|6 Months Ended|
Jun. 30, 2023
|Income Tax Disclosure [Abstract]|
Sunlight calculates the provision for income taxes during interim periods by applying an estimate of the forecasted annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss or loss excluding unusual or infrequently occurring discrete items) for the reporting period. The income tax benefit was $0.0 million and $4.1 million for the six months ended June 30, 2023 and 2022, respectively. Sunlight’s effective tax rate was 0.0% and 19.3% for the six months ended June 30, 2023 and 2022, respectively. The difference between Sunlight’s statutory and effective tax rate is primarily due to the permanent adjustments for noncontrolling interest in subsidiaries of $14.3 million and changes in valuation allowance of $21.3 million.
Sunlight recognizes tax benefits for uncertain tax positions only if it is more likely than not that the position is sustainable based on its technical merits. Interest and penalties on uncertain tax positions are included as a component of the provision for income taxes in Sunlight's Unaudited Condensed Consolidated Statements of Operations. Any uncertain tax position taken by any of the Class EX unitholders is not an uncertain tax position of Sunlight Financial LLC.As of June 30, 2023 and December 31, 2022, Sunlight had net deferred tax liabilities of $0.8 million and $0.7 million, comprised of $35.2 million and $14.0 million gross deferred tax assets, less valuation allowances of $31.7 million and $10.4 million, and $4.3 million and $4.3 million of gross deferred tax liability, respectively.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef