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Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Note 10. Income Taxes The provision for income taxes was as follows for the year ended December 31, 2025:
|  | Year ended December 31, |  |
(in thousands) |  | 2025 |  |
Current |  |  |  |  |
Federal |  | $ |  | — |  |
State |  |  |  | — |  |
Total current income tax expense |  | $ |  | — |  |
Deferred |  |  |  |  |
Federal |  | $ |  | 17,309 |  |
State |  |  |  | 3,200 |  |
Total deferred income tax expense |  |  |  | 20,509 |  |
Total income tax expense |  | $ |  | 20,509 |  |
Taxable income generated from certain activities that do not qualify under REIT provisions is earned through the Company's TRSs and is subject to U.S. federal, state, and local income and franchise taxation. The following table reconciles the TRS U.S. federal statutory income tax rate to the TRS effective income tax rate for the year ended December 31, 2025:
|  |  | Year ended December 31,
|  |  | 2025 |  |
(in thousands) |  |  | Amount |  |  | Percent
U.S. Federal Statutory Tax Rate |  |  | $ |  | 17,309 |  |  |  | 21.0 |  | %
State and Local Income Taxes, Net of Federal Income Tax Effect (1) |  |  |  |  | 3,200 |  |  |  | 3.8 |  |
Effective Tax Rate |  |  | $ |  | 20,509 |  |  |  | 24.8 |  | %
(1) State taxes in California, Florida and New York made up the majority (greater than 50 percent) of the tax effect in this category. The following table presents the Company’s income taxes paid (net of refunds) disaggregated by jurisdiction for the year ended December 31, 2025. Income Taxes paid (net of refunds) were not made to any State or foreign jurisdiction and therefore, there are no amounts that are required to be reported by individual jurisdictions.
|  | Year ended December 31, |
(in thousands) |  | 2025 |
Federal |  | $ |  | 8,500 |
State |  |  |  | — |
Foreign |  |  |  | — |
Total |  | $ |  | 8,500 |
Deferred income taxes represent the net tax effects of temporary differences between the financial statement carrying amounts of certain 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 net deferred tax liabilities were as follows:
|  | At December 31, |
(in thousands) |  | 2025 |
Deferred tax assets: |  |  |  |
Capitalized interest expense |  | $ |  | 67,458 |
Capitalized management fee expense |  |  |  | 11,200 |
Net operating loss carryforward |  |  |  | 30,624 |
Total deferred tax assets, net of valuation allowance |  | $ |  | 109,282 |
Deferred tax liabilities: |  |  |  |
Land basis adjustments, Spin-Off, and acquired Rausch land assets |  | $ |  | 56,824 |
Homesite takedown adjustments |  |  |  | 13,981 |
Deferred option fee revenue |  |  |  | 115,810 |
Total deferred tax liabilities |  |  |  | 186,615 |
Deferred tax liabilities, net |  | $ |  | 77,333 |
As of December 31, 2025, the Company had federal and state net operating loss (“NOL”) carryforwards of approximately $123.1 million that may be carried forward indefinitely and do not expire. A reduction of the carrying amounts of deferred tax assets by a valuation allowance is required if, based on available evidence, it is more likely than not that such assets will not be realized. The Company evaluated its deferred tax assets as of December 31, 2025 and concluded that it is more likely than not that the deferred tax assets will be realized. This assessment considered all available positive and negative evidence, including recent financial performance, actual earnings, future reversals of existing temporary differences, projected future taxable income, and tax planning strategies. As such, a valuation allowance was not recorded against the deferred tax assets, including the NOL, as of December 31, 2025. The Company had no gross unrecognized tax benefits as of December 31, 2025. As of December 31, 2024, the Predecessor Millrose Business had federal and state NOL carryforwards of approximately $649.1 million that may be carried forward 10 to 20 years, or indefinitely, depending on the tax jurisdiction. The need to establish valuation allowances as of December 31, 2024 was assessed by the Predecessor Millrose Business 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 considered, 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 Predecessor Millrose Business’s experience with loss carryforwards not expiring unused and tax planning alternatives. Based on this assessment, the Predecessor Millrose Business determined that it would not be able to realize its net operating loss carryforwards and recorded a valuation allowance against its deferred tax asset, which also reduced income taxes and effective tax rate to zero as of December 31, 2024. As of December 31, 2024, the Predecessor Millrose Business had no gross unrecognized tax benefits.

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