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Income Taxes
 12 Months Ended
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)202320222021
Current:
Federal$1,037,229 1,282,037 924,474 
State271,752 330,681 245,941 
$1,308,981 1,612,718 1,170,415 
Deferred:
Federal$(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
202320222021
Statutory rate21.00 %21.00 %21.00 %
State income taxes, net of federal income tax benefit4.09 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)
Other0.36 0.31 (0.29)
Effective rate23.96 %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)20232022
Deferred tax assets:
Inventory valuation adjustments$39,641 83,330 
Reserves and accruals193,156 199,451 
Net operating loss carryforwards52,591 61,741 
Capitalized expenses208,392 241,887 
Investments in unconsolidated entities65,254 16,311 
Employee stock incentive plan40,270 37,573 
Unrealized losses on investments in equity securities53,684 29,903 
Other assets51,785 52,770 
Total deferred tax assets704,773 722,966 
Valuation allowance(2,333)(2,903)
Total deferred tax assets after valuation allowance702,440 720,063 
Deferred tax liabilities:
Capitalized expenses151,912 177,726 
Deferred income168,316 253,659 
Other liabilities55,734 46,270 
Total deferred tax liabilities375,962 477,655 
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)20232022
Net deferred tax assets:
Homebuilding$163,917 154,143 
Financial Services36,821 15,376 
Multifamily54,786 26,675 
Lennar Other70,954 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)20232022
Valuation allowance (1)$(2,333)(2,903)
Federal tax effected NOL carryforwards (2)26,375 29,672 
State tax effected NOL carryforwards (3)26,216 32,069 
(1)As of November 30, 2023 and 2022, the deferred tax assets included valuation allowances primarily related to state net operating loss ("NOL") carryforwards that are not more likely than not to be utilized due to an inability to carry back these losses in most states and short carryforward periods that exist in certain states.
(2)As of November 30, 2023 and 2022, the Company had federal tax effected NOL carryforwards that may be carried forward to offset future taxable income and begin to expire in 2029.
(3)As of November 30, 2023 and 2022, the Company had state tax effected NOL carryforwards that may be carried forward from 10 to 20 years or indefinitely, depending on the tax jurisdiction, with certain losses expiring between 2023 and 2041.
The following table summarizes the changes in gross unrecognized tax benefits:
Years Ended November 30,
(In thousands)202320222021
Gross unrecognized tax benefits, beginning of year$— 12,285 12,285 
Decreases due to settlements with tax authorities— (12,285)— 
Gross unrecognized tax benefits, end of year$— — 12,285 
The following summarizes the changes in interest and penalties accrued with respect to gross unrecognized tax benefits:
Years Ended November 30,
(In thousands)20232022
Accrued interest and penalties, beginning of the year$— 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.