Brookfield Asset Management Ltd.BAM
Brookfield Asset Management Ltd. Income Taxes Disclosure
. INCOME TAXES
The following is a summary of the Company's income tax expense (benefit).
The income before provision for taxes consists of the following:
FOR THE YEARS ENDED DECEMBER 31, (MILLIONS) | 2025 | 2024 | 2023 | ||||||||||||||
| United States | $ | 171 | $ | 671 | $ | 828 | |||||||||||
| Canada | 429 | 503 | 599 | ||||||||||||||
| Other | 2,325 | 1,372 | 1,127 | ||||||||||||||
| $ | 2,925 | $ | 2,546 | $ | 2,554 | ||||||||||||
The provision (benefit) for taxes consists of the following:
FOR THE YEARS ENDED DECEMBER 31, (MILLIONS) | 2025 | 2024 | 2023 | ||||||||||||||
| Current | |||||||||||||||||
| United States | $ | 126 | $ | 89 | $ | 147 | |||||||||||
| Canada | 34 | (92) | 65 | ||||||||||||||
| Other | 216 | 167 | 113 | ||||||||||||||
| Total provision for current tax | 376 | 164 | 325 | ||||||||||||||
| Deferred | |||||||||||||||||
| United States | 34 | 60 | 57 | ||||||||||||||
| Canada | 72 | 208 | 31 | ||||||||||||||
| Other | 45 | 6 | 4 | ||||||||||||||
| Total provision for deferred tax | 151 | 274 | 92 | ||||||||||||||
| Provision for income tax | |||||||||||||||||
| United States | 160 | 149 | 204 | ||||||||||||||
| Canada | 106 | 116 | 96 | ||||||||||||||
| Other | 261 | 173 | 117 | ||||||||||||||
| Total Provision for income tax | $ | 527 | $ | 438 | $ | 417 | |||||||||||
The Company's effective income tax rate is different from the Company's federal statutory income tax rate due to the following differences set out below:
FOR THE YEAR ENDED DECEMBER 31, (MILLIONS) | 2025 | ||||||||||
| $ | % | ||||||||||
| Income before provision for taxes | $ | 2,925 | |||||||||
| Federal statutory income tax rate | 439 | 15 | % | ||||||||
| (Reduction) increase in rate resulting from: | |||||||||||
| United States | |||||||||||
| International operations subject to different tax rates | 60 | 2 | % | ||||||||
| Stock compensation | (43) | (1) | % | ||||||||
| Changes in valuation allowance | 197 | 7 | % | ||||||||
| Other | (15) | — | % | ||||||||
| Canada | |||||||||||
| Provincial tax | 56 | 2 | % | ||||||||
| Other | 5 | — | % | ||||||||
| United Kingdom | 42 | 1 | % | ||||||||
| Other jurisdictions | 8 | — | % | ||||||||
| Incentive distributions | (78) | (3) | % | ||||||||
| Taxable income attributable to non-controlling interests | (59) | (2) | % | ||||||||
| Portion of gains subject to different tax rates | (85) | (3) | % | ||||||||
| Effective income tax rate | $ | 527 | 18 | % | |||||||
FOR THE YEARS ENDED DECEMBER 31, (MILLIONS) | 2024 | 2023 | |||||||||
| Combined statutory income tax rate | 27 | % | 27 | % | |||||||
| (Reduction) increase in rate resulting from: | |||||||||||
| Incentive distributions | (3) | % | (3) | % | |||||||
| International operations subject to different tax rates | (2) | % | (4) | % | |||||||
| Taxable income attributable to non-controlling interests | (1) | % | (1) | % | |||||||
| Portion of gains subject to different tax rates | (2) | % | (2) | % | |||||||
| Other | (2) | % | (1) | % | |||||||
| Effective income tax rate | 17 | % | 16 | % | |||||||
A summary of the tax effects of the temporary differences is as follows:
AS AT DECEMBER 31, (MILLIONS) | 2025 | 2024 | 2023 | ||||||||||||||
| Assets | |||||||||||||||||
| Losses (United States) | $ | 445 | $ | 552 | $ | 720 | |||||||||||
| Losses (Other) | 6 | 6 | 6 | ||||||||||||||
| Investment basis differences/net unrealized gains and losses | 318 | 28 | (83) | ||||||||||||||
| Deferred income tax assets before valuation allowance | $ | 769 | $ | 586 | $ | 643 | |||||||||||
| Valuation allowance | (197) | — | — | ||||||||||||||
| Deferred income tax assets | $ | 572 | $ | 586 | $ | 643 | |||||||||||
| Liabilities | |||||||||||||||||
| Investment basis differences/net unrealized gains and losses | 169 | 46 | 40 | ||||||||||||||
| Deferred income tax liabilities | $ | 169 | $ | 46 | $ | 40 | |||||||||||
Management evaluates the realizability of deferred tax assets by considering, among other factors, projections of future taxable income, beginning with historical results and incorporating assumptions regarding the amount and character of future taxable income. These assumptions require judgment and are consistent with the Company's operating plans and estimates used to manage the business.
As at December 31, 2025, a valuation allowance of $197 million has been recorded against deferred tax assets related to net operating loss carryforwards in the U.S. that are not more likely than not to be utilized. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased.
As at December 31, 2025, the Company has net operating loss carryforwards in the U.S. of approximately $2.1 billion (2024 – $2.6 billion) that expire after 2026.
As at December 31, 2025, the Company has accumulated undistributed earnings generated by certain foreign subsidiaries, which it intends to indefinitely reinvest and have not recorded any deferred taxes with respect to outside tax basis difference on these subsidiaries.
As at December 31, 2025, the Company did not have any material unrecognized tax benefits related to uncertain tax positions.
The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by U.S. and other local tax authorities. As of December 31, 2025, certain of the Company’s U.S. and non-U.S. income tax returns for 2018 through 2023 are open to or are under examination.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Mar 17, 2025 | |
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.