Income Taxes

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 9.INCOME TAXES

REIT taxable income (loss) is computed in accordance with the Code, which is different than Orchid's financial statement net income (loss) computed in accordance with GAAP. These differences can be substantial. For the year ended December 31, 2012, Orchid has estimated REIT taxable income of approximately $1,689,000. For the year ended December 31, 2011, Orchid's had a REIT taxable loss of approximately $637,000. The differences from GAAP net income or loss, as reported in the statements of operations, are attributable to the fair value adjustments on MBS and Eurodollar futures recorded for GAAP totaling $846,000and $1,683,000for the years ended December 31, 2012 and 2011, respectively, which are not taken into account when computing REIT taxable income or loss. During 2012, a GAAP financial statement realized losson MBS of $308,000 was recorded compared to a gain of $410,000 for 2011. For tax purposes, realized capital gains for the years ended December 31, 2012 and 2011 were $1,056,000 and $85,000, respectively.From inception through February 20, 2013, all of the tax results and other tax attributes of the Company are combined with the tax results of Bimini, as the Company's tax status during that period was as a “qualified REIT subsidiary” of Bimini.

Bimini and Orchid will generally not be subject to federal income tax on their REIT taxable income to the extent that Bimini distributes its REIT taxable income to its stockholders and satisfies the ongoing REIT requirements, including meeting certain asset, income and stock ownership tests. Bimini must have maintained its REIT status during the period Orchid was a qualified REIT subsidiary for Orchid to qualify as a REIT. A REIT must generally distribute at least 90% of its REIT taxable income to its stockholders, of which 85% generally must be distributed within the taxable year, in order to avoid the imposition of an excise tax. The remaining balance may be distributed up to the end of the following taxable year, provided the REIT elects to treat such amount as a prior year distribution and meets certain other requirements. At December 31, 2012, management believes that Bimini and Orchid have complied with the Code requirements and that Bimini continues to qualify as a REIT.