Income Taxes |
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| Income Taxes [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INCOME TAXES | 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 year ended December 31, 2025, the components of tax-basis distributable earnings differ from GAAP due to temporary and other book/tax differences, as follows (dollar amounts in thousands):
During the year ended December 31, 2025, permanent differences were principally related to non-deductible offering costs.
Additionally, GAAP requires that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. For the year ended December 31, 2025, the following table shows the reclassifications made:
The following table reconciles the increase in net assets resulting from operations to taxable income for the year ended December 31, 2025 (dollar amounts in thousands):
Under the Regulated Investment Company Modernization Act of 2010, net capital losses recognized by the Company may be 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 year ended December 31, 2025. The cost and unrealized gain (loss) of the Company’s investments, as calculated on a tax basis, at December 31, 2025 was as follows (dollar amounts in thousands):
The tax character of distributions paid during the year ended December 31, 2025 was as follows (dollar amounts in thousands):
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. |
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