v3.25.2
Income Taxes
 6 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes

10. Income Taxes

A reconciliation of the statutory federal income tax rate to our effective rate for continuing operations is provided below:

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Statutory federal income tax rate

 

21.0

%

 

 

21.0

%

 

 

21.0

%

 

 

21.0

%

State income taxes, net of federal income tax

 

2.4

 

 

 

2.5

 

 

 

2.4

 

 

 

2.5

 

Stock-based compensation windfall benefit

 

(0.7

)

 

 

(2.3

)

 

 

(1.4

)

 

 

(3.2

)

Permanent differences and other

 

—

 

 

 

0.1

 

 

 

(0.4

)

 

 

0.7

 

 

 

22.7

%

 

 

21.3

%

 

 

21.6

%

 

 

21.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

We base our estimate of deferred tax assets and liabilities on current tax laws and rates. In certain cases, we also base our estimate on business plan forecasts and other expectations about future outcomes. Changes in existing tax laws or rates could affect our actual tax results, and future business results may affect the amount of our deferred tax liabilities or the valuation of our deferred tax assets over time. Due to uncertainties in the estimation process, particularly with respect to changes in facts and circumstances in future reporting periods, as well as the residential homebuilding industry’s cyclicality and sensitivity to changes in economic conditions, it is possible that actual results could differ from the estimates used in previous analyses. These differences could have a material impact on our consolidated results of operations or financial position.

On July 4, 2025, H.R.1 - One Big Beautiful Bill (“the Bill”) was enacted into law. The Bill makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. ASC 740, “Income Taxes”, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. Accordingly, the Company will evaluate deferred tax balances under the newly enacted tax law and identify other changes required to its consolidated financial statements for the period ended September 30, 2025.