| Income Taxes |
Note 11. Income Taxes Prior to July 1, 2024, the Company was not subject to federal or state income taxes as its income and losses are includable in the tax returns of its members. The Company was required to file returns and pay tax in various state and local jurisdictions as a result of its operations or residency. Accordingly, the Company was subject to New York City unincorporated business income tax (“UBT”) and annual limited liability company fees in New York and Delaware. On July 1, 2024, the Company filed to convert from an LLC to a C-Corp for federal and state income taxes. As a result, the Company recognized a deferred income tax expense of $59.7 million related to deferred taxes associated with the basis differences for certain assets, principally unrealized gains in various marketable securities, private funds and digital assets. The provision for income tax for the years ended December 31, 2025 and 2024 are as follows:
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2025 |
|
|
Year Ended December 31, 2024 |
|
Current provision: |
|
|
|
|
|
|
Federal |
|
$ |
5,582 |
|
|
$ |
7,575 |
|
State |
|
|
537 |
|
|
|
4,560 |
|
Total current provision |
|
|
6,119 |
|
|
|
12,135 |
|
Deferred provision (benefit): |
|
|
|
|
|
|
Federal |
|
|
(11,121 |
) |
|
|
61,739 |
|
State |
|
|
(18,217 |
) |
|
|
30,409 |
|
Total deferred provision (benefit) |
|
|
(29,338 |
) |
|
|
92,148 |
|
Provision (benefit): |
|
|
|
|
|
|
Federal |
|
|
(5,539 |
) |
|
|
69,412 |
|
State |
|
|
(17,680 |
) |
|
|
34,969 |
|
Total (benefit from) provision for income taxes |
|
$ |
(23,219 |
) |
|
$ |
104,381 |
|
Income tax expense at the statutory tax rate is reconciled to the overall income tax expense for the year ended December 31, 2025 is as follows:
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2025 |
|
|
|
% |
|
|
$ |
|
Federal income tax from continuing operations at statutory rates |
|
|
21.0 |
% |
|
$ |
(3,343 |
) |
State income taxes, net of federal tax effect |
|
|
103.7 |
% |
|
|
(16,506 |
) |
Non-deductible permanent items: |
|
|
|
|
|
|
Executive compensation |
|
|
(1.2 |
)% |
|
|
199 |
|
Other permanent differences |
|
|
0.7 |
% |
|
|
(109 |
) |
Other: |
|
|
|
|
|
|
Income passed through to non-controlling interests |
|
|
1.2 |
% |
|
|
(185 |
) |
Other |
|
|
20.6 |
% |
|
|
(3,275 |
) |
Provision for (benefit from) income taxes |
|
|
145.9 |
% |
|
$ |
(23,219 |
) |
The state income tax rate reconciliation category primarily reflects taxes imposed by the states in which the Company operates, primarily attributable to Wisconsin and other state jurisdictions. Income tax expense at the statutory tax rate is reconciled to the overall income tax expense for the year ended December 31, 2024 is as follows:
|
|
|
|
|
|
|
Year Ended December 31, 2024 |
|
Federal income tax from continuing operations at statutory rates |
|
|
21.0 |
% |
Income prior to C-Corporation conversion |
|
|
(1.1 |
)% |
Income passed through to non-controlling interests |
|
|
(16.4 |
)% |
State income taxes, net of federal tax effect |
|
|
1.6 |
% |
Permanent differences |
|
|
0.0 |
% |
Conversion to C-Corporation status |
|
|
6.6 |
% |
Other |
|
|
(0.1 |
)% |
Provision for income taxes |
|
|
11.6 |
% |
The net deferred tax assets and liabilities as of December 31, 2025 and 2024 are comprised of the following:
|
|
|
|
|
|
|
|
|
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
Deferred tax assets: |
|
|
|
|
|
|
Net operating loss carryforwards |
|
$ |
4,412 |
|
|
$ |
3,827 |
|
Operating lease liabilities |
|
|
2,186 |
|
|
|
1,604 |
|
Other |
|
|
1,249 |
|
|
|
1,106 |
|
Total deferred tax assets |
|
|
7,847 |
|
|
|
6,537 |
|
|
|
|
|
|
|
|
Deferred tax liabilities: |
|
|
|
|
|
|
Digital assets |
|
|
3,315 |
|
|
|
3,493 |
|
Operating lease right-of-use assets |
|
|
1,453 |
|
|
|
1,219 |
|
Investments, at fair value |
|
|
12,538 |
|
|
|
20,607 |
|
Investments in proprietary funds |
|
|
45,323 |
|
|
|
63,812 |
|
Intangible assets and goodwill |
|
|
10,894 |
|
|
|
13,089 |
|
Other |
|
|
669 |
|
|
|
- |
|
Total deferred tax liabilities |
|
|
74,192 |
|
|
|
102,220 |
|
|
|
|
|
|
|
|
Deferred tax liability, net |
|
$ |
66,345 |
|
|
$ |
95,683 |
|
The Company has the following tax carryforward attributes:
|
|
|
|
|
|
|
|
|
|
|
Gross Amount |
|
|
Expiring |
|
Federal net operating loss carryforwards |
|
$ |
16,650 |
|
|
$ |
- |
|
The following table presents income taxes paid by jurisdiction for the year ended December 31, 2025 and 2024, including
U.S. Federal and state income taxes. The States presented make up the majority of the effects of state taxes included in the
provision for income taxes.
|
|
|
|
|
|
|
|
|
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
Federal |
|
$ |
6,000 |
|
|
$ |
5,976 |
|
Wisconsin |
|
|
1,663 |
|
|
|
- |
|
New York State |
|
|
655 |
|
|
|
2,399 |
|
New York City |
|
|
575 |
|
|
|
2,285 |
|
New Jersey |
|
|
- |
|
|
|
417 |
|
All others |
|
|
348 |
|
|
|
10 |
|
|
|
$ |
9,241 |
|
|
$ |
11,087 |
|
|