Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Note 10. Income Taxes

For income tax purposes, distributions made to stockholders are reported as ordinary income, capital gains, non-taxable return of capital, or a combination thereof. The final determination of the tax character of distributions will not be made until we file our tax return for each tax year and the tax characteristics of all distributions will be reported to stockholders on Form 1099 after the end of each calendar year. The tax character of distributions paid to stockholders during the tax periods ended December 31, 2023, December 31, 2022 and March 31, 2022 were as follows:

	Twelve Months Ended December 31,			Nine Months Ended December 31,			Twelve Months Ended March 31,
		2023			2022			2022
Ordinary income	$		99,259	$		68,028	$		92,762
Capital gains			—			—			—
Return of capital			—			—			—
Total distributions paid to stockholders	$		99,259	$		68,028	$		92,762

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 table reconciles the net increase in net assets resulting from operations to taxable income for the tax years ended December 31, 2023, December 31, 2022 and March 31, 2022:

	Twelve Months Ended December 31,				Nine Months Ended December 31,				Twelve Months Ended March 31,
		2023				2022				2022
Net increase (decrease) in net assets resulting from operations	$		118,760		$		22,940				82,364
Adjustments:
Net realized losses (gains)			(200	)			69,239				67,367
Net change in unrealized losses (gains)			(2,561	)			(18,036	)			(53,770	)
Income not currently taxable			—				—				—
Income (loss) recognized for tax but not book			26,064				(1,419	)			4,596
Expenses not currently deductible			—				—				—
Expenses incurred for tax but not book			—				—				—
Realized gain/loss differences (1)			(7,084	)			(7,723	)			(13,316	)
Taxable income before deductions for distributions	$		134,979		$		65,001		$		87,241

(1)These pertain to book income/losses treated as capital gains/losses for tax purposes or book realized gains/losses treated as ordinary income/losses for tax purposes.

The following table shows the components of accumulated losses on a tax basis for the twelve months ended December 31, 2023, and the nine months ended December 31, 2022 and twelve months ended March 31, 2022:

	Twelve Months Ended December 31,				Nine Months Ended December 31,				Twelve Months Ended March 31,
		2023				2022				2022
Undistributed ordinary income	$		59,879				24,468				56,120
Capital loss carryforward			(920,914	)			(880,548	)			(817,268	)
Other temporary book-to-tax differences			—				—				(24,678	)
Unrealized appreciation (depreciation)			(237,438	)			(262,999	)			(288,164	)
Total accumulated under-distributed (over-distributed) earnings	$		(1,098,473	)	$		(1,119,079	)	$		(1,073,990	)

On December 22, 2010, the Regulated Investment Company Modernization Act (the “Act”) was enacted which changed various technical rules governing the tax treatment of RICs. The changes are generally effective for taxable years beginning after the date of enactment. Under the Act, the Company will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term losses rather than being considered all short-term as under previous law.

As of December 31, 2023, the Company had a post-enactment short-term capital loss carryforward of $221,933 and long-term capital loss carryforward of $698,980. As of December 31, 2022, the Company had a post-enactment short-term capital loss carryforward of $226,846 and long-term capital loss carryforward of $653,700. As of March 31, 2022, the Company had a post-enactment short-term capital loss carryforward of $237,283 and long-term capital loss carryforward of $579,985.

As of December 31, 2023, the Company had no pre-enactment net capital loss carryforward. None of the pre-enactment net capital loss carryforwards were utilized in the past three years and none of the pre-enactment net capital loss carryforwards expired on December 31, 2023.

For tax purposes, the Company may elect to defer any portion of a post-October capital loss or late-year ordinary loss to the first day of the following fiscal year.

As of December 31, 2023, the Company deferred no late-year ordinary losses which are deemed to arise on January 1, 2024. As of December 31, 2022, the Company deferred no late-year ordinary losses which are deemed to arise on January 1, 2023. As of March 31, 2022, the Company deferred no late-year ordinary losses which are deemed to arise on April 1, 2022.

As of December 31, 2023, the Company deferred no post-October capital loss deemed to arise on January 1, 2024. As of December 31, 2022, the Company deferred no post-October capital loss deemed to arise on January 1, 2023. As of March 31, 2022, the Company had deferred post-October capital loss of $1,765 deemed to arise on April 1, 2022.

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 consolidated 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.

In general, we may make certain reclassifications to the components of net assets as a result of permanent book-to-tax differences and book-to-tax differences relating to stockholder distributions. Accordingly, as of December 31, 2023, we adjusted accumulated net realized loss by $26,573 to $865,439 and overdistributed net investment income by ($25,468) to ($23,639). Total earnings and net asset value were not affected. As of December 31, 2022, we adjusted accumulated net realized loss by $7,716 to $884,496 and overdistributed net investment income by ($7,714) to ($22,624). Total earnings and net asset value were not affected.