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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Schedule of income tax expense

The expense for income taxes for the year ended December 31, 2021 consisted of the following:

		Year Ended December 31, 2021
Current:
Federal		$	—
State and local			40
			40
Deferred:
Federal			—
State and local			—
			—
Income tax expense		$	40
Loss before income taxes after the Reverse Recapitalization		$	(7,093	)
Effective income tax rate			(0.6	)%

Schedule of reconciliation of income tax expense

A reconciliation of income tax expense with amounts computed at the federal statutory tax rate is as follows:

		Year Ended December 31, 2021
Computed tax (21%)		$	(1,489	)
Partnership outside basis adjustments			(8,827	)
Income tax benefit attributable to NCI			797
Change in valuation allowance			9,812
State income tax benefit, net of effect on federal tax			(190	)
Other, net (none in excess of 5% of computed tax)			(63	)
Income tax expense		$	40

Schedule of non-current deferred tax assets (liabilities)

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Non-current deferred tax assets (liabilities) were as follows:

		December 31, 2021
		Assets				Liabilities				Net
Investment in Nerdy LLC (a)		$	54,527			$	—			$	54,527
Net operating loss and credit carryforwards			5,829				—				5,829
Other items			127				—				127
Total gross deferred income taxes			60,483				—				60,483
Valuation allowance			(60,483	)			—				(60,483	)
Total deferred taxes		$	—			$	—			$	—

(a) The Company’s deferred tax asset for investment in partnership relates to excess tax outside basis over financial reporting outside basis in Nerdy LLC, which is treated as a partnership for U.S. federal income tax purposes.  

Summary of valuation allowance

The following table summarizes changes to the Company’s valuation allowance for the year ended December 31, 2021.

		Year Ended December 31, 2021
Balance, beginning of year		$	—
Reverse Recapitalization (a)			(50,671	)
Change in valuation allowance			(9,812	)
Balance, end of year		$	(60,483	)

(a) The initial recognition of the Company’s valuation allowance in connection with the Reverse Recapitalization was recorded to “Additional paid-in capital” on the Consolidated Balance Sheet.

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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Tabular disclosure of valuation allowances to reduce deferred tax assets to net realizable value, including identification of the deferred tax asset more likely than not will not be fully realized and the corresponding amount of the valuation allowance.

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