Company: COHN
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001437749-25-007158
Chunk: 25

Company: Cohen & Co Inc.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 1C
Chunk 25
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10-K.

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The tax benefit recognized in 2024 was comprised of a deferred tax benefit of $677 and current tax expense of $348.  The current tax expense incurred was the result of foreign, state, and local income tax.  The deferred tax benefit was due to routine timing differences between recognition of income and expense items for GAAP and tax purposes.  

The tax expense recognized in 2023 was comprised of a deferred tax expense of $5,354 and current tax expense of $191.  The current tax expense incurred was the result of foreign, state, and local income tax.  The deferred tax expense was U.S. federal, state, and local tax expense, which was the result of the increase in the valuation allowance applied against the Company's carryforward tax assets.  

We have significant carryforward tax assets.  As of December 31, 2024, the Company had a federal net operating loss (“NOL”) of approximately $92,543, which will be available to offset future taxable income, subject to limitations described below. If not used, this NOL will begin to expire in 2028. The Company also had net capital losses (“NCLs”) in excess of capital gains of $57,239 as of December 31, 2024, which can be carried forward to offset future capital gains.  If not used, this carryforward will begin to expire in 2025.  ASC 746 requires that we record a valuation allowance against these assets so that the net asset recognized is, in management's judgment, more likely than not to be realized.  

Each reporting period, management determines the expected amount of taxable income it will generate in each jurisdiction where the Company has NOLs.  Management then schedules this income against each carryforward asset and determines what portion of the asset it believes is more likely than not to be realized.  This determination is subjective and subject to many assumptions and factors including:  profitability of our business in the future, the timing of that future income as compared to carryforward asset expiration, the character of future income (ordinary or capital), and the jurisdiction in which the income will be generated.  To the extent management's determination changes, an adjustment will be made to the valuation allowance resulting in deferred tax expense or benefit.  We recorded deferred tax expense in 2023 because expectations of future income decreased and the Company increased the valuation allowance