v3.26.1
Income taxes
 6 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
Income taxes
Note 18. Income taxes
Current tax is the amount of income tax recoverable (payable) in respect of the taxable loss (profit) for a period. Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities for accounting and tax purposes. Deferred income tax assets and liabilities are measured at the tax rates expected to apply when temporary differences reverse. Current and deferred taxes are offset only when they are levied by the same tax authority, on the same entity or group of entities, and when there is a legal right to offset.
Prior to the Domestication (as defined below) of Legacy Mount Logan to the United States (US), Legacy Mount Logan was subject to income taxes in Canada, which included taxes on the income earned through Legacy Mount Logan's controlled US subsidiaries, but a deduction was allowed for certain US taxes paid on such income.

The effective income tax rate reflected in the Condensed Consolidated Statements of Operations varies from the United States and Canadian tax rates of 21.0 percent for the three and six months ended June 30, 2026 (June 30, 2025 – 26.5 percent) for the items outlined in the following table.

Three months ended June 30,Six months ended June 30,
2026202520262025
Income (loss) before taxes$(4,177)$(943)$(10,147)$(7,612)
Income tax rate ¹
21.0 %26.5 %21.0 %26.5 %
Income tax expense at statutory tax rate(877)(250)(2,131)(2,017)
Statutory tax rate difference between Canada and the US — (185)— (196)
Nondeductible Differences(835)992 — 1,809 
Canadian foreign accrual property income impact 1
— (166)— (1,181)
Change in valuation allowances 2
1,718 (361)2,152 1,769 
Dividends Received Deduction(15)— (30)— 
Other9 (39)9 (157)
Income tax expense (benefit)$— $(9)$— $27 
_______________
(1)On September 12, 2025, pursuant to a Plan of Domestication, immediately prior to the Mergers, (i) Legacy Mount Logan domesticated from the Province of Ontario, Canada to the State of Delaware, (ii) immediately following step (i), Mount Logan converted to a limited liability company, and (iii) immediately following (ii), Mount Logan made an election to be treated as a corporation for U.S. federal income tax purposes (the “Domestication”). As a result of the Domestication and the completion of the Business Combination, the Company is subject to a statutory tax rate
of 21% in the U.S. as compared to the 26.5% statutory Canadian corporate income tax rate applicable to Legacy Mount Logan prior to the Domestication.
(2)A valuation allowance has been recorded to offset certain deferred tax assets, net of amounts expected to be realized through reversal of existing deferred tax liabilities. Management concluded that, after considering reversing deferred tax liabilities, tax-planning opportunities and forecasted taxable income, the weight of evidence — including cumulative losses and Section 382 limitations on acquired loss carryforwards — indicates the remaining deferred tax assets are not more-likely-than-not to be realized. The primary drivers of the change in deferred tax assets are (i) recognition of loss and capital-loss carryforwards acquired from TURN, which are materially restricted by a Section 382 limitation, and (ii) continued NOL positions in the Asset Management segment and Insurance Solutions segment, for which projected taxable income — given cumulative pre-tax losses over the prior three years — is insufficient to support utilization.


Components of income tax provision
The details of income (loss) before income taxes by jurisdiction are as follows:
Three months ended June 30,Six months ended June 30,
2026202520262025
United States$(4,177)$3,389 $(10,147)$3,629 
Foreign— (4,332)— (11,241)
Income (loss) before taxes$(4,177)$(943)$(10,147)$(7,612)
The details of the income tax provision by jurisdiction are as follows:
Three months ended June 30,Six months ended June 30,
2026202520262025
Current tax
Federal$— $221 $— $362 
State— — — — 
Foreign— 20 — 37 
Total current tax$— $241 $— $399 
Deferred tax
Federal$— $(250)$— $(372)
State— — — — 
Foreign$— $— — — 
Total deferred tax$— $(250)$— $(372)
Income tax expense (benefit)$— $(9)$— $27 
Deferred tax assets and liabilities consists of the following temporary differences:
June 30, 2026December 31, 2025
Assets
Tax benefit of loss carryforward$51,668 $45,098 
Deferred acquisition costs6,542 6,198 
Unrealized losses on remeasurement of investments16,758 17,628 
Other assets tax value in excess of book value3,875 3,768 
Total deferred tax assets78,843 72,692 
Valuation allowance(69,807)(65,397)
Total deferred tax assets, net of valuation allowance$9,036 $7,295 
Liabilities
Insurance reserves$(4,782)$(2,686)
Other(4,254)(4,609)
Total deferred tax liabilities$(9,036)$(7,295)
Net deferred tax assets$— $— 
The Company considers its significant tax jurisdictions to include the United States and before the acquisition of TURN, Canada. The Company remains subject to income tax examination in Canada for years after 2021, and U.S. federal jurisdiction for years after 2022.
On August 16, 2022, the U.S. enacted the Inflation Reduction Act of 2022 (“IRA”) which is generally effective for years beginning after December 31, 2022. Notably, the bill created a 15% corporate alternative minimum tax (“CAMT”) on corporations with three-year average financial statement income over $1 billion. The Internal Revenue Service has issued proposed regulations and multiple interim notices addressing CAMT computations, status determinations, and administrative relief; final regulations are pending. The Company has made certain interpretations and assumptions to comply with CAMT. The Company’s financial statement income is below $1 billion, therefore it is not expected that the Company would have a CAMT liability. If CAMT is paid in the future, the amount would be indefinitely available as a credit carryforward that would reduce tax in future years and would be treated as a temporary item reflected within deferred taxes. The Company has no uncertain tax positions.

As of June 30, 2026, the Company’s U.S. income tax returns for tax years 2022 through 2025 generally remain subject to examination by the applicable taxing authorities, although tax year 2021 may remain open in certain U.S. state jurisdictions. In Canada, tax years 2021 through 2025 generally remain open to examination.

The Company has reviewed and made an assessment of the potential exposure to Pillar Two income taxes. The review was generally based on the most recent information available from tax filings, country-by-country reporting and financial statements, and takes into account known changes in the group and its operations. Based on the review and assessment the Company has concluded that they do not have any potential exposure to Pillar Two income taxes.

On July 4, 2025, the One Big Beautiful Bill Act ('OBBBA') was enacted. The effects of the OBBBA were recognized in the period of enactment in accordance with ASC 740-10-35-4. The Company has evaluated its provisions and concluded that OBBBA did not have a material impact on the consolidated financial statements or effective tax rate for the year ended December 31, 2025. Furthermore, no material impact is currently expected on future results of operations, financial condition, or cash flows. The Company will continue to monitor any guidance or regulations issued by the Treasury Department.