INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

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,
	2019	2018
	(in thousands)	(in thousands)
GAAP consolidated net income (loss) attributable to Hunt Companies Finance Trust, Inc.	6,205	(3,950)
GAAP net loss (income) from REIT operations	(5,555)	5,241
GAAP net income (loss) of taxable subsidiary	650	1,291
Capitalized transaction fees	(41)	(41)
Unrealized gain (loss)	1,298	(20)
Deferred income	—	(222)
Taxable income (loss) of taxable subsidiary before utilization of net operating losses	1,907	1,008
Utilization of net operating losses	(571)	(288)
Current state tax expense	2	—
Net taxable income of taxable subsidiaries	1,338	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, 2019 and 2018:


	Year Ended December 31,
	2019		2018
	(in thousands)		(in thousands)
U.S. Federal Statutory Income Tax	1,303		(830)
State Taxes	(2)		61
REIT loss (income) not subject to federal income tax	(1,166)		1,101
Tax effect of state corporate rate change	(179)		—
REIT Testing Income Tax⁽¹⁾	—		1,956
Valuation Allowance	—		(767)
Total income tax (benefit) provision	(44)		1,522
Effective income tax rate	(0.71)	%	(38.50)	%

(1)Please see REIT Testing and Tax on 75% Income Test Failure

Schedule of Deferred Tax Assets

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


	As of December 31, 2019	As of December 31, 2018
Accumulated net operating losses of TRS	137	263
Unrealized gain (loss)	686	245
Capitalized transaction costs	120	112
Deferred tax asset	943	620
Valuation allowance	—	—
Net non-current deferred tax asset (liability)	943	620