INCOME TAXES AND RELATED PAYMENTS

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES AND RELATED PAYMENTS

INCOME TAXES AND RELATED PAYMENTS

The Company is a publicly traded partnership and holds interest in Oaktree Capital I (a non-corporate entity that is not subject to U.S. federal corporate income tax). As a result of the 2024 Restructuring, effected to facilitate the change of the general partner of Oaktree Capital I, the Company no longer controls Oaktree Capital I.

Income tax expense from operations consisted of the following:  

	Year Ended December 31,
	2024		2023		2022
Current:
Foreign income tax	$	—	$	—	$	15,290
	$	—	$	—	$	15,290
Deferred:
Foreign income tax	$	—	$	—	$	(359)
	$	—	$	—	$	(359)
Total:
Foreign income tax	$	—	$	—	$	14,931
Income tax expense	$	—	$	—	$	14,931

The Company’s income (loss) before income taxes consisted of the following:

	Year Ended December 31,
	2024		2023		2022
Domestic income (loss) before income taxes	$	787,062	$	540,166	$	437,779
Foreign income (loss) before income taxes	—		—		40,242
Total income (loss) before income taxes	$	787,062	$	540,166	$	478,021

The Company’s effective tax rate differed from the federal statutory rate for the following reasons:

	Year Ended December 31,
	2024		2023		2022
Income tax expense at federal statutory rate	—	%	—	%	21.00	%
Income passed through	—		—		(19.23)
Foreign taxes	—		—		1.35
Total effective rate	—	%	—	%	3.12	%

When assessing the realizability of deferred tax assets, the Company considers whether it is probable that some or all of the deferred tax assets will not be realized. In determining whether the deferred tax assets are realizable, the Company considers the period of expiration of the tax asset, historical and projected taxable income, and tax liabilities for the tax jurisdiction in which the tax asset is located. The deferred tax asset recognized by the Company, as it relates to the higher tax basis in the carrying value of certain assets compared to the book basis of those assets, will be recognized in future years by these taxable entities. Deferred tax assets are based on the amount of the tax benefit that the Company’s management has determined is more likely than not to be realized in future periods. In determining the realizability of this tax benefit, management considered numerous factors that will give rise to pre-tax income in future periods. Among these are the historical and expected future book and tax basis pre-tax income of the Company and unrealized gains in the Company’s assets at the determination date. All deferred tax assets related to OCM Cayman were deconsolidated as part of the 2022 Restructuring.

The Company recognizes tax benefits related to its tax positions only where the position is “more likely than not” to be sustained in the event of examination by tax authorities. As part of its assessment, the Company analyzes its tax filing positions in all of the federal, state and foreign tax jurisdictions where it is required to file income tax returns, and for all open tax years in these jurisdictions. All income tax reserve balances related to OCM Cayman were deconsolidated as part of the 2022 Restructuring. As of December 31, 2024, 2023 and 2022, the Company had no unrecognized tax benefits.

The Company recognizes interest and penalties related to unrecognized tax positions in the provision for income taxes in the consolidated statements of operations.  As of December 31, 2024 and 2023, there were no aggregate amount of interest and penalties accrued.  The Company recognized no expense in 2024, 2023, and 2022.

The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by the relevant tax authorities. With limited exceptions, the Company is no longer subject to income tax audits by taxing authorities for periods before 2021. The Company believes that it has adequately provided for any reasonably foreseeable outcomes related to its tax examinations and that any settlements related thereto will not have a material adverse effect on the Company’s consolidated financial statements; however, there can be no assurances as to the ultimate outcomes.