Income Taxes

12 Months Ended

Dec. 31, 2025

For the year ended December 31, 2025, the Company qualified to be taxed as a REIT under Code Sections 856 through 860. As a REIT, the Company is not subject to U.S. federal income tax to the extent that it makes qualifying distributions of taxable income to its stockholders. To maintain qualification as a REIT, the Company must distribute at least 90% of its annual REIT taxable income (subject to certain adjustments) to its shareholders and meet certain other requirements such as assets it may hold, income it may generate and its shareholder composition. It is generally the Company’s policy to distribute to its shareholders all of the Company’s taxable income.

The state and local tax jurisdictions in which the Company is subject to tax-filing obligations recognize the Company’s status as a REIT and, therefore, the Company generally does not pay income tax in such jurisdictions. The Company may, however, be subject to certain minimum state and local tax filing fees and its TRSs are subject to U.S. federal, state, and local taxes.

The components of income (loss) before income taxes were attributable to the following regions:


			December 31, 2025			December 31, 2024
			(dollars in thousands)


Current Expense (Benefit):
U.S. Federal	$	1,550	$	60
U.S. State and Local	863		(11)
Total Current Income Tax (Benefit) Provision	2,413		49

Deferred Expense (Benefit):
U.S. Federal	(3,705)		—
U.S. State and Local	3,560		—
Total Deferred Income Tax (Benefit) Provision	(145)		—

Total Expense (Benefit):
U.S. Federal	(2,155)		60
U.S. State and Local	4,423		(11)
Total Income Tax (Benefit) Provision	$	2,268	$	49

Income tax expense relates solely to the activities of the Company’s TRSs.

Significant components of the Company’s deferred tax assets and liabilities at December 31, 2025 and December 31, 2024 are as follows:


	December 31, 2025		December 31, 2024
	(dollars in thousands)
Deferred Tax Assets
Reserves	$	1,546	$	—
Accrued Expenses	336		—
Property and Equipment	109		—
Lease Liability	293		—
Nondeductible Interest Expense	4,649		3,604
Net Operating Losses ("NOLs")	97,255		107,089
State Taxes	245		—
Other	135		—
Deferred Tax Assets, Gross	104,568		110,693
Valuation Allowance	(102,182)		(110,693)
Total Deferred Tax Assets, Net	2,386		—

Deferred Tax Liabilities
Right-Of-Use Asset	(293)		—
Intangibles	(24,808)		—
Total Deferred Tax Liabilities	(25,101)		—

Total Deferred Tax Asset (Liability)	$	(22,715)	$	—

A valuation allowance is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of December 31, 2025, the Company has recorded a valuation allowance of $102 million related to certain deferred tax assets of its TRSs. The NOLs and interest disallowed under Code Section 163(j) are subject to an indefinite carryforward period to the extent not utilized.

The following table reconciles the federal statutory income tax rate to the Company’s effective income tax rate for the years ended December 31, 2025 and December 31, 2024:

December 31, 2025

December 31, 2024

(dollars in thousands)


	Amount		Percent		Amount		Percent
US Federal Statutory Income Tax Rate	$	48,881	21.00	%	$	36,984	21.00	%
Domestic Federal Reconciling Items:
Non-Taxable and Nondeductible Items:
Non-Taxable REIT Income	(49,497)		(21.27)	%	(40,571)		(23.03)	%
Unrealized Gain/(Losses)	2,960		1.27	%	—		—
Transaction Costs	2,108		0.91	%	—		—
Changes in Valuation Allowance	(7,302)		(3.14)	%	3,435		1.95	%
Other	1,164		0.50	%	201		0.11	%
State and Local Taxes, Net of Federal Benefit	3,954		1.70	%	—		—
Total	$	2,268	0.97	%	$	49	0.03	%

The effective tax rate for the year ended December 31, 2025 was 0.97%, compared with 0.03% for the year ended December 31, 2024. The effective tax rate for the years ended December 31, 2025 differed from the U.S. federal statutory rate of 21.0% primarily due to the deduction of dividend distributions under Code Section 857(a) and the change in valuation allowance. The effective tax rates for the year ended December 31, 2024 differed from the U.S. federal statutory rate of 21.0% primarily due to the deduction of dividend distributions under Code Section 857(a) and the change in valuation allowance related to the remeasurement of NOLs and non-deductible interest expense carryforwards.

The Company and its TRSs file income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. The Company does not expect have any unrecognized tax benefits and does not expect any changes within the next twelve months. The Company’s U.S. federal, state and local tax returns for the tax years ending on or after December 31, 2022, remain open for examination.

Net cash paid (refunds received) for income taxes consisted of the following:


	December 31, 2025
	(dollars in thousands)
US Federal	$	2,287
State and Local Jurisdictions:
California	1,000
Other*	243
Subtotal	1,243
Total	$	3,530

*The amount of income taxes paid during the year does not meet the five percent disaggregation threshold.

- Definition

The entire disclosure for income tax.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 942
-SubTopic 740
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477617/942-740-50-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480738/235-10-S50-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 740
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478822/944-740-50-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12

Reference 5: http://www.xbrl.org/2003/role/exampleRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 231
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482663/740-10-55-231

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12C
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12B
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477891/740-270-50-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-13

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/740/tableOfContent

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-14

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-21

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-17

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482603/740-30-50-2

+ Details

CHIMERA INVESTMENT CORP 10-K