments
(29,022
)
 
(24,179
)
Fixed asset depreciation
(4,181
)
 

Total deferred tax (liability)
$
(98,785
)
 
$
(24,179
)
 
 
 
 
Net deferred tax assets (liability)
$
8,669

 
$
65,832


(A)
As of December 31, 2019, New Residential’s TRSs had approximately $328.0 million of net operating loss carryforwards for federal and state income tax purposes which may be available to offset future taxable income, if and when it arises. Approximately, $9.1 million of these federal and state net operating loss carryforwards will begin to expire in 2034. The utilization of the net operating loss carryforwards to reduce future income taxes will depend on the TRSs ability to generate sufficient taxable income prior to the expiration of the carryforward period.

Schedule of Taxable Common Stock Distributions
Common stock distributions were taxable as follows:
Year
Dividends
per Share
 
Ordinary
Income
 
Long-term
Capital
Gain
 
Return
of
Capital
2019(A)
$
1.87

 
77.53
%
 
15.82
%
 
6.65
%
2018(B)
1.60

 
78.03
%
 
1.03
%
 
20.94
%
2017(C)
1.94

 
66.64
%
 
7.83
%
 
25.53
%


(A)
The entire $0.50 per share dividend declared in December 2019 and paid in January 2020 is treated as received by stockholders in 2020.
(B)
The entire $0.50 per share dividend declared in December 2018 and paid in January 2019 is treated as received by stockholders in 2019.
(C)
The entire $0.50 per share dividend declared in December 2017 and paid in January 2018 is treated as received by stockholders in 2018.

Series A Preferred stock distributions were as follows:
Year
Dividends
per Share
 
Ordinary
Income
 
Long-term
Capital
Gain
 
Return
of
Capital
2019
$
0.69

 
84.18
%
 
15.82
%
 
%

Series B Preferred stock distributions were as follows:
Year
Dividends
per Share
 
Ordinary
Income
 
Long-term
Capital
Gain
 
Return
of
Capital
2019
$
0.45

 
84.18
%
 
15.82
%
 
%