INCOME TAXES

6 Months Ended

Jun. 30, 2025

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,
	2025		2024		2025		2024
Current:
Federal	$	712	$	1,138	$	7,267	$	1,750
State and local	172		2,130		369		2,527
Foreign	1,371		1,928		11,984		3,704
Total current income tax expense	2,255		5,196		19,620		7,981
Deferred:
Federal	(6,311)		39,219		(36,669)		115,672
State and local	(7,444)		6,698		(16,740)		19,934
Foreign	(98)		535		(1,739)		1,473
Total deferred income tax expense (benefit)	(13,853)		46,452		(55,148)		137,079
Total Income Tax Expense (Benefit)	$	(11,598)	$	51,648	$	(35,528)	$	145,060

Rithm Capital intends to qualify as a REIT for each of its tax years through December 31, 2025. 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 Origination and Servicing, Asset Management and portions of the Investment Portfolio, through TRSs that are subject to regular corporate income taxes, which have been provided for in the provision for income taxes, as applicable.

As of June 30, 2025, Rithm Capital recorded a net deferred tax liability of $732.2 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, offset partially by deferred tax assets related to net operating losses and tax deductible goodwill. The net deferred tax liability is reported within accrued expenses and other liabilities in the consolidated balance sheets.

In assessing the realizability of deferred tax assets, Rithm Capital considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible. The valuation allowance as of June 30, 2025 was $78.3 million.