INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of Taxable Income Reconciliation

The following table reconciles the Company’s TRS GAAP net income (loss) to taxable income (in thousands):



	Year Ended December 31,
	2018		2017
	(in thousands)		(in thousands)
GAAP consolidated net income (loss) attributable to Hunt Companies Finance Trust, Inc.	(3,950	)	4,707
GAAP net loss (income) from REIT operations	5,241		(4,645	)
GAAP net income (loss) of taxable subsidiary	1,291		62
Capitalized transaction fees	(41	)	(41	)
Unrealized gain (loss)	(20	)	639
Deferred income	(222	)	19
Tax income (loss) of taxable subsidiary before utilization of net operating losses	1,008		679
Utilizations of net operating losses	(288	)	(679	)
Net tax income of taxable subsidiaries	720		—

Schedule of Effective Income Tax Rate Reconciliation

The following is a reconciliation of the statutory federal and state tax rates to the effective rates, for the years ended December 31, 2018 and 2017:



	Year Ended December 31,
	2018		2017
	(in thousands)		(in thousands)
U.S. Federal Statutory Income Tax	(830	)	1,601
State Taxes	61		1
REIT loss (income) not subject to federal income tax	1,101		(1,579	)
Tax effect of U.S. corporate rate change	—		364
REIT Testing Income Tax⁽¹⁾	1,956
Valuation Allowance	(767	)	(406	)
Total income tax provision (benefit)	1,522		(19	)
Effective income tax rate	(38.50	)%	0.41	%

Schedule of Deferred Tax Assets

The TRS has a deferred tax asset (liability), comprised of the following (in thousands):



	As of December 31, 2018	As of December 31, 2017
Accumulated net operating losses of TRS	263	337
Unrealized gain (loss)	245	251
Capitalized transaction costs	112	122
Deferred income	—	57
AMT Credit	—	19
Deferred tax asset	620	786
Valuation allowance	—	(767	)
Net non-current deferred tax asset (liability)	620	19