Income Taxes

12 Months Ended

Dec. 31, 2023

Income Taxes [Abstract]

Income Taxes

Note 8. Income Taxes

The amount of taxable income to be paid out as a distribution is determined by the Board each quarter and generally is based upon the annual earnings estimated by management of the Company. Net capital gains, if any, are distributed at least annually, although the Company may decide to retain all or some of those capital gains for investment and pay corporate-level income taxes on those retained amounts. If the Company chooses to do so, this generally would increase expenses and reduce the amount available to be distributed to stockholders. In the event the Company’s taxable income (including any net capital gains) for a fiscal year fall below the amount of distributions declared and paid with respect to that year, however, a portion of the total amount of those distributions may be deemed a return of capital for tax purposes to the Company’s stockholders.

Because federal income tax regulations differ from accounting principles generally accepted in the United States, distributions in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Differences may be permanent or temporary in nature. Permanent differences are reclassified among capital accounts in the consolidated financial statements to reflect their appropriate tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.

The calculation of reclassifications due to permanent book-to-tax differences and tax character of distributions declared are performed at each calendar year end and have no impact on net assets.

The following permanent differences were reclassified for tax purposes for the years ended December 31, 2023, December 31, 2022 and for the period from May 14, 2021 to December 31, 2021:

	For the year ended
	December 31, 2023			December 31, 2022				For the period May 14, 2021* to December 31, 2021
Increase (decrease) in capital in excess of par value		$	-		$	202,722			$	10,594,332
Increase (decrease) in accumulated undistributed (overdistributed) earnings			-			(202,722	)			(10,594,332	)

* Date of Formation of the Company.

Taxable income generally differs from net increase (decrease) 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 unrealized gain (loss) on investments as investment gains and losses are not included in taxable income until they are realized. The temporary and permanent differences in the recognition of income and expenses for the years ended December 31, 2023, December 31, 2022 and for the period from May 14, 2021 to December 31, 2021 are primarily due to organizational cost amortization.

Capital losses in excess of capital gains earned in a tax year may generally be carried forward and used to offset capital gains, subject to certain limitations. Under the Regulated Investment Company Modernization Act of 2010, capital losses incurred after September 30, 2011 are not subject to expiration and retain their character as either short-term or long-term capital losses. As of December 31, 2023 and December 31, 2022, the Company had no short-term capital loss carryforwards. As of December 31, 2023 and December 31, 2022, the Company had no long-term capital loss carryforwards.

The following table reconciles the components of accumulated undistributed (overdistributed) earnings:

	For the year ended
	December 31, 2023			December 31, 2022			For the period May 14, 2021* to December 31, 2021
Net accumulated change in unrealized gain (loss)	$	(1,559,013	)	$	2,090,736		$	3,399,241
Undistributed ordinary income		701,484			399,145			-
Other cumulative effect of timing differences		(224,715	)		(242,886	)		(261,056	)
Total accumulated undistributed (overdistributed) earnings	$	(1,082,244	)	$	2,246,995		$	3,138,185

* Date of Formation of the Company.

For income tax purposes, distributions paid to stockholders are reported as ordinary income, return of capital, redemption, long term capital gains or a combination thereof. The following table provides the tax character of distributions declared for the years ended December 31, 2023, December 31, 2022 and for the period from May 14, 2021 to December 31, 2021:

	For the year ended
	December 31, 2023		December 31, 2022		For the period May 14, 2021* to December 31, 2021
Ordinary income	$	22,097,019	$	10,682,401	$	2,267,468
Redemption		-		-		13,457,540
Long-term capital gains		3,773		-		240,492
Total	$	22,100,792	$	10,682,401	$	15,965,500

* Date of Formation of the Company.

As of December 31, 2023, the estimated cost basis of investment for U.S. federal income tax purposes was $378,551,985, resulting in estimated net unrealized loss of $(1,559,013), comprised of estimated gross unrealized gains of $20,541,825 and gross unrealized losses of $22,100,838. As of December 31, 2022, the estimated cost basis of investment for U.S. federal income tax purposes was $301,104,946, resulting in estimated net unrealized gain of $2,090,736, comprised of estimated gross unrealized gains of $11,979,460, and gross unrealized losses of $9,888,724.