v3.26.1
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The tax character of the shareholder distributions attributable to fiscal year ended December 31, 2025 were as follows:
Year Ended
December 31, 2025
Ordinary Income(1)
$8,820 
Long Term Capital Gains (Losses)— 
Total$8,820 
(1)For the years ended December 31, 2025 97.13% of ordinary income qualified as interest related dividend which is exempt from U.S. withholding tax applicable to non-U.S. shareholders.

The following reconciles the increase in net assets resulting from operations for the period from the BDC Election Date through December 31, 2025, to taxable income from the period from the BDC Election Date through December 31, 2025:
Year Ended
December 31, 2025
Increase (decrease) in net assets resulting from operations
$6,504 
Adjustments:
Net unrealized (gains) losses on investments2,622 
Other income (loss) for tax purposes, not book— 
Deferred organization costs428 
Other expenses not currently deductible155 
Other book-tax differences626 
Taxable Income$10,335 
The tax basis components of distributable earnings for the period from the BDC Election Date through December 31, 2025 were as follows:
December 31, 2025
Undistributed net investment income - tax basis$1,515 
Undistributed net realized gains (losses) - tax basis— 
Net unrealized gains (losses) on investments(7,649)
Other temporary differences(688)
Total distributable earnings - book basis$(6,822)
Note: Taxable income is an estimate and is not fully determined until the Company’s tax return is filed. The Company's tax year end is December 31.
Taxable income generally differs from increase in net assets resulting from operations 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 Company makes certain adjustments to the classification of shareholders’ equity as a result of permanent book-to-tax differences, which include differences in the book and tax basis of certain assets and liabilities, and nondeductible federal taxes or losses among other items. To the extent these differences are permanent, they are charged or credited to additional paid in capital, or distributable earnings, as appropriate.
For the period from the BDC Election Date through December 31, 2025, the Company decreased distributable earnings and increased additional paid in capital by $4.5 million, which was primarily attributable to non-deductible expenses and tax treatment of contributed assets.
The Company’s wholly-owned subsidiary, CL LSF Blocker, LLC, is a taxable subsidiary in which the Company holds certain investments. CL LSF Blocker, LLC is not consolidated for U.S. federal income tax purposes and may generate income tax expense as a result of its ownership of certain portfolio companies. The income tax expense, or benefit, and the related tax assets and liabilities, if any, are reflected in our Statement of Operations.
The tax cost of the Company’s investments for the period from the BDC Election Date through December 31, 2025 was $465.0 million, resulting in estimated gross unrealized gains and losses of $1.6 million and $3.3 million, respectively.
To the extent that the Company determines that its estimated current year annual taxable income will exceed its estimated current year dividends from such taxable income, the Company accrues excise tax on estimated excess taxable income. For the period from the BDC Election Date through the year ended December 31, 2025, a net expense of less than $0.1 million was recorded for U.S. federal excise tax.