INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2020

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’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
	2020			2019			2018
Income taxes computed at the federal statutory rate	$	2		$	6		$	10,515
Benefit of REIT status		–			-			(10,512	)
Income taxes computed on income of the Company's taxable REIT subsidiary		2			6			3
Other change in net deferred income tax assets		(2	)		(6	)		(3	)
Income tax (benefit) provision recorded in miscellaneous other revenue (expense)	$	–		$	–		$	–

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
	2020		2019
Deferred income tax assets:
Net operating loss carryforwards ^(a)	$	71	$	24
Other		9		10
		80		34
Deferred income tax liabilities		–		–
Net deferred tax assets	$	80	$	34
Valuation allowance ^(b)	$	80	$	34

(a)	The increase in net operating loss carryforward from 2019 to 2020 is due to a carryforward correction noted in reconciliation against filed tax returns.

(b)	Because this subsidiary is not expected to earn significant amounts of taxable income, related net deferred tax assets are fully reserved at December 31, 2020.