Income Taxes (Tables)

12 Months Ended

Dec. 31, 2024

Income Taxes

Schedule of Income Before Provision for Income Taxes

“Income (loss) before provision for income taxes” as shown in the accompanying Consolidated Statements of Income (Loss) is comprised of the following (in thousands):

	Year Ended December 31,
	2024		2023		2022
Domestic	$	(37,232)	$	(82,690)	$	(25,443)
Foreign		43,432		41,151		43,571
Total	$	6,200	$	(41,539)	$	18,128

Schedule of Components of Provision for Income Taxes

Components of the “Provision for income taxes” in the accompanying Consolidated Statements of Income (Loss) consist of the following (in thousands):

	Year Ended December 31,
	2024		2023		2022
Current
Federal	$	(6,807)	$	1,748	$	696
Foreign		6,529		5,248		6,856
State and local		503		564		2
Total current expense		225		7,560		7,554
Deferred expense
Federal		(649)		39,634		1,039
Foreign		(1,453)		573		(1,522)
State and local		—		9,180		300
Total deferred expense (benefit)		(2,102)		49,387		(183)
Provision for income taxes	$	(1,877)	$	56,947	$	7,371

Schedule of Reconciliation of U.S. Statutory Income Tax Rate to Company's Effective Tax Rate

A reconciliation of the U.S. statutory income tax rate to the Company’s effective tax rate is as follows:

	Year Ended December 31,
	2024			2023			2022
U.S. statutory tax rate		21.0	%		21.0	%		21.0	%
State and local taxes, net of federal benefit		5.7			3.7			2.7
Income attributable to non-controlling interests (a)		(12.7)			(16.3)			(9.3)
Subtotal		14.0	%		8.4	%		14.4	%
Non-creditable foreign and domestic taxes - non-controlling interest (b)(c)		30.7			(4.6)			14.0
Non-creditable foreign taxes - RE/MAX Holdings (c)(d)		8.7			(0.5)			8.1
Foreign derived intangible income deduction		(8.6)			—			—
Other permanent differences		23.3			(3.4)			4.3
Uncertain tax positions		—			2.4			—
Foreign Tax Rate Differential		(2.5)			—			—
162(m) compensation limitation		1.6			—			1.1
Valuation Allowance		(108.0)			(153.1)			—
Effect of permanent difference - adjustment TRA liability		4.8			15.0			—
Other		5.7			(1.3)			(1.2)
		(30.3)	%		(137.1)	%		40.7	%

(a) Given the majority of the Company’s income is generated via a pass-through entity of which the non-controlling interest owns approximately 40%, that proportion of the Company’s income is not subject to U.S. or state income tax rates.

(b) Approximately 40% of foreign taxes paid at the RMCO level and corporate subsidiary taxes are attributable to the non-controlling interest. As a result, these taxes are not creditable against the U.S. taxes of Holdings.

(c) The percentage impact of these items in 2023 switched directionally because the Company’s pre-tax net income changed from positive to negative.

(d) While a portion of foreign taxes are creditable within the U.S. since Canada’s tax rate is higher than the U.S. statutory rate a portion of the tax paid will not be creditable.

Summary of Deferred Tax Assets and Liabilities

The components of the Company’s deferred tax assets and liabilities are summarized as follows (in thousands):

	As of December 31,
	2024		2023
Deferred tax assets
Goodwill, other intangibles and other assets	$	28,322	$	33,897
Settlement charge		1,180		4,011
Imputed interest deduction pursuant to tax receivable agreements		1,987		2,175
Operating lease liabilities		4,398		5,554
Compensation and benefits		5,238		4,414
Allowance for doubtful accounts		1,043		1,401
Contingent consideration liability		315		396
Deferred revenue		3,624		3,952
Foreign tax credit carryforward		14,919		11,358
Net operating loss carryforward		1		2,980
163j business interest limitation carryforward		9,987		5,536
Other		3,497		2,161
Total deferred tax assets		74,511		77,835
Valuation allowance (a)		(69,211)		(72,849)
Total deferred tax assets, net of valuation allowance		5,300		4,986
Deferred tax liabilities
Property and equipment		442		(27)
Goodwill, other intangibles and other assets		(10,888)		(12,543)
Operating lease assets		(2,408)		(3,109)
Other		(894)		(104)
Total deferred tax liabilities		(13,748)		(15,783)
Net deferred tax assets and liabilities	$	(8,448)	$	(10,797)

(a) In 2024 and 2023, a full valuation allowance was recorded against the Company’s deferred tax assets as a result of a combined three-year cumulative loss primarily due to the settlement of the 2023 industry class-action lawsuits.

Schedule of unrecognized tax benefits

Uncertain tax position liabilities represent the aggregate tax effect of differences between the tax return positions and the amounts otherwise recognized in the consolidated financial statements and are recognized in “Income taxes payable” in the Consolidated Balance Sheets. A reconciliation of the beginning and ending amount, excluding interest and penalties is as follows:

	As of December 31,
	2024		2023		2022
Balance, January 1	$	258	$	1,014	$	1,587
Decrease related to prior year tax positions		(228)		(756)		(882)
Increase related to prior period tax positions		—		—		309
Balance, December 31 (a)	$	30	$	258	$	1,014

(a) Excludes accrued interest and penalties of $0.1 million and $0.3 million for the year ended December 31, 2023 and 2022, respectively. As of December 31, 2024, accrued interest and penalties were immaterial. These related interest and penalties are recognized in “Income taxes payable” within the Consolidated Balance Sheets.