BrightSpire Capital Inc

15. 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 sources of income subject to tax are income from certain PE investments and a real estate investment in Europe.

The following table provides a summary of the Company’s tax provisions (dollars in thousands):

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):

(1) As of December 31, 2023, deferred tax assets include $35.4 million of federal net operating loss carryforwards, of which $3.1 million begin to expire in 2036 and $32.3 million are carried forward indefinitely and $2.8 million of capital loss carryforwards that will begin to expire in 2026. As of December 31, 2022, deferred tax assets include $6.5 million of federal net operating loss carryforwards, of which $3.0 million begin to expire in 2036 and $3.5 million are carried forward indefinitely and $2.4 million of capital loss carryforwards that will expire in 2026.

(2) As of December 31, 2023, the Company had $5.8 million of deferred tax assets relating to basis difference - investment in partnerships and $8.0 million of deferred tax assets relating to net operating and capital loss carryforwards. As of December 31, 2022, the Company had $6.1 million of deferred tax assets relating to basis difference - investment in partnerships and $1.9 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):

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, 2023 and December 31, 2022. For the years ended December 31, 2023, 2022 and 2021, the Company hasnot recognized any interest or penalties related to uncertain tax positions.