INCOME TAXES

6 Months Ended

Jun. 30, 2020

Income tax expense (benefit) consists of the following:


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Current:
Federal	$	(7,877)	$	—	$	(7,877)	$	(413)
State and Local	9		22		58		101
Total Current Income Tax Expense (Benefit)	(7,868)		22		(7,819)		(312)
Deferred:
Federal	20,304		(16,999)		(107,221)		20,147
State and Local	4,973		(4,600)		(34,419)		4,585
Total Deferred Income Tax Expense (Benefit)	25,277		(21,599)		(141,640)		24,732
Total Income Tax (Benefit) Expense	$	17,409	$	(21,577)	$	(149,459)	$	24,420

New Residential intends to qualify as a REIT for each of its tax years through December 31, 2020. A REIT is generally not subject to U.S. federal corporate income tax on that portion of its income that is distributed to stockholders if it distributes at least 90% of its REIT taxable income to its stockholders by prescribed dates and complies with various other requirements.

New Residential operates various securitization vehicles and has made certain investments, particularly its investments in MSRs (Note 5), Servicer Advance Investments (Note 6) and REO (Note 8), through taxable REIT subsidiaries (“TRSs”) that are subject to regular corporate income taxes which have been provided for in the provision for income taxes, as applicable.

New Residential has recorded a net deferred tax asset of approximately $148.7 million as of June 30, 2020, primarily related to unrealized losses and net operating loss carry forwards.

On March 27, 2020, the CARES Act was signed into law. The CARES Act provides economic relief to eligible businesses and individuals impacted by the COVID-19 pandemic and includes numerous tax provisions, such as the ability to carryback net operating losses to prior tax years. Pursuant to this new legislation, the Company filed a claim to carryback $23 million of net operating losses, resulting in a net tax benefit of $3 million. The Company is continuing to monitor and evaluate the impact of the CARES Act and other COVID-19-related legislation.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details