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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2024

Schedule of Income Tax Expense (Benefit)

Income tax expense (benefit) consists of the following:


	Year Ended December 31,
	2024		2023		2022
Current:
Federal	$	1,283	$	5,030	$	4,253
State and local	1,897		416		4,096
Foreign	9,735		377		—
Total current income tax expense	12,915		5,823		8,349
Deferred:
Federal	174,306		76,380		227,825
State and local	80,917		39,430		43,342
Foreign	(821)		526		—
Total deferred income tax expense	254,402		116,336		271,167
Total Income Tax Expense	$	267,317	$	122,159	$	279,516

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,
	2024		2023		2022
Provision at the statutory rate	21.00	%	21.00	%	21.00	%
Non-taxable REIT income	(7.67)	%	(11.14)	%	(3.36)	%
State and local taxes	4.62	%	3.71	%	4.05	%
Foreign income taxes	0.73	%	0.21	%	—	%
Change in state tax rate	2.71	%	1.14	%	—	%
Foreign tax credits	(0.75)	%	—	%	—	%
Change in valuation allowance	0.57	%	0.82	%	—	%
Other	0.79	%	0.74	%	0.44	%
Total Provision	22.00	%	16.48	%	22.13	%

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,
	2024		2023
Deferred Tax Assets:
Net operating losses and tax credit carryforwards(A)	$	226,781	$	169,907
Basis differences related to assets and investments	77,985		90,395
Goodwill	186,027		202,023
Fixed asset depreciation	19,658		2,536
Accrued expenses	58,467		47,086
Other	4,204		5,822
Total deferred tax assets	573,122		517,769
Less: valuation allowance	(34,784)		(34,563)
Net deferred tax assets	538,338		483,206

Deferred Tax Liabilities:
Mortgage servicing rights	(1,239,428)		(923,311)
Basis differences related to assets and investments	(81,369)		(81,061)


Other	(3,682)		(1,672)
Total deferred tax liability	(1,324,479)		(1,006,044)

Net Deferred Tax Liabilities	$	(786,141)	$	(522,838)

(A)As of December 31, 2024, Rithm Capital’s TRSs had approximately $826.8 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 $433.6 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 2028 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:


Balance at December 31, 2022	$	—
Sculptor Acquisition (Note 3)	32,340
Net change	2,223
Balance at December 31, 2023	34,563
Net Change	221
Balance at December 31, 2024	$	34,784

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
2024(A)	$	1.00	100.00	%	—	%	—	%
2023(B)	1.25		100.00	%	—	%	—	%
2022(C)	0.41		41.47	%	—	%	58.53	%

(A)The entire $0.25 per share dividend declared in December 2024 and paid in January 2025 is treated as received by stockholders in 2024.

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

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

Series A Preferred stock distributions were as follows:


Year	Dividends per Share		Ordinary Income		Long-Term Capital Gain		Return of Capital
2024(A)	$	2.12	100	%	—	%	—	%
2023(B)	1.88		100	%	—	%	—	%
2022(C)	1.88		100	%	—	%	—	%

(A)The entire $0.68 per share dividend declared in December 2024 and paid in January 2025 is treated as received by stockholders in 2025.

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

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

Series B Preferred stock distributions were as follows:


Year	Dividends per Share		Ordinary Income		Long-Term Capital Gain		Return of Capital
2024(A)	$	2.04	100	%	—	%	—	%
2023(B)	1.78		100	%	—	%	—	%
2022(C)	1.78		100	%	—	%	—	%

(A)The entire $0.67 per share dividend declared in December 2024 and paid in January 2025 is treated as received by stockholders in 2025.

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

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

Series C Preferred stock distributions were as follows:


Year	Dividends per Share		Ordinary Income		Long-Term Capital Gain		Return of Capital
2024(A)	$	1.59	100	%	—	%	—	%
2023(B)	1.59		100	%	—	%	—	%
2022(C)	1.59		100	%	—	%	—	%

(A)The entire $0.40 per share dividend declared in December 2024 and paid in January 2025 is treated as received by stockholders in 2025.

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

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

Series D Preferred stock distributions were as follows:


Year	Dividends per Share		Ordinary Income		Long-Term Capital Gain		Return of Capital
2024(A)	$	1.75	100	%	—	%	—	%
2023(B)	1.75		100	%	—	%	—	%
2022(C)	1.75		100	%	—	%	—	%

(A)The entire $0.44 per share dividend declared in December 2024 and paid in January 2025 is treated as received by stockholders in 2025.

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

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