Company: TWO-PC
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0001465740-25-000083
Chunk: 103

Company: TWO HARBORS INVESTMENT CORP.
Filing Date: 2025-02-18
Form: 10-K
Item: Item 7
Chunk 103
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 101.8 Net realized gains and losses on sales of RMBS— (1.1)(1.1)Net realized gains and losses on sales of MSR0.2 (27.3)(27.1)Credit loss impairment— (0.5)(0.5)Other temporary differences4.0 26.3 30.3 Capital loss carryforward deferral— 331.2 331.2 Net operating loss carryforward utilization(66.6)(51.5)(118.1)Estimated taxable income16.7 245.4 262.1 Dividend paid deduction— (245.4)(245.4)Estimated taxable post-dividend paid deduction$16.7 $— $16.7 

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The permanent differences recorded in 2024 and 2023 were primarily due to dividends paid from the Company’s TRSs to the REIT as well as differences related to officer’s compensation deduction limitations, compensation expense related to restricted stock dividends and vesting, the dividends paid deduction for tax, amortization of goodwill for tax, and state taxes, net of federal benefit in the Company’s TRSs. The temporary tax differences recorded in 2024 and 2023 were principally timing differences between U.S. GAAP and tax accounting related to unrealized gains and losses from derivative instruments, realized and unrealized gains and losses from MSR and RMBS, accretion and amortization from RMBS, litigation expenses, changes in reserves related to servicing advances and allowance for credit losses on certain RMBS, deferral of net capital losses and utilization of net operating losses. 

Change in Accumulated Other Comprehensive Loss 

With our accounting treatment for AFS securities, unrealized fluctuations in the market values of AFS securities, excluding certain AFS securities for which we have elected the fair value option, do not impact our GAAP net (loss) income or taxable income but are recognized on our consolidated balance sheets as a change in stockholders’ equity under “accumulated other comprehensive loss.” As a result of this fair value accounting through stockholders’ equity, we expect our net income to have less significant fluctuations and result in less U.S. GAAP to taxable income timing differences than if the portfolio were accounted for as trading instruments.

Dividends 

For the year ended December 31, 2024, we declared cash dividends totaling $1.80 per common share. As a REIT, we are required to distribute at