v3.26.1
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes

Note 9. Income Taxes

Taxable income differs from net increase (decrease) in net assets resulting from operations primarily due to: (1) unrealized appreciation (depreciation) on investments, as gains and losses are generally not included in taxable income until they are realized; (2) income or loss recognition on exited investments, if any; (3) temporary differences in the recognition of expenses for book and tax purposes; and (4) other non-deductible expenses.

The Company makes certain adjustments to the classification of net assets as a result of permanent book-to-tax differences, which include differences in the book and tax basis of certain assets and liabilities, and non-deductible expenses, among other items. To the extent these differences are permanent, they are charged or credited to additional paid in capital, undistributed net investment income or undistributed net realized gains on investments, as appropriate. For the years ended December 31, 2025 and 2024, and the reporting period ended December 31, 2023, permanent differences were as follows:

 

December 31, 2025

 

 

December 31, 2024

 

 

December 31, 2023

 

Undistributed net investment income (loss)

$

632

 

 

$

961

 

 

$

379

 

Accumulated net realized gain (loss)

 

894

 

 

 

178

 

 

 

4

 

Paid in capital

 

(1,525

)

 

 

(1,139

)

 

 

(383

)

During the years ended December 31, 2025 and 2024, and the reporting period ended December 31, 2023, permanent differences were principally related to non-deductible offering costs.

The following reconciles the increase in net assets resulting from operations to taxable income for the years ended December 31, 2025 and 2024, and the reporting period ended December 31, 2023:

 

December 31, 2025

 

 

December 31, 2024

 

 

December 31, 2023

 

Net increase (decrease) in net assets resulting from operations

$

31,318

 

 

$

24,325

 

 

$

212

 

Net realized gain (loss)

 

63

 

 

 

1,952

 

 

 

—

 

Net change in unrealized appreciation (depreciation)

 

2,060

 

 

 

(26

)

 

 

(199

)

Expenses not currently deductible and income and realized losses not currently includable

 

(78

)

 

 

(78

)

 

 

1,107

 

Non-deductible expenses and income not includable

 

1,526

 

 

 

1,136

 

 

 

383

 

Taxable income net of capital loss carryforward

 

34,889

 

 

 

27,309

 

 

 

1,503

 

Capital loss carryforward

 

1,711

 

 

 

—

 

 

 

—

 

Taxable/distributable income

$

36,600

 

 

$

27,309

 

 

$

1,503

 

The components of accumulated under-distributed (over-distributed) earnings as calculated on a tax basis for the taxable years ended December 31, 2025 and 2024, and the reporting period ended December 31, 2023 are as follows:

December 31, 2025

 

 

December 31, 2024

 

 

December 31, 2023

 

Distributable ordinary income

$

7,954

 

 

$

1,787

 

 

$

255

 

Distributable capital gains

 

—

 

 

 

559

 

 

 

4

 

Net unrealized (appreciation) depreciation

 

(3,850

)

 

 

(1,728

)

 

 

199

 

Other temporary book/tax differences

 

(952

)

 

 

(1,029

)

 

 

(1,107

)

Capital loss carryforward

 

(1,711

)

 

 

—

 

 

 

—

 

Total accumulated earnings (losses) - net

$

1,441

 

 

$

(411

)

 

$

(649

)

Under the Regulated Investment Company Modernization Act of 2010, net capital losses recognized by the Company may get carried forward indefinitely, and retain their character as short-term and/or long-term losses. Any such losses will be deemed to arise on the first day of the next taxable year. The Company did not have any capital losses for the years ended December 31, 2025 and 2024, and the reporting period ended December 31, 2023.

The cost and unrealized gain (loss) of the Company’s investments, as calculated on a tax basis, at December 31, 2025, 2024, and 2023 are as follows:

December 31, 2025

 

 

December 31, 2024

 

 

December 31, 2023

 

Tax cost

$

571,192

 

 

$

653,701

 

 

$

70,883

 

Gross unrealized appreciation

 

3,266

 

 

 

4,135

 

 

 

317

 

Gross unrealized depreciation

 

(7,116

)

 

 

(5,863

)

 

 

(118

)

Net unrealized investment appreciation (depreciation) on investments

$

(3,850

)

 

$

(1,728

)

 

$

199

 

 

Management has analyzed the Company’s tax positions taken, or to be taken, on federal income tax returns for all open tax years and has concluded that no provision for income tax is required in the Company’s financial statements. The Company’s federal tax returns are subject to examination by the Internal Revenue Service for a period of three fiscal years after they are filed.