INCOME TAXES

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Income tax expense (benefit) consists of the following:

	Three Months Ended March 31,
	2023		2022
Current:
Federal	$	17	$	1,199
State and local	22		267
Total current income tax expense (benefit)	39		1,466
Deferred:
Federal	(14,168)		169,236
State and local	(2,677)		32,087
Total deferred income tax expense	(16,845)		201,323
Total income tax expense (benefit)	$	(16,806)	$	202,789

Rithm Capital intends to qualify as a REIT for each of its tax years through December 31, 2023. 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 March 31, 2023, Rithm Capital recorded a net deferred tax liability of $695.0 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.