INCOME TAXES

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 10. INCOME TAXES

The Company will generally not be subject to U.S. federal income tax on its REIT taxable income to the extent that it distributes its

REIT taxable income to its stockholders and satisfies the ongoing REIT requirements, including meeting certain asset, income and stock

ownership tests. A REIT must generally distribute at least 90% of its REIT taxable income, determined without regard to the deductions for

dividends paid and excluding net capital gain, to its stockholders, annually to maintain REIT status. An amount equal to the sum of 85% of

its REIT ordinary income and 95% of its REIT capital gain net income, plus certain undistributed income from prior taxable years, 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.

REIT taxable income (loss) is computed in accordance with the Code, which is different than the Company’s financial statement net

income (loss) computed in accordance with GAAP. Book to tax differences primarily relate to the recognition of interest income on RMBS,

unrealized gains and losses on RMBS, and the amortization of losses on derivative instruments that are treated as hedges for tax

purposes.

As of December 31, 2021, we had distributed all of our estimated REIT taxable income through fiscal year 2021. Accordingly, no

income tax provision was recorded for 2021, 2020 and 2019.