v3.25.2
Income Taxes
 6 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes
Note 12 - Income Taxes
The following table reconciles our GAAP net loss to estimated REIT taxable income for the three and six months ended June 30, 2025 and June 30, 2024.
 For the Three Months Ended June 30,For the Six Months Ended June 30,
 2025202420252024
GAAP net loss$(75,608)$(48,350)$(48,276)$(33,834)
Book to tax differences:
TRS (income) loss(124)58 (194)99 
Agency Securities(16,545)112,870 (224,802)250,619 
U.S. Treasury Securities2,887 (19,149)15,793 (30,071)
Changes in interest rate contracts155,882 9,444 389,905 (88,293)
Amortization of deferred hedging costs(17,361)(20,935)(33,695)(42,313)
Amortization of deferred Treasury Future gains2,490 4,728 5,577 9,325 
Other15 539 129 1,182 
Estimated REIT taxable income$51,636 $39,205 $104,437 $66,714 
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 June 30, 2025 and December 31, 2024, we had approximately $(207,726) 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 June 30, 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 June 30, 2025 by approximately $347,597, or approximately $3.95 per common share (based on the 88,071 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 and six months ended June 30, 2025 and June 30, 2024 were $63,441 and $38,262 and $120,523 and $76,569, 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.