Income Taxes

6 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

As a result of the Merger described in Footnote 4, and effective April 20, 2024, the Company is included in the Sekisui House US Holdings (parent of SH Residential Holdings, LLC) consolidated tax group for U.S. federal income tax purposes. Although the Company’s post-merger results are included in the Sekisui House consolidated return, our income tax provision is calculated primarily as though we were a separate taxpayer for the full year. However, under certain circumstances, transactions between the Company and Sekisui House are assessed using consolidated tax return rules and any difference in liability between the separate company method will be addressed in a future tax sharing arrangement.

Our overall effective income tax rates were 42.1% and 28.7% for the three and six months ended June 30, 2024 and 17.3% and 21.5% for the three and six months ended June 30, 2023, respectively. The rates for the three and six months ended June 30, 2024 resulted in an income tax expense of $18.3 million and $48.7 million, respectively, compared to $19.6 million and $47.8 million for the three and six months ended June 30, 2023, respectively. The year-over-year increase in the effective tax rates for the three and six months ended June 30, 2024, is primarily due to non-deductible executive compensation, and non-deductible transaction costs and excise taxes related to the Merger.