XML 44 R31.htm IDEA: XBRL DOCUMENT v3.22.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Certain of our domestic subsidiaries have elected to be treated as taxable REIT subsidiaries (“TRSs”). TRSs permit us to participate in certain activities from which REITs are generally precluded, as long as these activities meet specific criteria, are conducted within the parameters of certain limitations established by the Code and are conducted in entities which elect to be treated as taxable subsidiaries under the Code. To the extent these criteria are met, we will continue to maintain our qualification as a REIT.
Our TRSs engage in various real estate related operations, including special servicing of commercial real estate, originating and securitizing mortgage loans, and investing in entities which engage in real estate-related operations. As of December 31, 2021 and 2020, approximately $3.2 billion and $1.4 billion, respectively, of assets were owned by TRS entities. Our TRSs are not consolidated for U.S. federal income tax purposes, but are instead taxed as corporations. For financial reporting purposes, a provision for current and deferred taxes is established for the portion of earnings recognized by us with respect to our interest in TRSs.
Our income tax provision consisted of the following for the years ended December 31, 2021, 2020 and 2019 (in thousands):
For the Year Ended December 31,
2021
2020
2019
Current
Federal$142$5,690$4,917
State(80) 3,2013,182
Foreign(392) 195977
Total current(330) 9,0869,076
Deferred
Federal6,893 8,2133,869
State2,106 2,898287
Total deferred8,999 11,1114,156
Total income tax provision$8,669$20,197$13,232

Deferred income taxes in our U.S. tax jurisdiction reflect the net tax effects of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table presents the tax effects of temporary differences on net deferred tax (liabilities)/assets which are classified in our consolidated balance sheets within accounts payable, accrued expenses and other liabilities at December 31, 2021 and other assets at December 31, 2020 (in thousands):
December 31,
2021
2020
Deferred tax (liabilities)/asset, net
Reserves and accruals$3,155 $4,571 
Domestic intangible assets(9,652)(1,672)
Lease assets— (310)
Lease liabilities— 579
Investments in unconsolidated entities(1,515)(1,236)
Net operating and other carryforwards1,908 974
Other U.S. temporary differences14 2
Net deferred tax (liabilities)/assets$(6,090)$2,908

Unrecognized tax benefits were not material as of and during the years ended December 31, 2021 and 2020. The Company’s tax returns are no longer subject to audit for years ended prior to January 1, 2018. The Company had pre-tax
income from foreign operations of $0.9 million during the year ended December 31, 2019. There was no pre-tax income from foreign operations during the years ended December 31, 2021 and 2020.
The following table is a reconciliation of our U.S. federal income tax provision determined using our statutory federal tax rate to our reported income tax provision for the years ended December 31, 2021, 2020 and 2019 (dollars in thousands):
For the Year Ended December 31,
20212020
2019
Federal statutory tax rate$105,230 21.0 %$81,118 21.0 %$115,535 21.0 %
REIT and other non-taxable income(92,121)(18.4)%(58,265)(15.1)%(106,301)(19.3)%
State income taxes4,307 0.9 %7,509 1.9 %3,034 0.5 %
Federal benefit of state tax deduction(905)(0.2)%(1,577)(0.4)%(637)(0.1)%
Net operating loss carryback rate differential— — %(3,387)(0.9)%— — %
Intra-entity transfers(6,635)(1.3)%(5,385)(1.4)%— — %
Other(1,207)(0.3)%184 0.1 %1,601 0.3 %
Effective tax rate$8,669 1.7 %$20,197 5.2 %$13,232 2.4 %

There were no valuation allowances during the years ended December 31, 2021, 2020 and 2019.
In response to the COVID-19 pandemic, the U.S. and many other governments have enacted, or are contemplating enacting, measures to provide aid and economic stimulus.  These measures included deferring the due dates of tax payments and other changes to their income and non-income-based tax laws.  The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020 in the U.S., included measures to assist companies, including temporary changes to income and non-income-based tax laws, and allowed companies to carry back tax net operating losses (“NOLs”) generated in 2018 to 2020 to the five preceding tax years. The Company has carried back its NOL generated in 2020 to a year in which the federal tax rate was 35%. We continue to monitor additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service and others.