Company: COHN
Filing Date: 2025-05-02
Form Type: 10-Q
Source: 0001437749-25-014235
Chunk: 220

Company: Cohen & Co Inc.
Filing Date: 2025-05-02
Form: 10-Q
Item: Item 8
Chunk 220
---
 $
     54

     $
     557

     $
     503

      Deferred 

     85

     (59
     )

     (144
     )

      Total 
      
     $
     139

     $
     498

     $
     359

Our provision for income taxes fluctuates due to several factors mostly attributable to our legal structure, which are summarized as follows:

Cohen & Company Inc. is treated as a “C” corporation for United States federal income tax purposes. A U.S. C corporation is subject to a federal tax rate of 21%.  The Company's effective tax rate is significantly different than this rate for the following reasons.

1. Cohen & Company Inc. consolidates the Operating LLC but only owns a minority economic interest in the Operating LLC.  For the three months ended March 31, 2025, Cohen & Company Inc. owned 29.6% of the economic interests of the Operating LLC (on average) and was allocated the same percentage of income/(loss) generated by the Operating LLC.  To the extent Cohen & Company Inc. incurs tax obligations on this amount, the related tax expense is recognized in our consolidated financial statements.  The remaining 70.4% of income/(loss) generated by the Operating LLC was allocated to the non-controlling members of the Operating LLC and is subject to taxation on such members' individual tax returns.  

2. The Operating LLC itself consolidates certain pass-through entities.  Therefore, the income/(loss) of these entities is included in the Company's consolidated results, but no tax expense/(benefit) related to the unowned portions of these entities is included in the Company's consolidated results. 

3. There are state, local, and foreign taxes to which the Operating LLC or its subsidiaries are subject to, which are included in the Company's effective tax rate.  

4. We also have valuation allowances applied against our NOL and NCL carryforward deferred tax assets as well as our tax over book basis in the Operating LLC.  Valuation allowances are applied to deferred tax assets when management determines that the assets may not be fully realized.  This determination requires significant judgement and is primarily based on management's expectations regarding the generation of future taxable income.  ASC 740 indicates that all available evidence should be considered when assessing the need for and the appropriate level of a valuation