Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The components of income tax expense and deferred taxes on investments related to the Company’s Taxable Subsidiaries during the years ended December 31, 2021 and 2020 were as follows:

	Years Ended December 31,
	2021		2020
Current:
Federal	$	1,315,437	$	—
State	314,793		—
Total current tax expense	1,630,230		—
Deferred:
Federal	1,135,464		220,097
State	474,610		46,692
Total deferred tax expense	1,610,074		266,789
Income tax expense	$	3,240,304	$	266,789

Significant components of the Company’s deferred tax assets as of December 31, 2021 and 2020 were as follows:

	December 31,
	2021		2020
Deferred tax assets:
Carryforwards for net operating loss	$	532,822	$	248,641
Other	18,120		—
Valuation Allowance	(21,899)		—
Total deferred tax assets	529,043		248,641
Deferred tax liabilities:
Unrealized appreciation on investments	(2,405,906)		(515,430)
Total deferred tax liabilities	(2,405,906)		(515,430)
Deferred tax liabilities, net	$	(1,876,863)	$	(266,789)

The table below presents a reconciliation of tax expense the Company would be subject to if it were taxed as a corporation to the Company’s actual income tax expense incurred by its Taxable Subsidiaries for the years ended December 31, 2021 and 2020:

	Years Ended December 31,
	2021				2020
Tax expense computed at the federal statutory rate	$	9,707,417	21.0	%	$	6,365,762	21.0	%
State income tax expense net of federal benefit	789,404		1.7		73,491		0.2
Benefit of partnership structure	(7,256,517)		(15.7)		(6,172,464)		(20.3)
Income tax expense	$	3,240,304	7.0	%	$	266,789	0.9	%

The Company’s taxable subsidiary entities had net operating loss carryforwards for federal purposes of approximately $0.9 million as of December 2021 and 2020, to offset future taxable income. The federal net operating loss carryforwards do not expire.