Abacus Global Management, Inc.ABX
Abacus Global Management, Inc. Income Taxes Disclosure
INCOME TAXES
For the years ended December 31, 2025 and 2024, the Company recorded provision for income taxes of $15,434,121 and $5,484,738, respectively. The effective tax rate was 29.26% for the year ended December 31, 2025 was mainly due to state income taxes and permanent differences related to IRS Section 162(m) limitations and IRS Section 264(f) disallowed interest. The effective rate for the year ended December 31, 2024 was (28.22)% was mainly due to permanent differences related to IRS Section 162(m) limitations and business acquisition transaction costs.
The components of the provision for income taxes are as follows:
| For the Years Ended December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Current provision: | ||||||||||||||
| Federal | $ | 10,834,270 | $ | (640,833) | ||||||||||
| State | 2,289,002 | (132,993) | ||||||||||||
| Foreign | 1,486,175 | 258,995 | ||||||||||||
| Total current tax | 14,609,447 | (514,831) | ||||||||||||
| Deferred provision: | ||||||||||||||
| Federal | 2,523,486 | 5,582,741 | ||||||||||||
| State | 522,121 | 1,155,096 | ||||||||||||
| Foreign | (2,220,933) | (738,268) | ||||||||||||
| Total deferred tax | 824,674 | 5,999,569 | ||||||||||||
| Provision for income taxes | $ | 15,434,121 | $ | 5,484,738 | ||||||||||
The Company did not have any unrecognized tax benefits relating to uncertain tax positions as of December 31, 2025, and 2024, and did not recognize any interest or penalties related to uncertain tax positions as of December 31, 2025, and 2024.
The reconciliation of taxes at the federal statutory rate to provision for income taxes in accordance with the guidance after the adoption of ASU 2023-09, as described in Note 2, Summary of Significant Accounting Policies is as follows:
| For the Year Ended December 31, | |||||||||||
| 2025 | |||||||||||
| Amount | Percent | ||||||||||
| U.S. federal statutory rate | $ | 11,076,675 | 21.00 | % | |||||||
State and local income taxes, net of federal income tax effect[1] | 2,766,764 | 5.24 | % | ||||||||
| Foreign tax effects | 230,960 | 0.44 | % | ||||||||
| Nontaxable or nondeductible items | 1,142,193 | 2.17 | % | ||||||||
| Other adjustments | 217,529 | 0.41 | % | ||||||||
| Effective tax rate | $ | 15,434,121 | 29.26 | % | |||||||
[1] State taxes in Florida make up the majority (greater than 50 percent) of the tax effect in this category. | |||||||||||
The reconciliation of taxes at the federal statutory rate to provision for income taxes in accordance with the guidance prior to the adoption of ASU 2023-09 is as follows:
| For the Year Ended December 31, | ||||||||||||||
| 2024 | ||||||||||||||
| Income tax benefit computed at federal statutory rate | $ | (4,080,993) | ||||||||||||
| Restricted stock award deductions limited by IRC 162(m) | 9,151,161 | |||||||||||||
| Transaction costs | 1,444,257 | |||||||||||||
| Change in tax rates | (544,894) | |||||||||||||
| State income taxes, net of federal tax benefit | (844,377) | |||||||||||||
| Other | 105,335 | |||||||||||||
| Valuation allowance | 254,249 | |||||||||||||
| Income tax at effective rate | $ | 5,484,738 | ||||||||||||
Cash paid for income taxes, net of refunds, after the adoption of ASU 2023-09 is as follows:
| For the Year Ended December 31, | ||||||||
| 2025 | ||||||||
| U.S federal | $ | 6,500,000 | ||||||
| State | ||||||||
| Florida | 1,800,000 | |||||||
| Foreign | ||||||||
| Luxembourg | 887,435 | |||||||
| Total cash paid for income taxes, net of refunds | $ | 9,187,435 | ||||||
Cash paid for income taxes, net of refunds, prior to the adoption of ASU 2023-09 was $2,146,846 for the year ended December 31, 2024.
The effects of temporary differences that give rise to significant components of deferred tax assets and liabilities at December 31, are as follows:
| 2025 | 2024 | |||||||||||||
| Deferred tax assets: | ||||||||||||||
| Basis difference related to life insurance policy sales | $ | 6,263,292 | $ | 1,963,194 | ||||||||||
| Warrant liability | — | 2,368,490 | ||||||||||||
| Interest expense carryforward | 2,129,422 | 935,149 | ||||||||||||
| Stock-based compensation | 1,839,210 | 1,668,623 | ||||||||||||
| Right of use liability | 621,971 | 590,345 | ||||||||||||
| Change in fair value of debt | — | 834,653 | ||||||||||||
| Deferred compensation | 2,159,370 | 1,077,061 | ||||||||||||
| Capitalized transaction costs | 660,871 | 714,095 | ||||||||||||
| Net operating loss carryforwards | 3,268 | 521,687 | ||||||||||||
| 13,677,404 | 10,673,297 | |||||||||||||
| Less: valuation allowance | — | (254,249) | ||||||||||||
| Deferred tax assets | 13,677,404 | 10,419,048 | ||||||||||||
| Deferred tax liabilities: | ||||||||||||||
| Basis difference in intangible assets | (13,630,460) | (17,760,617) | ||||||||||||
| 2025 | 2024 | |||||||||||||
| Change in fair value of life insurance policies (policies held at fair value method) | (17,087,420) | (12,509,221) | ||||||||||||
| Basis difference in investments | (12,821,488) | (6,426,108) | ||||||||||||
| Other, net | (352,196) | (501,967) | ||||||||||||
| Deferred tax liabilities | (43,891,564) | (37,197,913) | ||||||||||||
| Net deferred tax liability | $ | (30,214,160) | $ | (26,778,865) | ||||||||||
Valuation allowances are provided when it is considered more likely than not that deferred tax assets will not be realized. In 2025 the Company did not have a tax valuation allowance.
The Company does not have significant federal or state net operating losses that can be carried forward indefinitely. The federal net operating losses may be used to offset 80% of taxable income in a given year.
The Company did not have any unrecognized tax benefits relating to uncertain tax positions at December 31, 2025 and 2024 and did not recognize any interest or penalties related to uncertain tax position at December 31, 2025 and 2024. The Company does not anticipate that changes in its unrecognized tax benefits will have a material impact on the consolidated statements of operations and comprehensive income (loss) during 2026.
The Company’s tax returns are subject to examination by relevant taxing authorities. None of the Company’s tax returns are under audit. As of December 31, 2025, tax years for 2024, 2023, and 2022, are subject to examination by the relevant tax authorities.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 13, 2026 | Showing above |
| 2024 | Mar 28, 2025 | |
| 2023 | Mar 21, 2024 | |
| 2022 | Apr 18, 2023 | |
| 2021 | Jun 22, 2022 | |
| 2020 | Mar 26, 2021 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.