INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Schedule of Income Tax Expense (Benefit)

Income tax expense (benefit) consists of the following:

	Year Ended December 31,
	2017			2016		2015
Current:
Federal	$	(1,250	)	$	3,813	$	(2,737	)
State and Local	360			252		(1,631		)
Total Current Income Tax Expense (Benefit)	(890		)	4,065		(4,368		)
Deferred:
Federal	148,997			33,999		(2,778		)
State and Local	19,521			847		(3,855		)
Total Deferred Income Tax Expense (Benefit)	168,518			34,846		(6,633		)
Total Income Tax Expense (Benefit)	$	167,628		$	38,911	$	(11,001	)

Schedule of Reported Provision for Income Taxes and the U.S. Federal Statutory Rate

The difference between New Residential’s reported provision for income taxes and the U.S. federal statutory rate of 35% is as follows:

	December 31,
	2017		2016		2015
Provision at the statutory rate	35.00	%	35.00	%	35.00	%
Non-taxable REIT income	(21.72	)%	(28.22	)%	(36.51	)%
State and local taxes	1.76	%	0.18	%	(1.16	)%
Change in valuation allowance	0.85	%	0.67	%	0.01	%
Change in federal tax rate	(0.92	)%	—	%	—	%
Other	(0.17	)%	(0.48	)%	(1.59	)%
Total provision	14.80	%	7.15	%	(4.25	)%

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liability are presented below:

	December 31,
	2017			2016
Deferred tax assets:
Servicer advances basis difference(A)	$	—		$	113,354
Net operating losses and tax credit carryforwards(B)	20,682			44,289
Interest accruals not currently deductible for tax purposes	2,628			16,543
Basis differences for REO and other assets	8,034			—
Other	2,279			5,684
Total deferred tax assets	33,623			179,870
Less valuation allowance	(12,404		)	(10,054		)
Net deferred tax assets	$	21,219		$	169,816
Deferred tax liabilities:
Basis difference for partnership investments	(3,873		)	—
Interest accruals not currently includible in income for tax purposes	(6,979		)	—
Unrealized mark to market	(29,585		)	(18,532		)
Total deferred tax (liability)	$	(40,437	)	$	(18,532	)
Net deferred tax assets (liability)	$	(19,218	)	$	151,284

(A) On April 6, 2015, as a part of the purchase price allocation related to the HLSS Acquisition (Note 1), New Residential recorded an increase to its deferred tax asset of $195.1 million. The deferred tax asset primarily related to the difference in the book basis and tax basis of New Residential’s Servicer Advance Investments and is included as part of the deferred tax asset as of December 31, 2016.

(B) As of December 31, 2017, New Residential’s TRSs had approximately $131.3 million of net operating loss carryforwards for federal and state income tax purposes which may be available to offset future taxable income, if and when it arises. These federal and state net operating loss carryforwards will begin to expire in 2034. The utilization of the net operating loss carryforwards to reduce future income taxes will depend on the TRSs ability to generate sufficient taxable income prior to the expiration of the carryforward period.

Summary of Changes in Deferred Tax Asset Valuation Allowance

The following table summarizes the change in the deferred tax asset valuation allowance:

Valuation allowance at December 31, 2015	$	9,409
Increase related to net operating losses and loan loss reserves	1,303
Other increase (decrease)	(658		)
Valuation allowance at December 31, 2016	10,054
Increase related to net operating losses and loan loss reserves	4,720
Decrease related to changes in tax rates	(3,845		)
Other increase (decrease)	1,475
Valuation allowance at December 31, 2017	$	12,404

Schedule of Taxable Common Stock Distributions

Common stock distributions were taxable as follows:

Year	Dividends per Share		Ordinary Income		Long-term Capital Gain		Return of Capital
2017(A)	$	1.94	66.64	%	7.83	%	25.53	%
2016(B)	1.38		96.13	%	3.87	%	—	%
2015	1.75		92.92	%	7.08	%	—	%

(A) The entire $0.50 per share dividend declared in December 2017 and paid in January 2018 is treated as received by stockholders in 2018.

(B) The entire $0.46 per share dividend declared in December 2016 and paid in January 2017 is treated as received by stockholders in 2017.