INCOME TAXES

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Income tax expense (benefit) consists of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Current:
Federal	$	5,014	$	—	$	5,030	$	—
State and local	185		3		306		48
Total current income tax expense (benefit)	5,199		3		5,336		48
Deferred:
Federal	41,759		18,654		75,822		250,221
State and local	5,627		3,427		11,151		47,294
Total deferred income tax expense	47,386		22,081		86,973		297,515
Total income tax expense (benefit)	$	52,585	$	22,084	$	92,309	$	297,563

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 September 30, 2023, Rithm Capital recorded a net deferred tax liability of $798.2 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.