INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

Schedule of Effective Income Tax Rate Reconciliation

The Company’s effective tax rate differs substantially from statutory federal income tax rates primarily due to the benefit of Capstead REIT’s status as a REIT, along with other items affecting the Company’s effective tax rate as illustrated below for the indicated periods (in thousands):

	Year ended December 31
	2016			2015			2014
Income taxes computed at the federal statutory rate	$	29,005		$	37,914		$	49,287
Benefit of REIT status		(29,003	)		(37,913	)		(49,283	)
Income taxes computed on income of Capstead’s sole    taxable REIT subsidiary		2			1			4
Change in net deferred income tax assets		(2	)		(1	)		(4	)
Income tax provision	$	–		$	–		$	–

Components of Deferred Tax Assets and Liabilities

Significant components of the Company’s taxable REIT subsidiary’s deferred income tax assets and liabilities were as follows as of the indicated dates (in thousands):

	December 31
	2016		2015
Deferred income tax assets:
Alternative minimum tax credit (a)	$	1,941	$	1,941
Net operating loss carryforwards (b)		55		57
Other		20		20
		2,016		2,018
Deferred income tax liabilities		–		–
Net deferred tax assets	$	2,016	$	2,018
Valuation allowance (c)	$	2,016	$	2,018

(a) Alternative minimum tax credit carryforwards can be utilized to offset payment of federal income taxes on future taxable income, if any, earned by this subsidiary, subject to certain limitations.

(b) Excludes $3.5 million in remaining net operating loss carryforwards which expire beginning after 2019.  Should these carryforwards be utilized, they will be excluded for purposes of calculating the Company’s provision for income taxes.  Any such utilization will, however, reduce actual taxes payable.

(c) Because this subsidiary is not expected to earn significant amounts of taxable income, related net deferred tax assets are fully reserved at December 31, 2016.