Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company incurs income tax expense (benefit) related to its Taxable Subsidiaries. The components of income tax expense (benefit) were as follows during the quarter and nine months ended September 30, 2022 and 2021 (in thousands):

	Quarter Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Current tax expense	$	128	$	985	$	244	$	1,125
Deferred tax (benefit) expense	(357)		500		226		519
Total income tax expense	$	(229)	$	1,485	$	470	$	1,644

The effective tax rate for the nine months ended September 30, 2022 and 2021 was 1.2% and 4.2%, respectively. The primary items giving rise to the difference between the 21.0% federal statutory rate applicable to corporations and the effective tax rates are due to state taxes and the benefits of the partnership structure.

Significant components of the Company’s deferred tax assets and liabilities as of September 30, 2022 and December 31, 2021 were as follows (in thousands):

	September 30, 2022		December 31, 2021
Deferred tax assets:
Carryforwards for net operating loss	$	803	$	533
Other	30		18
Valuation Allowance	(40)		(22)
Total deferred tax assets	793		529
Deferred tax liabilities:
Unrealized appreciation on investments	(2,896)		(2,406)
Total deferred tax liabilities	(2,896)		(2,406)
Deferred tax liabilities, net	$	(2,103)	$	(1,877)