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Income Taxes | 12 Months Ended
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Nov. 30, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The provision for income taxes consisted of the following:
| Years Ended November 30,
(In thousands) | 2023 |  | 2022 |  | 2021
Current: |  |  |  |  |
Federal | $ | 1,037,229 |  |  | 1,282,037 |  |  | 924,474 |
State | 271,752 |  |  | 330,681 |  |  | 245,941 |
| $ | 1,308,981 |  |  | 1,612,718 |  |  | 1,170,415 |
Deferred: |  |  |  |  |
Federal | $ | (53,474) |  |  | (193,667) |  |  | 149,349 |
State | (14,494) |  |  | (52,986) |  |  | 42,745 |
| (67,968) |  |  | (246,653) |  |  | 192,094 |
| $ | 1,241,013 |  |  | 1,366,065 |  |  | 1,362,509 |
A reconciliation of the statutory rate and the effective tax rate was as follows:
| Percentage of Pretax Income
| 2023 |  | 2022 |  | 2021
Statutory rate | 21.00 | % |  | 21.00 | % |  | 21.00 | %
State income taxes, net of federal income tax benefit | 4.09 |  |  | 4.52 |  |  | 4.03 |
Tax credits (1) | (1.48) |  |  | (2.16) |  |  | (1.73) |
Nondeductible compensation | — |  |  | — |  |  | 0.49 |
Tax reserves and interest expense, net (2) | — |  |  | (0.83) |  |  | 0.03 |
Deferred tax asset valuation allowance, net | (0.01) |  |  | — |  |  | (0.01) |
Other | 0.36 |  |  | 0.31 |  |  | (0.29) |
Effective rate | 23.96 | % |  | 22.84 | % |  | 23.52 | %
(1)During fiscal year 2022, Congress enacted the Inflation Reduction Act which included a retroactive extension of the new energy efficient home tax credit through 2032. (2)Includes a $50.2 million benefit related to the resolution of an uncertain tax position during fiscal year 2022. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The tax effects of significant temporary differences that give rise to the net deferred tax assets were as follows:
| November 30,
(In thousands) | 2023 |  | 2022
Deferred tax assets: |  |  |
Inventory valuation adjustments | $ | 39,641 |  |  | 83,330 |
Reserves and accruals | 193,156 |  |  | 199,451 |
Net operating loss carryforwards | 52,591 |  |  | 61,741 |
Capitalized expenses | 208,392 |  |  | 241,887 |
Investments in unconsolidated entities | 65,254 |  |  | 16,311 |
Employee stock incentive plan | 40,270 |  |  | 37,573 |
Unrealized losses on investments in equity securities | 53,684 |  |  | 29,903 |
Other assets | 51,785 |  |  | 52,770 |
Total deferred tax assets | 704,773 |  |  | 722,966 |
Valuation allowance | (2,333) |  |  | (2,903) |
Total deferred tax assets after valuation allowance | 702,440 |  |  | 720,063 |
Deferred tax liabilities: |  |  |
Capitalized expenses | 151,912 |  |  | 177,726 |
Deferred income | 168,316 |  |  | 253,659 |
Other liabilities | 55,734 |  |  | 46,270 |
Total deferred tax liabilities | 375,962 |  |  | 477,655 |
Net deferred tax assets | $ | 326,478 |  |  | 242,408 |
The detail of the Company's net deferred tax assets (liabilities) was as follows:
| Years Ended November 30,
(In thousands) | 2023 |  | 2022
Net deferred tax assets: |  |  |
Homebuilding | $ | 163,917 |  |  | 154,143 |
Financial Services | 36,821 |  |  | 15,376 |
Multifamily | 54,786 |  |  | 26,675 |
Lennar Other | 70,954 |  |  | 46,214 |
Net deferred tax assets | $ | 326,478 |  |  | 242,408 |
A reduction of the carrying amounts of deferred tax assets by a valuation allowance is required if, based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed each reporting period by the Company based on the consideration of all available positive and negative evidence using a "more-likely-than-not" standard with respect to whether deferred tax assets will be realized. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, actual earnings, forecasts of future profitability, the duration of statutory carryforward periods, the Company’s experience with loss carryforwards not expiring unused and tax planning alternatives.
| As of November 30,
(In thousands) | 2023 |  | 2022
Valuation allowance (1) | $ | (2,333) |  |  | (2,903) |
Federal tax effected NOL carryforwards (2) | 26,375 |  |  | 29,672 |
State tax effected NOL carryforwards (3) | 26,216 |  |  | 32,069 |
(1)As of November 30, 2023 and 2022, the deferred tax assets included valuation allowances primarily related to state net operating loss ("NOL") carryforwards that are not more likely than not to be utilized due to an inability to carry back these losses in most states and short carryforward periods that exist in certain states. (2)As of November 30, 2023 and 2022, the Company had federal tax effected NOL carryforwards that may be carried forward to offset future taxable income and begin to expire in 2029. (3)As of November 30, 2023 and 2022, the Company had state tax effected NOL carryforwards that may be carried forward from 10 to 20 years or indefinitely, depending on the tax jurisdiction, with certain losses expiring between 2023 and 2041. The following table summarizes the changes in gross unrecognized tax benefits:
| Years Ended November 30,
(In thousands) | 2023 |  | 2022 |  | 2021
Gross unrecognized tax benefits, beginning of year | $ | — |  |  | 12,285 |  |  | 12,285 |
Decreases due to settlements with tax authorities | — |  |  | (12,285) |  |  | — |
Gross unrecognized tax benefits, end of year | $ | — |  |  | — |  |  | 12,285 |
The following summarizes the changes in interest and penalties accrued with respect to gross unrecognized tax benefits:
| Years Ended November 30,
(In thousands) | 2023 |  | 2022
Accrued interest and penalties, beginning of the year | $ | — |  |  | 59,937 |
Accrual of interest and penalties (primarily related to state audits) | 95 |  |  | — |
Reduction of interest and penalties | (95) |  |  | (59,937) |
Accrued interest and penalties, end of the year | $ | — |  |  | — |
The IRS is currently examining the Company's federal income tax returns for fiscal year 2022, and certain state taxing authorities are examining various fiscal years. The final outcome of these examinations is not yet determinable. The statute of limitations for the Company's major tax jurisdictions remains open for examination for fiscal year 2015 and subsequent years. The Company participates in an IRS examination program, Compliance Assurance Process, "CAP". This program operates as a contemporaneous exam throughout the year in order to keep exam cycles current and achieve a higher level of compliance.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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