v3.25.1
Income Taxes
 3 Months Ended
Mar. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes
Note 12 - Income Taxes
The following table reconciles our GAAP net income to estimated REIT taxable income for the three months ended March 31, 2025 and March 31, 2024.
 For the Three Months Ended March 31,
 20252024
GAAP net income$27,332 $14,516 
Book to tax differences:
TRS (income) loss(71)41 
Agency Securities(208,257)137,749 
U.S. Treasury Securities12,906 (10,922)
Changes in interest rate contracts234,023 (97,737)
Amortization of deferred hedging costs(16,334)(21,378)
Amortization of deferred Treasury Future gains3,087 4,597 
Other114 644 
Estimated REIT taxable income$52,800 $27,510 
Interest rate contracts and futures contracts are treated as hedging transactions for U.S. federal income tax purposes. Unrealized gains and losses on open interest rate contracts are not included in the determination of REIT taxable income. Realized gains and losses on interest rate contracts and futures contracts terminated before their maturity are deferred and amortized over the remainder of the original term of the contract for REIT taxable income. At March 31, 2025 and December 31, 2024, we had approximately $(192,655) and $(189,450), respectively, of net deductible expense relating to previously terminated interest rate swap and treasury futures/shorts contracts amortizing through the year 2035 and 2034, respectively. At March 31, 2025, we had $257,341 of net operating loss carryforwards available for use indefinitely.
Net capital losses realizedAmountAvailable to offset capital gains through
2021$(15,606)2026
2022$(732,477)2027
2023$(472,002)2028
2024$(46,823)2029
The Company's subsidiary, ARMOUR TRS, Inc. has made an election as a taxable REIT subsidiary (“TRS”). As such, the TRS is taxable as a domestic C corporation and subject to federal, state, and local income taxes based upon its taxable income.
The aggregate tax basis of our assets and liabilities was greater than our total Stockholders’ Equity at March 31, 2025 by approximately $234,872, or approximately $2.85 per common share (based on the 82,416 common shares then outstanding). State and federal tax returns for the years 2022 and later remain open and are subject to possible examination.
We are required and intend to timely distribute substantially all of our REIT taxable income in order to maintain our REIT status under the Code. Total dividend payments to stockholders for the three months ended March 31, 2025 and March 31, 2024 were $57,082 and $38,307, respectively.
Our estimated REIT taxable income and dividend requirements to maintain our REIT status are determined on an annual basis. Dividends paid in excess of current tax earnings and profits for the year will generally not be taxable to common stockholders.
Our management is responsible for determining whether tax positions taken by us are more likely than not to be sustained on their merits. We had no material unrecognized tax benefits or material uncertain tax positions for any periods presented.