Trump Media & Technology Group Corp.DJT

Trump Media & Technology Group Corp. Income Taxes Disclosure

10-KFiled Feb 27, 20262 min read
NOTE 9 - INCOME TAXES

The following table presents a reconciliation of the applicable U.S. federal income tax rate to the effective rate subsequent to the adoption of ASU 2023-09, based on the U.S. Federal statutory income tax rate of  21%:


  
Year Ended December 31, 2025
  
(in thousands, except rates)
  
Amount
    
Percent
  
U.S. Statutory federal tax rate
  
$
(149,473.8
)
    
(21.0
%)
State and local income tax
                
State tax net of federal benefit
                
Florida
    
(24,006.8
)
    
(3.4
)
Other
    
(5,704.9
)
    
(0.8
)
Change in valuation allowance
    
29,792.3
      
4.2
  
Permanent items
                
Non-deductible expenses
    
6,457.2
      
0.9
  
Change in valuation allowance
    
143,496.1
      
20.1
  
Income tax expense and effective tax rate
  
$
560.1
      
-
  

A reconciliation of the expected tax provision at the statutory federal income tax rate to our recorded tax provision consisted of the following, prior to the adoption of ASU 2023-09:

   
Years Ended December 31,
  
(in thousands)
  
2024
    
2023
  
U.S. Statutory federal tax rate
  
$
(84,181.6
)
  
$
(12,219.7
)
State and local income tax
                
State tax net of federal benefit
                
Florida
    
-
      
-
  
Other
    
-
      
-
  
Change in valuation allowance
    
-
      
-
  
Permanent items
                
Other
                
Non-deductible expenses
    
64,199.3
      
335.7
  
Change in valuation allowance
    
19,982.3
      
11,885.1
  
Income tax expense and effective tax rate
  
$
-
    
$
1.1
  


The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities as of December 31, 2025 and 2024 are as follows:

(in thousands)
  
December 31, 2025
    
December 31, 2024
  
Deferred tax assets
            
Research, development and capital raising costs
  
$
2,681.6
    
$
3,138.7
  
Right of Use Assets and Liabilities
    
57.1
      
45.3
  
Net operating loss (NOL)
    
60,124.1
      
31,456.6
  
Unrealized loss on equity securities
    
43,862.4
      
-
  
Unrealized on digital assets
    
98,916.5
      
-
  
Stock-based compensation expense
    
2,744.2
      
-
  
Intangible assets
    
1,266.7
      
-
  
Convertible debenture and other debt
    
28.2
      
-
  
Unearned revenues
    
7.3
      
-
  
Total deferred tax assets
    
209,688.1
      
34,640.6
  
Deferred tax liabilities
                
Property and equipment
    
(494.4
)
    
(579.6
)
Intangible Assets
    
(2,800.7
)
    
(396.4
)
Total deferred tax liabilities
    
(3,295.1
)
    
(976.0
)
Net deferred tax assets
    
206,393.0
      
33,664.6
  
Valuation allowance
    
(206,953.1
)
    
(33,664.6
)
Net deferred tax, net of valuation allowance
  
$
(560.1
)
  
$
-
  
The estimated annual effective tax rate applied to the twelve months ended December 31, 2025, is (0.37%) which differs from the US federal statutory rate of 21% principally due to the projection of U.S. net operating loss for the fiscal 2025 with full application of a valuation allowance and the change in the net deferred tax liability remaining after application of the valuation allowance (“naked credit” or “hanging credit”). As of December 31, 2025, TMTG had US Federal and state net operating loss carryforwards (“NOLs”) with a tax benefit of $60,124.0 (December 31, 2024: $31,456.6). NOLs are available for use indefinitely.

Historical Timeline

Fiscal YearFiled
2025Feb 27, 2026Showing above
2024Feb 14, 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.

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