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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of Income Tax Expense (Benefit)

Income tax (benefit) expense consists of the following:


	Year Ended December 31,
	2023		2022		2021
Current:
Federal	$	5,030	$	4,253	$	5,556
State and local	416		4,096		1,470
Foreign	377		—		—
Total current income tax expense (benefit)	$	5,823	$	8,349	$	7,026
Deferred:
Federal	76,380		227,825		130,696
State and local	39,430		43,342		20,504
Foreign	526		—		—
Total deferred income tax expense (benefit)	116,336		271,167		151,200
Total income tax expense (benefit)	$	122,159	$	279,516	$	158,226

Schedule of Reported Provision for Income Taxes and the U.S. Federal Statutory Rate

The difference between Rithm Capital’s reported provision for income taxes and the U.S. federal statutory rate of 21.0% is as follows:


	December 31,
	2023		2022		2021
Provision at the statutory rate	21.00	%	21.00	%	21.00	%
Non-taxable REIT income	(11.14)	%	(3.36)	%	(7.38)	%
State and local taxes	3.71	%	4.05	%	3.86	%
Foreign taxes	0.21	%	—	%	—	%
Change in state tax rate	1.14	%	—	%	—	%
Return to provision	—	%	—	%	(1.10)	%
Change in valuation allowance	0.82	%	—	%	—	%
Other	0.74	%	0.44	%	0.05	%
Total provision	16.48	%	22.13	%	16.43	%

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liability are presented below:


	December 31,
	2023		2022
Deferred tax assets:
Net operating losses and tax credit carryforwards(A)	$	169,907	$	23,627
Basis differences related to assets and investments	90,395		32,447
Goodwill	202,023		26,289
Fixed Asset Depreciation	2,536		—
Accrued expenses	47,086		44,572
Other	5,822		1,573
Total deferred tax assets	517,769		128,508
Less: valuation allowance	(34,563)		—
Net deferred tax assets	$	483,206	$	128,508

Deferred tax liabilities:
Mortgage servicing rights	$	(923,311)	$	(791,691)
Basis differences related to assets and investments	(81,061)		(26,832)
Fixed asset depreciation	—		(19,302)

Other	(1,672)		(2,538)
Total deferred tax (liability)	$	(1,006,044)	$	(840,363)

Net deferred tax assets (liability)	$	(522,838)	$	(711,855)

(A)As of December 31, 2023, Rithm Capital’s TRSs had approximately $610.4 million of net operating loss carryforwards for federal and state income tax purposes which may be available to offset future taxable income, if and when it arises. Approximately, $420.9 million of federal and state net operating losses are subject to an annual Internal Revenue Code Section 382 limitation. The federal and state net operating loss carryforwards will begin to expire between 2027 and 2042. The utilization of the net operating loss carryforwards to reduce future income taxes will depend on the TRSs ability to generate sufficient taxable income prior to the expiration of the carryforward period.

Schedule of Changes in Valuation Allowance

The following table presents changes in the Company’s deferred tax asset valuation allowance for the periods indicated:


	December 31,
	2023		2022		2021
Sculptor Acquisition (Note 4)	$	32,340	$	—	$	—
Net change	2,223		—		—
Ending Balance	$	34,563	$	—	$	—

Schedule of Taxable Common Stock Distributions

Common stock distributions were taxable as follows:


Year	Dividends per Share		Ordinary Income		Long-Term Capital Gain		Return of Capital
2023(A)	$	1.25	100.00	%	—	%	—	%
2022(B)	$	0.41	41.47	%	—	%	58.53	%
2021(C)	$	0.50	58.84	%	—	%	41.16	%

(A)The entire $0.25 per share dividend declared in December 2023 and paid in January 2024 is treated as received by stockholders in 2023.

(B)The entire $0.25 per share dividend declared in December 2022 and paid in January 2023 is treated as received by stockholders in 2023.

(C)The entire $0.25 per share dividend declared in December 2021 and paid in January 2022 is treated as received by stockholders in 2022.

Series A Preferred stock distributions were as follows:


Year	Dividends per Share		Ordinary Income		Long-Term Capital Gain		Return of Capital
2023(A)	$	1.88	100	%	—	%	—	%
2022(B)	$	1.88	100	%	—	%	—	%
2021(C)	$	1.88	100	%	—	%	—	%

(A)The entire $0.47 per share dividend declared in December 2023 and paid in January 2024 is treated as received by stockholders in 2024.

(B)The entire $0.47 per share dividend declared in December 2022 and paid in January 2023 is treated as received by stockholders in 2023.

(C)The entire $0.47 per share dividend declared in December 2021 and paid in January 2022 is treated as received by stockholders in 2022.

Series B Preferred stock distributions were as follows:


Year	Dividends per Share		Ordinary Income		Long-Term Capital Gain		Return of Capital
2023(A)	$	1.78	100	%	—	%	—	%
2022(B)	$	1.78	100	%	—	%	—	%
2021(C)	$	1.78	100	%	—	%	—	%

(A)The entire $0.45 per share dividend declared in December 2023 and paid in January 2024 is treated as received by stockholders in 2024.

(B)The entire $0.45 per share dividend declared in December 2022 and paid in January 2023 is treated as received by stockholders in 2023.

(C)The entire $0.45 per share dividend declared in December 2021 and paid in January 2022 is treated as received by stockholders in 2022.

Series C Preferred stock distributions were as follows:


Year	Dividends per Share		Ordinary Income		Long-Term Capital Gain		Return of Capital
2023(A)	$	1.59	100	%	—	%	—	%
2022(B)	$	1.59	100	%	—	%	—	%
2021(C)	$	1.59	100	%	—	%	—	%

(A)The entire $0.40 per share dividend declared in December 2023 and paid in January 2024 is treated as received by stockholders in 2024.

(B)The entire $0.40 per share dividend declared in December 2022 and paid in January 2023 is treated as received by stockholders in 2023.

(C)The entire $0.40 per share dividend declared in December 2021 and paid in January 2022 is treated as received by stockholders in 2022.

Series D Preferred stock distributions were as follows:


Year	Dividends per Share		Ordinary Income		Long-Term Capital Gain		Return of Capital
2023(A)	$	1.75	100	%	—	%	—	%
2022(B)	$	1.75	100	%	—	%	—	%
2021(C)	$	0.28	100	%	—	%	—	%

(A)The entire $0.44 per share dividend declared in December 2023 and paid in January 2024 is treated as received by stockholders in 2024.

(B)The entire $0.44 per share dividend declared in December 2022 and paid in January 2023 is treated as received by stockholders in 2023.

(C)The entire $0.28 per share dividend declared in December 2021 and paid in January 2022 is treated as received by stockholders in 2022.