BrightSpire Capital, Inc.BRSP
BrightSpire Capital, Inc. Income Taxes Disclosure
Income Taxes
The Company is subject to income tax laws of the various jurisdictions in which it operates, including U.S. federal, state and local non-U.S. jurisdictions, primarily in Europe. The Company’s current primary source of income subject to tax is income from its CLOs.
The following table provides a summary of the Company’s tax provisions (dollars in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Current | ||||||||||||||||||||
| Federal | $ | (259) | $ | (70) | $ | (296) | ||||||||||||||
| State and local | (1) | (7) | (219) | |||||||||||||||||
| Foreign | (541) | (2,114) | (1,587) | |||||||||||||||||
| Total current tax expense | (801) | (2,191) | (2,102) | |||||||||||||||||
| Deferred | ||||||||||||||||||||
| Federal | — | (22) | (20) | |||||||||||||||||
| Foreign | 22,302 | 1,153 | 1,060 | |||||||||||||||||
| Total deferred tax benefit | 22,302 | 1,131 | 1,040 | |||||||||||||||||
| Total income tax benefit (expense) | $ | 21,501 | $ | (1,060) | $ | (1,062) | ||||||||||||||
Deferred Income Tax Assets and Liabilities
Deferred tax asset is included in other assets while deferred tax liability is included in accrued and other liabilities on the consolidated balance sheets.
The components of deferred tax assets and deferred tax liabilities arising from temporary differences are as follows (dollars in thousands):
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Deferred tax assets | ||||||||||||||
| Basis difference - investment in partnerships | $ | 7,579 | $ | 7,852 | ||||||||||
| Lease liability - corporate offices | 912 | 1,170 | ||||||||||||
| Equity-based compensation | 9 | 9 | ||||||||||||
Net operating and capital loss carryforwards(1) | 9,398 | 9,152 | ||||||||||||
| Gross deferred tax asset | $ | 17,898 | $ | 18,183 | ||||||||||
Valuation allowance(2) | (15,230) | (15,278) | ||||||||||||
| Deferred tax assets, net of valuation allowance | $ | 2,668 | $ | 2,905 | ||||||||||
| Deferred tax liabilities | ||||||||||||||
| Basis difference - real estate | — | (19,781) | ||||||||||||
| Right-of-Use (ROU) lease asset - corporate offices | (835) | (1,083) | ||||||||||||
| Other | (45) | (35) | ||||||||||||
| Gross deferred tax liabilities | (880) | (20,899) | ||||||||||||
| Net deferred tax asset (liability) | $ | 1,788 | $ | (17,994) | ||||||||||
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(1) As of December 31, 2025, deferred tax assets include $37.9 million of federal net operating loss carryforwards, of which $3.1 million begin to expire in 2036 and $34.8 million are carried forward indefinitely and $5.9 million of capital loss carryforwards that will begin to expire in 2026. As of December 31, 2024, deferred tax assets include $35.7 million of federal net operating loss carryforwards, of which $3.0 million begin to expire in 2036 and $32.7 million are carried forward indefinitely, $6.8 million of federal capital loss carryforwards that will begin to expire in 2026 and $3.9 million of state capital loss carryforwards that will begin to expire in 2043.
(2) As of December 31, 2025, the Company had $5.8 million of deferred tax assets relating to basis difference - investment in partnerships and $9.4 million of deferred tax assets relating to net operating and capital loss carryforwards. As of December 31, 2024, the Company had $6.1 million of deferred tax assets relating to basis difference - investment in partnerships and $9.2 million of deferred tax assets relating to net operating and capital loss carryforwards.
Effective Income Tax
The Company’s income tax expense varied from the amount computed by applying the statutory income tax rate to income before income taxes. A reconciliation of the statutory U.S. income tax to the Company’s effective income tax is presented as follows (dollars in thousands):
| Year Ended December 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||
| Amount | Percentage | Amount | Amount | |||||||||||||||||||||||
| Pre-tax income (loss) attributable to taxable entities | $ | 7,146 | $ | (28,057) | $ | 4,646 | ||||||||||||||||||||
| Federal tax expense (benefit) at statutory tax rate (21%) | 1,501 | 21.0 | % | (5,892) | 976 | |||||||||||||||||||||
| State and local taxes, net of federal income tax expense | — | — | 3 | (13) | ||||||||||||||||||||||
| Permanent adjustments | 8 | 0.1 | 6,878 | (15) | ||||||||||||||||||||||
| Adjustments for foreclosure property | (778) | (10.9) | — | — | ||||||||||||||||||||||
| Foreign income tax differential | 23 | 0.3 | 48 | 33 | ||||||||||||||||||||||
| Return to provision | (43) | (0.6) | (203) | 128 | ||||||||||||||||||||||
| Valuation allowance, net | (49) | (0.7) | 1,487 | 5,737 | ||||||||||||||||||||||
| Adjustments to investment in partnership basis differences | — | — | (1,270) | (6,427) | ||||||||||||||||||||||
| Adjustments to federal tax attributes for disposed investments | — | — | — | 740 | ||||||||||||||||||||||
| Norwegian net lease office campus deferred tax liability write-off | (22,318) | (312.3) | — | — | ||||||||||||||||||||||
| Other | 155 | 2.2 | 9 | (97) | ||||||||||||||||||||||
| Effective tax rate | $ | (21,501) | (300.9) | % | $ | 1,060 | $ | 1,062 | ||||||||||||||||||
Tax Examinations and Uncertainty in Income Tax
The Company is no longer subject to U.S. federal, state and local tax examinations by tax authorities for years prior to 2017. There were no material uncertain tax positions as of December 31, 2025 and December 31, 2024. For the years ended December 31, 2025, 2024 and 2023, the Company has not recognized any interest or penalties related to uncertain tax positions.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 18, 2026 | Showing above |
| 2024 | Feb 19, 2025 | |
| 2023 | Feb 21, 2024 | |
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.