Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income TaxesProvision for Federal Income Taxes

We are subject to federal income tax, but we are exempt from state and local income taxes. The following table displays

the components of our provision for federal income taxes.

	For the Year Ended December 31,
	2024	2023	2022
	(Dollars in millions)
Current income tax benefit (provision)	$(3,154)	$(3,317)	$(3,505)
Deferred income tax benefit (provision)(1)	(1,137)	(1,231)	195
Provision for federal income taxes	$(4,291)	$(4,548)	$(3,310)

(1)Amount excludes the current income tax effect of items recognized directly in “Total stockholders' equity.”

The following table displays the difference between the statutory corporate tax rate and our effective tax rate.

	For the Year Ended December 31,
	2024			2023			2022
Statutory corporate tax rate		21.0	%		21.0	%		21.0	%
Research tax credits		(0.3)			(0.2)			(1.5)
Equity investments in affordable housing projects		(0.3)			(0.2)			(0.1)
Valuation allowance		(0.1)			0.1			0.7
Other		(0.1)			—			0.3
Effective tax rate		20.2	%		20.7	%		20.4	%

Our effective tax rate is the provision for federal income taxes expressed as a percentage of income or loss before

federal income taxes. Our effective tax rates for the years 2024, 2023, and 2022 were impacted by benefits for research

tax credits, investments in housing projects eligible for low-income housing tax credits, and changes in the valuation

allowance against our capital loss carryforward tax asset.

Deferred Tax Assets and Liabilities

We evaluate our deferred tax assets for recoverability using a consistent approach which considers the relative impact

of negative and positive evidence, including our historical profitability and projections of future taxable income. Our

framework for assessing the recoverability of deferred tax assets requires us to weigh all available evidence, to the

extent it exists, including:

•the sustainability of recent profitability required to realize the deferred tax assets;

•the cumulative net income or losses in our consolidated statements of operations and comprehensive income

in recent years;

•unsettled circumstances that, if unfavorably resolved, would adversely affect future operations and profit levels

on a continuing basis in future years;

•the funding available to us under the senior preferred stock purchase agreement;

•the carryforward period for capital losses; and

•tax planning strategies.

Based on all positive and negative evidence available as of December 31, 2024, we concluded that it is more likely than

not that our deferred tax assets will be realized, except the deferred tax asset relating to capital loss carryforwards. For

the deferred tax asset relating to capital loss carryforwards, we concluded that the negative evidence outweighed the

positive evidence, and it is more likely than not that these capital loss carryforwards will not be utilized during the

allowable five-year carryforward period, which will expire in 2027 and 2028 if unused. Therefore, a valuation allowance

has been recorded against our capital loss carryforward deferred tax asset, which is included in “Other, net” in the table

below.

The following table displays our deferred tax assets and deferred tax liabilities.

	As of December 31,
	2024		2023
	(Dollars in millions)
Deferred tax assets:
Mortgage and mortgage-related assets		$5,060		$5,944
Allowance for loan losses and basis in acquired property, net		1,392		1,571
Derivative instruments		291		766
Partnership and other equity investments		9		21
Interest-only securities		3,982		3,801
Other, net		749		617
Total deferred tax assets		11,483		12,720
Deferred tax liabilities:
Debt instruments		811		894
Valuation allowance		(127)		(145)
Deferred tax assets, net		$10,545		$11,681