v3.25.2
Income Taxes
 12 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
While our fiscal year end for financial reporting purposes is June 30 of each year, our tax year end is August 31 of each year. The information presented in this footnote is based on our tax year end for each period presented, unless otherwise specified.
The determination of tax character of distributions was not determinable at the end of the fiscal year end. Final determination of tax character of distributions will not be final until we file our return for the tax year. For income tax purposes, dividends paid and distributions made to stockholders are reported as ordinary income, capital gains, non-taxable return of capital, or a combination thereof. The tax character of dividends paid to common stockholders during the tax years ended August 31, 2024, 2023, and 2022 were as follows:
 Tax Year Ended August 31,
 202420232022
Ordinary income$227,508 $243,085 $231,984 
Capital gain— — 49,719 
Return of capital71,414 44,838 — 
Total distributions paid to common stockholders$298,922 $287,923 $281,703 

The Company began issuing shares of Preferred Stock and declaring dividends on shares Preferred Stock outstanding during the tax year ended August 31, 2021. The tax character of dividends paid to preferred stockholders during the tax years ended August 31, 2024, 2023, and 2022 were as follows:
 Tax Year Ended August 31,
 202420232022
Ordinary income$99,253 $74,975 $22,551 
Capital gain— — 6,476 
Return of capital— — — 
Total distributions paid to preferred stockholders$99,253 $74,975 $29,027 
As of August 28, 2024 when our prior Form 10-K was filed for the year ended June 30, 2024, we estimated our distributions for the fiscal year then ended to be $389,263 of distributions of ordinary income and $6,459 to be return of capital. Subsequent to our filing date, we obtained more information from our underlying investments as to the character of the distributions for the tax year ended August 31, 2024, which resulted in changes to distributions previously disclosed in our Form 10-K filing. As a result of the change, our total distributable loss on our Consolidated Statements of Assets and Liabilities for the year ended June 30, 2024 changed from $497,299 to $436,279, with $61,020 being reclassified to return of capital from ordinary income. The remaining reclassification of tax distributions classified as return of capital for the tax year ended August 31, 2024 have been adjusted in the fiscal year ended June 30, 2025. This adjustment results in an increase to distributable earnings of $10,394 for the fiscal year ended June 30, 2024.
For the tax year ending August 31, 2025, the tax character of distributions paid to stockholders through August 31, 2025 is expected to be ordinary income and return of capital. However, due to the difference between our fiscal and tax year ends, the final determination of the tax character of distributions between ordinary income and return of capital will not be made until we file our tax return for the tax year ending August 31, 2025.
Taxable income generally differs from net increase in net assets resulting from operations for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized gains or losses, as unrealized gains or losses are generally not included in taxable income until they are realized. The following reconciles the net increase in net assets resulting from operations to taxable income for the tax years ended August 31, 2024, 2023, and 2022:
 Tax Year Ended August 31,
 202420232022
Net increase (decrease) in net assets resulting from operations$234,119 $(88,043)$735,337 
Net realized losses on investments434,238 40,795 22,375 
Net unrealized (gains) losses on investments(259,971)480,916 (405,414)
Other temporary book-to-tax differences(1)
(81,794)(148,147)(66,363)
Permanent differences62 27 30 
Taxable income before deductions for distributions
$326,654 (1)$285,548 $285,965 

(1) Temporary book-to-tax differences include timing recognition of CLO income, flow-through investment income/loss, and dividend income from portfolio companies
As of our most recent tax year ended August 31, 2024, we had no undistributed ordinary income in excess of cumulative distributions and no capital gain in excess of cumulative distributions.
Capital losses in excess of capital gains earned in a tax year may generally be carried forward and used to offset capital gains, subject to certain limitations. As of our most recent tax year ended August 31, 2024, we had a capital loss carryforward of $397,259 available for use in later tax years.
As of June 30, 2025, the cost basis of investments for tax purposes was $6,800,692 resulting in an estimated net unrealized loss of $127,176. As of June 30, 2024, the cost basis of investments for tax purposes was $7,429,121 resulting in an estimated net unrealized gain of $289,122. As of June 30, 2025, the gross unrealized gains and losses were $1,308,011 and $1,435,187, respectively. As of June 30, 2024, the gross unrealized gains and losses were $1,381,820 and $1,092,698, respectively. Due to the difference between our fiscal year end and tax year end, the cost basis of our investments for tax purposes as of June 30, 2025 and June 30, 2024 was calculated based on the book cost of investments as of June 30, 2025 and June 30, 2024, respectively, with cumulative book-to-tax adjustments for investments through August 31, 2024 and 2023, respectively.
In general, we may make certain adjustments to the classification of net assets as a result of permanent book-to-tax differences, which may include merger-related items, differences in the book and tax basis of certain assets and liabilities, and nondeductible federal excise taxes, among other items. During the tax year ended August 31, 2024, we increased total distributable earnings by $63, decreased accumulated realized losses by $21,530, and decreased capital in excess of par value by $21,593. During the tax year ended August 31, 2023, we increased total distributable earnings by $27 and increased accumulated realized losses by $622, and increased capital in excess of par value by $595. Due to the difference between our fiscal and tax year end, the reclassifications for the taxable year ended August 31, 2024, once finalized, were recorded in the fiscal year ending June 30, 2025 and the reclassifications for the taxable year ended August 31, 2023 were recorded in the fiscal year ended June 30, 2024.