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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Stratus’ provision for income taxes consists of the following (in thousands):
| Years Ended December 31,
| 2024 |  | 2023
Current | $ | 422 |  |  | $ | 1,659 |
Deferred | 20 |  |  | (135) |
Provision for income taxes | $ | 442 |  |  | $ | 1,524 |
The components of deferred income taxes follow (in thousands):
| December 31,
| 2024 |  | 2023
Deferred tax assets and liabilities: |  |  |
Real estate, commercial leasing assets and facilities | $ | 8,427 |  |  | $ | 8,548 |
Employee benefit accruals | 821 |  |  | 923 |
Other assets | 4,132 |  |  | 4,012 |
Charitable Contributions | 2 |  |  | — |
Net operating loss credit carryforwards | 2 |  |  | 2 |
Other liabilities | (3,924) |  |  | (3,553) |
Valuation allowance | (9,307) |  |  | (9,759) |
Deferred tax assets, net | $ | 153 |  |  | $ | 173 |
Stratus continues to maintain a valuation allowance on substantially all of its remaining net deferred tax assets. In evaluating the recoverability of the remaining deferred tax assets, management considered available positive and negative evidence, giving greater weight to the uncertainty regarding projected future financial results. Upon a change in facts and circumstances, management may conclude that sufficient positive evidence exists to support a reversal of, or decrease in, the valuation allowance in the future, which would favorably impact Stratus’ results of operations. Stratus’ future results of operations may be negatively impacted by an inability to realize a tax benefit for future tax losses or for items that will generate additional deferred tax assets that are not more likely than not to be realized. Stratus’ future results of operations may be favorably impacted by reversals of valuation allowances if Stratus is able to demonstrate sufficient positive evidence that its deferred tax assets will be realized. Reconciliations of the United States (U.S.) federal statutory tax rate to Stratus’ effective income tax rate follow (dollars in thousands):
| Years Ended December 31,
| 2024 |  | 2023
| Amount |  | Percent |  | Amount |  | Percent
Income tax benefit computed at the federal statutory income tax rate | $ | (308) |  |  | 21 | % |  | $ | (3,144) |  |  | 21 | %
Adjustments attributable to: |  |  |  |  |  |  |
(Decrease) increase in valuation allowance | (813) |  |  | 56 |  |  | 3,574 |  |  | (24) |
Noncontrolling interests | 810 |  |  | (55) |  |  | 355 |  |  | (2) |
Executive compensation limitation | 362 |  |  | (25) |  |  | 197 |  |  | (1) |
State taxes | 228 |  |  | (16) |  |  | (45) |  |  | — |
Net, other | 163 |  |  | (11) |  |  | 587 |  |  | (4) |
Provision for income taxes | $ | 442 |  |  | (30) | % |  | $ | 1,524 |  |  | (10) | %
Stratus paid state margin taxes totaling $205 thousand in 2024 and federal income taxes and state margin taxes of $1.5 million in 2023. Stratus received a $68 thousand and $40 thousand state margin tax refunds in 2024 and 2023, respectively. During 2023, Stratus incurred U.S. federal current income taxes and state income taxes primarily due to taxable income generated from cash received in the Holden Hills Phase 1 transaction discussed in Note 2. Uncertain Tax Positions. As of December 31, 2024 and December 31, 2023, Stratus had no unrecognized tax benefits. Stratus records liabilities offsetting the tax provision benefits of uncertain tax positions to the extent it estimates that a tax position is more likely than not to not be sustained upon examination by the taxing authorities. Stratus has elected to classify any interest and penalties related to income taxes within income tax expense in its consolidated statements of comprehensive income (loss). As of December 31, 2024, no such interest costs have been accrued. Stratus files both U.S. federal income tax and state margin tax returns. With limited exceptions, Stratus is no longer subject to U.S. federal income tax examinations by tax authorities for the years prior to 2020 and state margin tax examinations for the years prior to 2020. On August 16, 2022, the Inflation Reduction Act of 2022 (the IR Act) was enacted in the United States. Among other provisions, the IR Act imposes a new one percent excise tax on the fair market value of net corporate stock repurchases made by covered corporations, effective for tax years beginning after December 31, 2022. The excise tax did not have a material effect on Stratus’ consolidated financial statements. Refer to Note 8 for discussion of Stratus’ share repurchase programs.

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