INCOME TAXES (Tables)

12 Months Ended

Mar. 31, 2024

Our distributions for the tax years ended December 31, 2023, 2022 and 2021 were as follows:


Payment Date			Cash Dividend
Tax Year Ended December 31, 2023
March 31, 20231			0.58
June 30, 20231			0.59
September 30, 20232			0.62
December 31, 20232			0.63
			2.42

Tax Year Ended December 31, 2022
March 31, 2022			0.48
June 30, 20223			0.63
September 30, 2022			0.50
December 31, 20221			0.57
			2.18

Tax Year Ended December 31, 2021
March 31, 20214			0.52
June 30, 20214			0.53
September 30, 20214			0.54
December 31, 20215			0.97
			2.56

1.On each of these dates, the dividend paid included a supplemental dividend of $0.05 per share.

2.On each of these dates, the dividend paid included a supplemental dividend of $0.06 per share.

3.On June 30, 2022, CSWC paid a regular dividend of $0.48 per share and a special dividend of $0.15 per share.

4.On each of these dates, the dividend paid included a supplemental dividend of $0.10 per share.

5.On December 31, 2021, CSWC paid a regular dividend of $0.47 per share and a supplemental dividend of $0.50 per share.

The tax character of distributions paid for the tax years ended December 31, 2023 and 2022 was as follows (amounts in thousands):


	Twelve Months Ended December 31,
	2023		2022
Ordinary income	$	94,139	$	60,960
Distributions of long term capital gains	—		—
Distributions on tax basis1	$	94,139	$	60,960

1Includes only those distributions which reduce estimated taxable income.

Schedule of Book and Tax Basis Differences Relating to Dividends and Distributions

Book and tax basis differences relating to dividends and distributions to our shareholders and other permanent book and tax differences are typically reclassified among the CSWC’s capital accounts. In addition, the character of income and gains to be distributed is determined in accordance with income tax regulations that may differ from U.S. GAAP; accordingly, for the years ended March 31, 2024 and 2023, CSWC reclassified for book purposes amounts arising from permanent book/tax differences related to the tax treatment of return of capital and/or deemed distributions, tax treatment of investments upon disposition, and non-deductible expenses, as follows (amounts in thousands):


	Years Ended March 31,
	2024		2023
Additional capital	$	(8,849)	$	(6,420)
Total distributable earnings	8,849		6,420

Schedule of Net Assets Resulting from Operations to Estimated RIC Taxable Income

The following reconciles net increase in net assets resulting from operations to estimated RIC taxable income for the years ended March 31, 2024, 2023, and 2022:


	Years Ended March 31,
Reconciliation of RIC Distributable Income1	2024		2023		2022
Net increase in net assets from operations	$	83,389	$	33,093	$	42,815
Net unrealized (appreciation) depreciation on investments	(13,640)		18,589		(11,467)
(Expense/loss) income/gain recognized for tax on pass-through entities	(6,383)		962		3,753
Loss (gain) recognized on dispositions	16,074		(1,473)		152
Capital loss carryover2	26,449		12,796		(878)
Net operating (income) loss - wholly-owned subsidiary	(5,194)		809		(10,757)
Dividend income from wholly-owned subsidiary	2,000		1,068		4,000
Non-deductible tax expense	921		628		65
Loss on extinguishment of debt	(2,726)		(2,726)		12,268
Non-deductible compensation	3,665		3,243		3,679
Compensation related book/tax differences	1,116		812		36
Interest on non-accrual loans	5,636		3,343		4,171
Other book/tax differences	4,403		1,191		1,530
Estimated distributable income before deductions for distributions	$	115,710	$	72,335	$	49,367
Distributions3:
Ordinary	$	101,517	$	70,034	$	57,518



Estimated annual RIC undistributed taxable income	$	14,193	$	2,301	$	(8,151)

1The calculation of taxable income for each period is an estimate and will not be finally determined until the Company files its tax return each year. Final taxable income may be different than this estimate.

2At March 31, 2024, the Company had long-term capital loss carryforwards of $60.1 million to offset future capital gains. These capital loss carryforwards are not subject to expiration.

3Includes only those distributions which reduce estimated distributable income.

Schedule of Components of Estimated Tax Basis RIC Accumulated Earnings

As of March 31, 2024, 2023 and 2022, the components of estimated RIC accumulated earnings on a tax basis were as follows (amounts in thousands):


	Years Ended March 31,
Components of RIC Accumulated Earnings on a Tax Basis1	2024		2023		2022
Undistributed ordinary income - tax basis	$	28,845	$	16,070	$	12,682
Undistributed net realized (loss) gain	(60,056)		(30,201)		(17,252)
Unrealized (depreciation) appreciation on investments	(68,529)		(61,710)		(20,126)
Other temporary differences	(9,584)		(13,639)		—
Components of distributable earnings at year-end	$	(109,324)	$	(89,480)	$	(24,696)

Schedule of Deferred Tax Assets and Liabilities

The following table sets forth the significant components of the deferred tax assets and liabilities as of March 31, 2024 and March 31, 2023 (amounts in thousands):


	March 31, 2024		March 31, 2023
Deferred tax asset:
Net operating loss carryforwards	$	159	$	—
Interest	965		219
Total deferred tax asset	1,124		219
Deferred tax liabilities:
Net unrealized appreciation on investments	(11,395)		(11,413)
Net basis differences in portfolio investments	(1,726)		(923)
Total deferred tax liabilities	(13,121)		(12,336)
Total net deferred tax (liabilities) assets	$	(11,997)	$	(12,117)

Schedule of Significant Components of Income Tax Provision

The following table sets forth the significant components of income tax provision as of March 31, 2024, 2023 and 2022 (amounts in thousands):


	Years Ended March 31,
Components of Income Tax Provision	2024		2023		2022

Excise tax	$	872	$	630	$	65

Tax provision (benefit) related to Taxable Subsidiary	22		(301)		550

Other	50		—		—
Total income tax provision	$	944	$	329	$	615