Income Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Note 13. Income Taxes We have elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with our taxable year ended December 31, 2015 and expect to continue to operate so as to qualify as a REIT. As a result, we will generally not be subject to federal and state income tax on that portion of our income that we distribute to stockholders if we (i) distribute at least 90% of our taxable income, determined without regard to the deduction for dividends paid and excluding any net capital gains, and (ii) comply with certain other requirements to qualify as a REIT. Since Commencement of Operations, we have been in compliance with all REIT requirements and we plan to continue to operate so that we meet the requirements for taxation as a REIT. Therefore, other than amounts relating to our taxable REIT subsidiary (“TRS”), as described below, we have not provided for current income tax expense related to our REIT taxable income for the three and nine months ended September 30, 2026 and 2025, respectively. Additionally, no provision has been made for federal or state income taxes in the accompanying financial statements, as we believe we have met the prescribed requisite requirements. We may use net operating losses carried forward to offset future net taxable income, and therefore reduce our dividend requirements, subject to certain limitations as prescribed by the Internal Revenue Code which may change from time to time. During the nine months ended September 30, 2026 and the year ended December 31, 2025, our Board did not declare any dividends. The timing and amount of any future dividends declared by our Board depend on a variety of factors, including cash generated by operating activities, our financial condition, capital requirements, annual distribution requirements under the REIT provisions of the Internal Revenue Code, and such other factors as our Board deems relevant. Our TRS holds our real estate owned hotel portfolio and is party to an agreement entered into upon the sale of a loan receivable as discussed further in Note 3 - Loan Portfolio - Sales of Loans Receivable. A TRS is a corporation that is owned directly or indirectly by a REIT and has jointly elected with the REIT to be treated as a TRS for tax purposes. Given the TRS’s history of generating taxable losses, we are not able to conclude that it is more likely than not that we will realize the future benefit of the TRS’s deferred tax assets and therefore recorded a full valuation allowance. Given the full valuation allowance, we did not record a provision or benefit for income taxes for the three and nine months ended September 30, 2026 and 2025, and we did not have any deferred tax assets, net of valuation allowances or deferred tax liabilities, net of any valuation allowances as of September 30, 2026 and December 31, 2025. As of September 30, 2026, our gross deferred tax asset and valuation allowance were each $57.6 million. As of September 30, 2025, our gross deferred tax asset and valuation allowance were each $55.6 million. As of December 31, 2025, our gross deferred tax asset and valuation allowance were each $54.8 million. We recognize tax benefits for uncertain tax positions only if it is more likely than not that the position is sustainable based on its technical merits. Interest and penalties on uncertain tax positions, if applicable, are included as a component of the provision for income taxes in our consolidated statements of operations. As of September 30, 2026 and December 31, 2025, we have not recorded any amounts for uncertain tax positions. Our tax returns are subject to audit by taxing authorities. As of the date of this filing, tax years 2023 and onward remain open to examination by major taxing jurisdictions in which we are subject to taxes. |