KKR Real Estate Finance Trust Inc.KREF

KKR Real Estate Finance Trust Inc. Income Taxes Disclosure

10-KFiled Feb 3, 20262 min read
Income Taxes
KREF has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with its taxable year ended December 31, 2014. A REIT is generally not subject to U.S. federal and state income tax on that portion of its income that is distributed to stockholders if it distributes at least 90% of its REIT taxable income, determined without regard to the deduction for dividends paid and excluding any net capital gains. A REIT will also be subject to a nondeductible excise tax to the extent certain percentages of its taxable income are not distributed within specified dates. While KREF expects to distribute at least 90% of its net taxable income for the foreseeable future, KREF will continue to evaluate its capital and liquidity needs in light of existing economic and market conditions.

KREF consolidates subsidiaries that incur U.S. federal, state and local income taxes, based on the tax jurisdiction in which each subsidiary operates. During the years ended December 31, 2025, 2024 and 2023, KREF recorded income tax expense of ($0.2) million, $0.2 million and $0.7 million, respectively, related to the operations of its taxable REIT subsidiaries and various other state and local taxes. There were no material deferred tax assets or liabilities as of December 31, 2025 and December 31, 2024.
Common stock distributions treated as dividends for tax purposes were taxable as follows:

YearOrdinary
Dividends		Qualified
Dividends		Long Term
Capital Gain		Return of
Capital
202563.2 %— %— %36.8 %
2024— — — 100.0 
202391.5 — — 8.5 

Historical Timeline

Fiscal YearFiled
2025Feb 3, 2026Showing above
2024Feb 3, 2025
2023Feb 6, 2024
2022Feb 7, 2023
2021Feb 8, 2022
2020Feb 16, 2021
2019Feb 19, 2020
2018Feb 20, 2019
2017Feb 28, 2018

About Income Taxes Disclosures

The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.

Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.

Other Available Disclosures

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