v3.26.1
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Andersen Group Inc. is taxed as a C corporation and is subject to U.S. federal, state and local income taxes on its share of allocable partnership income. Andersen Group Inc.’s sole material asset is its ownership in AT Umbrella LLC, which is a limited liability company that is taxed as a partnership for U.S. federal and certain state and local income tax purposes. AT Umbrella LLC’s allocable share of taxable income and related tax credits, if any, are passed through to its members, including Andersen Group Inc., and are included in the members’ tax returns.
Prior to Andersen Group Inc.’s investment in AT Umbrella LLC, the Company was a multi-member limited liability company taxed as a partnership and generally not subject to U.S. federal and state taxes. However, certain state and local jurisdictions impose an entity level income tax and these amounts are reflected as income taxes in the consolidated financial statements. Each member of the limited liability company is responsible for reporting and paying income tax on their share of income or loss to extent required by federal and state income tax regulations.
The components of income (loss) before income tax expense are as follows (in thousands):
December 31,
2025 2024 2023
Domestic
$ (127,172) $ 137,196  $ 120,940 
Foreign
—  —  — 
Total
$ (127,172) $ 137,196  $ 120,940 
Income tax expense (benefit) consists of the following (in thousands):
Year Ended December 31,
2025 2024 2023
Current taxes:
Federal
$ —  $ —  $ — 
State
3,136  2,275  1,999 
Foreign
372  222  87 
Total current taxes
3,508  2,497  2,086 
Deferred taxes:
Federal
(316) —  — 
State
(195) (102) 171 
Foreign
—  —  — 
Total deferred taxes
(511) (102) 171 
Income tax expense
 $ 2,997  $ 2,395  $ 2,257 
The Company’s effective tax rate differs from the U.S. federal statutory rate of 21% for 2025, 2024, and 2023 as follows:
Year Ended December 31,
2025 2024 2023
Federal statutory rate
21.0  % 21.0  % 21.0  %
Noncontrolling interest (20.5) % —  % —  %
Other non-deductible expenses
 —  % 0.6  % 0.7  %
State and local taxes
(2.3) % 1.6  % 1.8  %
Partnership income not subject to tax —  % (21.6) % (21.7) %
Valuation allowance
 (0.3) % —  % —  %
Foreign income and withholding taxes
(0.3) % 0.2  % 0.1  %
Effective tax rate
(2.4) % 1.8  % 1.9  %
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the deferred tax assets and liabilities were as follows (in thousands):
December 31,
2025 2024
Deferred tax assets:
Investment in partnership
 $ 89,086  $ — 
U.S. federal and state net operating loss
 337  — 
Subtotal
89,423  — 
Less valuation allowance
(88,779) — 
Total deferred tax assets
644  — 
Deferred tax liabilities:


Partnership level items
 (378) (455)
Total deferred tax liabilities
(378) (455)
Net deferred tax asset (liability)
$ 266  $ (455)
As of December 31, 2025, the Company recorded a $89.1 million deferred tax asset related to the investment in partnership which was offset with a valuation allowance of $88.8 million. The Company concluded that such asset is not more likely than not to be realized as the investment in AT Umbrella LLC is capital in nature and the Company does not have history of generating capital gain income.
In assessing the Company’s ability to recover its deferred tax assets, the Company evaluated whether it is more likely than not that some portion or the entire deferred tax asset will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income including appropriate character in those periods in which temporary differences become deductible and/or net operating losses can be utilized. The Company considered all positive and negative evidence when determining the amount of the net deferred tax assets that are more likely than not to be realized. This evidence includes, but is not limited to, historical earnings, scheduled reversal of taxable temporary differences, tax planning strategies and projected future taxable income.
The following table presents a reconciliation of the total change in the valuation allowance (in thousands):
 December 31,
 2025 2024 2023
Balance at beginning of period
$
— 
$
— 
$
— 
Change charged to income tax expense
97 
— 
— 
Change charged to equity
88,682 
— 
— 
Balance at end of period
$
88,779 
$
— 
$
— 
The Company applies the applicable authoritative guidance which prescribes a comprehensive model for the manner in which a company should recognize, measure, present and disclose in its financial statements all material uncertain tax positions that the Company has taken or expects to take on a tax return. The Company has no uncertain tax positions. There are no uncertain tax positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within twelve months of December 31, 2025.
As of December 31, 2025, the Company's U.S. federal net operating loss carryforwards were $1.3 million, which may be carried forward indefinitely but are only available to offset 80% of future taxable income.
The only open tax year for the U.S. federal income tax return is 2025. The state income tax returns have varying statutes of limitations.