Company: TIPT
Filing Date: 2025-03-03
Form Type: 10-K
Source: 0001393726-25-000028
Chunk: 24

Company: TIPTREE INC.
Filing Date: 2025-03-03
Form: 10-K
Item: Item 7
Chunk 24
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$8,885 Employee incentive compensation expense20,425 21,230 Depreciation and amortization1,450 1,327 Other expenses8,306 8,772 Total expenses$38,401 $40,214 

Corporate expenses include expenses of the holding company for employee compensation and benefits, interest expense, and public company and other expenses. Corporate employee compensation and benefits includes the expense of management, legal and accounting staff. Other expenses primarily consisted of audit and professional fees, insurance, office rent and other related expenses.

Employee compensation and benefits, including incentive compensation expense, were $28.6 million for the year ended December 31, 2024, compared to $30.1 million for the prior year period, driven by a decrease in accrued cash incentive compensation expense. Of the incentive compensation expense in the year ended December 31, 2024, $8.7 million was stock-based compensation expense, compared to $6.3 million in 2023. As of December 31, 2024 and 2023, the Company had no outstanding borrowings at the holding company and therefore incurred no interest expense for related periods. Other expenses declined to $8.3 million driven primarily by decreased professional fees.

Provision for Income Taxes

The total income tax expense of $61.7 million and $43.1 million for the years ended December 31, 2024 and 2023, respectively, is reflected as a component of net income (loss). For the years ended December 31, 2024 and 2023, the Company’s effective tax rate was equal to 41.3% and 51.8%, respectively. The effective rates for the years ended December 31, 2024 and 2023 were significantly higher than the U.S. statutory income tax rate of 21.0%, primarily due to the impact of outside basis deferred taxes on Tiptree’s investment in Fortegra.

Tiptree owns less than 80% of Fortegra and is required to record deferred taxes on the outside basis on its investment in Fortegra. This deferred tax liability represents the tax that would be due, before consideration of loss carryforwards, if Tiptree were to sell all of its Fortegra stock at its carrying value on Tiptree’s balance sheet. 

As of December 31, 2024, this deferred tax liability relating to Fortegra was $84.7 million, which was an increase of $23.0