Income Taxes (Tables)

9 Months Ended

Sep. 30, 2022

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

The following table reconciles net increase in net assets resulting from operations to taxable income:


	Nine Months Ended September 30,
	2022		2021
Net (decrease) increase in net assets resulting from operations	$	(1,714,212)	$	2,252,681
Net change in unrealized depreciation (appreciation) on investments	3,444,211		(390,245)
Net change in unrealized depreciation on obligations under participation agreements	(42,128)		(8,408)
(Reversal of incentive fees) incentive fees on capital gains	(102,160)		167,393
Income tax expense	605,787		—
Other temporary differences (1)	(475,851)		268,279
Total taxable income	$	1,715,647	$	2,289,700

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(1)Other temporary differences primarily related to capitalization and amortization of transaction-related fees.

Federal Income Tax Note [Table Text Block]

The following table reflects, for tax purposes, the estimated sources of the cash distributions that Terra BDC has paid on its common stock:


	Nine Months Ended September 30,
	2022				2021
Source of Distribution	Distribution Amount (1)(2)		%		Distribution Amount (1)		%
Return of capital	$	789,506	28.6	%	$	577,226	20.1	%
Net investment income	1,970,476		71.4	%	2,289,700		79.9	%
Distributions on a tax basis:	$	2,759,982	100.0	%	$	2,866,926	100.0	%

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(1)The Distribution Amount and Percentage reflected are estimated figures. The actual source of distributions is calculated in connection with the filing of Terra BDC’s tax return.

(2)The TRS’s taxable income is not available for distribution to Terra BDC’s stockholders until the income is distributed up to the parent company. For the nine months ended September 30, 2022, all of the TRS’s taxable income were distributed to the parent company.