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INCOME TAXES
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Income from operations before income taxes included income (loss) from domestic operations of $0.6 billion, $2.9 billion and $2.4 billion for the years ended December 31, 2023, 2022 and 2021, and income from foreign operations of $105 million, $135 million and $223 million for the years ended December 31, 2023, 2022 and 2021. Approximately $37 million, $35 million and $59 million of the Company’s income tax expense is attributed to foreign jurisdictions for the years ended December 31, 2023, 2022 and 2021.
A summary of the income tax (expense) benefit in the consolidated statements of income (loss) follows:
Year Ended December 31,
 202320222021
(in millions)
Income tax (expense) benefit:
Current (expense) benefit$(29)$(5)$(129)
Deferred (expense) benefit934 (593)(310)
Total$905 $(598)$(439)
The Federal income taxes attributable to consolidated operations are different from the amounts determined by multiplying the earnings before income taxes and noncontrolling interest by the expected Federal income tax rate of 21%. The sources of the difference and their tax effects were as follows:
Year Ended December 31,
 202320222021
(in millions)
Expected income tax (expense) benefit$(155)$(630)$(548)
Noncontrolling interest62 40 69 
Non-taxable investment income64 53 80 
Tax audit interest(23)(13)(14)
State income taxes(42)(63)(47)
Tax settlements/uncertain tax position release(4)— — 
Tax credits15 22 28 
Valuation allowance1,000 — — 
Other(12)(7)(7)
Income tax (expense) benefit$905 $(598)$(439)
The components of the net deferred income taxes are as follows:
December 31,
 20232022
 
Assets
Liabilities
Assets
Liabilities
(in millions)
Compensation and related benefits$230 $— $226 $— 
Net operating loss and credits151 — 240 — 
Reserves and reinsurance1,581 — 1,299 — 
DAC— 1,078 — 1,029 
Unrealized investment gains/losses1,472 — 2,012 — 
Investments— 217 — 235 
Other187 — 92 — 
Valuation allowance(234)— (1,570)— 
Total$3,387 $1,295 $2,299 $1,264 
During the fourth quarter of 2022, the Company established a valuation allowance of $1.6 billion against its deferred tax asset related to unrealized capital losses in the available for sale securities portfolio. Due to the potential need for liquidity in a macro stress environment the Company was not able to assert that it would hold the underlying securities to recovery. Adjustments to the valuation allowance due to changes in the portfolio’s unrealized capital loss are recorded in other comprehensive income. Adjustments to the valuation allowance due to new facts or evidence are recorded in net income.
As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. During the year ended December 31, 2023, management took actions to increase its available liquidity so that the Company has the ability and intent to hold the majority of securities in its available for sale portfolio to recovery. For liquidity and other purposes, the Company maintains a smaller pool of securities that it does not intend to hold to recovery. Based on all available evidence, as of December 31, 2023, the Company concluded that the deferred tax asset related to unrealized tax capital losses on securities that the Company intends to hold to recovery is more-likely-than-not to be realized and a valuation allowance is not necessary. The company maintains a valuation allowance against the deferred tax asset on available for sale securities that will not be held to recovery.
For the year ended December 31, 2023, the Company recorded a decrease to the valuation allowance of $336 million in other comprehensive income. For the year ended December 31, 2023, the Company recorded a decrease to the valuation allowance of $1 billion in net income. A valuation allowance of $234 million remains against the portion of the deferred tax asset that is still not more-likely-than-not to be realized.
The Company uses the aggregate portfolio approach related to the stranded or disproportionate income tax effects in accumulated other comprehensive income related to available for sale securities. Under this approach, the disproportionate tax effect remains intact as long as the investment portfolio remains.
The Company has Federal net operating loss carryforwards of $279 million and $810 million, for the years ending December 31, 2023 and 2022, respectively, which do not expire.

The Company provides income taxes on the unremitted earnings of non-U.S. corporate subsidiaries except to the extent that such earnings are indefinitely reinvested outside the United States. As of December 31, 2023, $30 million of undistributed earnings of non-U.S. corporate subsidiaries were permanently invested outside the United States. At existing applicable income tax rates, additional taxes of approximately $8 million would need to be provided if such earnings are remitted.
A reconciliation of unrecognized tax benefits (excluding interest and penalties) follows:
Year Ended December 31,
 202320222021
(in millions)
Balance, beginning of year$314 $323 $316 
Additions for tax positions of prior years11 (9)11 
Reductions for tax positions of prior years(3)— (4)
Additions for tax positions of current year— — — 
Settlements with tax authorities— — — 
Balance, end of year$322 $314 $323 
Unrecognized tax benefits that, if recognized, would impact the effective rate$59 $58 $67 
The Company recognizes accrued interest and penalties related to unrecognized tax benefits in tax expense. Interest and penalties included in the amounts of unrecognized tax benefits as of December 31, 2023 and 2022 were $86 million and $63 million, respectively. For 2023, 2022 and 2021, respectively, there were $23 million, $13 million and $14 million in interest expense (benefit) related to unrecognized tax benefits.
It is reasonably possible that the total amount of unrecognized tax benefits will change within the next 12 months due to the conclusion of IRS proceedings and the addition of new issues for open tax years. The possible change in the amount of unrecognized tax benefits cannot be estimated at this time.
As of December 31, 2023, tax years 2014 and subsequent remain subject to examination by the IRS.