INCOME TAXES

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Income tax expense (benefit) consists of the following:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Current:
Federal	$	(1,199)	$	(6,694)	$	—	$	4,119
State and local	(222)		(1,348)		45		868
Total current income tax expense (benefit)	(1,421)		(8,042)		45		4,987
Deferred:
Federal	62,330		5,843		231,566		77,152
State and local	11,781		1,122		43,868		15,043
Total deferred income tax expense	74,111		6,965		275,434		92,195
Total income tax expense (benefit)	$	72,690	$	(1,077)	$	275,479	$	97,182

Rithm Capital intends to qualify as a REIT for each of its tax years through December 31, 2022. A REIT is generally not subject to U.S. federal corporate income tax on that portion of its income that is distributed to stockholders if it distributes at least 90% of its REIT taxable income to its stockholders by prescribed dates and complies with various other requirements.

Rithm Capital operates various business segments, including servicing, origination, and MSR related investments, through taxable REIT subsidiaries (“TRSs”) that are subject to regular corporate income taxes, which have been provided for in the provision for income taxes, as applicable. Refer to Note 3 for further details.

As of June 30, 2022, Rithm Capital recorded a net deferred tax liability of $716.1 million, primarily composed of deferred tax liabilities generated through the deferral of gains from residential mortgage loans sold by the origination business and changes in fair value of MSRs, loans, and swaps held within taxable entities.