AleAnna, Inc. Income Taxes Disclosure

NOTE 11 – INCOME TAXES

As of December 31, 2025 and 2024, AleAnna, Inc. held 60.94% of the economic interest in HoldCo, which is treated as a partnership for U.S. federal income tax purposes. As a partnership, HoldCo generally is not subject to U.S. federal income tax under current U.S. tax laws as its net taxable income (loss) and any related tax credits are passed through to its members and included in their tax returns, even though such net taxable income (loss) or tax credits may not have actually been distributed. AleAnna, Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to its distributive share of the net taxable income (loss) and any related tax credits of HoldCo.

AleAnna Energy was historically and remains a disregarded subsidiary of a partnership for U.S. Federal income tax purposes with each partner being separately taxed on its share of taxable income or loss. As a direct result of the Business Combination, HoldCo became the sole member of AleAnna Energy. As such, HoldCo’s distributive share of any net taxable income or loss and any related tax credits of AleAnna Energy are then distributed to the Company.

For the days and periods prior to the closing of the Business Combination, AleAnna Energy was a disregarded subsidiary of an entity treated as a partnership. As such, its net taxable loss and any related tax credits were allocated to its members. The period as of and for the year ended December 31, 2025 discussed below represents the period beginning January 1, 2025 and ending December 31, 2025.

AleAnna’s Italian subsidiary (AleAnna Italia, S.p.A.) is a joint stock company or S.p.A and is considered a corporation under the Italian tax code. Therefore, the statutorily determined cumulative taxable loss of AleAnna Italia was tax affected and recognized as a deferred tax asset as of December 31, 2025 and 2024. The Company has also recorded deferred tax assets for temporary differences between the book and tax basis in the underlying assets and liabilities.

Domestic and foreign income (loss) before provision for income taxes is comprised of the following:

Income tax expense attributable to operations is comprised of the following:

The Company’s income tax rate differs from the amounts computed by applying the U.S. federal income tax rate of 21% as a result of the following:

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company’s deferred tax assets as of the balance sheet dates were as follows:

The Company has assessed the realizability of the net deferred tax assets, and in that analysis, has considered the relevant positive and negative evidence available to determine whether it is more likely than not that some portion or all of the deferred tax assets will be realized. In making such a determination, the Company considered all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and recent results of operations. After consideration of all positive and negative evidence, the Company concluded that it is more likely than not that the deferred tax assets for all entities will not be realizable as of December 31, 2025. This conclusion was based on the evaluation of positive and negative evidence, including the Longanesi field commenced production in 2025 and the Company’s recent history of losses. The negative evidence outweighed positive evidence. Consequently, the Company maintains $50.0 million of valuation allowance against its deferred tax assets with $43.6 million of the valuation allowance being recorded against Italian deferred tax assets and $6.4 million of the valuation allowance being recorded against U.S. deferred tax assets. The Company will continue to evaluate all available evidence in the future periods.

As of December 31, 2025, the Company had $5.0 million of deferred tax assets related to net operating loss carryforwards (“NOL”) available to offset future taxable income. The Company had $0.7 million of U.S. federal net operating loss carryforwards that do not expire and are subject to 80% taxable income limitation. The Company also has $4.3 million of Italian net operating loss carryforwards that do not expire and are subject to 80% taxable income limitation.

The Company recognizes the financial statement effects of uncertain income tax positions when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. To the extent the Company’s assessment of such tax positions changes, the change in estimate will be recorded in the period in which the determination is made. As of December 31, 2025 and 2024, the Company had not recorded any uncertain tax positions or accrued interest and penalties on the consolidated balance sheets. 

The Company’s income tax filings will be subject to audit by various taxing jurisdictions. The Company will monitor the status of U.S. Federal, state and local income tax returns and Italian tax returns that may be subject to audit in future periods. No U.S. Federal, state and local income tax returns or Italian tax returns are currently under examination by the respective taxing authorities.

On July 4, 2025, the One Big Beautiful Bill Act “OBBBA” was signed into law. The OBBBA makes permanent several items of the Tax Cuts and Jobs Act, including 100% bonus depreciation, immediate deduction of domestic research expenditures, and utilizing earnings before interest, taxes, depreciation, and amortization in computing the business interest expense limitation. The changes in this bill do not have a material impact on the income tax provision for tax year ending December 31, 2025.