Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Note 8. Income Taxes

Taxable income differs from net increase (decrease) in net assets resulting from operations primarily due to: (1) unrealized appreciation (depreciation) on investments, as gains and losses are generally not included in taxable income until they are realized; (2) income or loss recognition on exited investments; and (3) other non-deductible expenses.

The Company makes certain adjustments to the classification of net assets as a result of permanent book-to-tax differences, which include differences in the book and tax basis of certain assets and liabilities, and non-deductible expenses, among other items. To the extent these differences are permanent, they are charged or credited to additional paid in capital, undistributed net investment income or undistributed net realized gains on investments, as appropriate. For the year ended December 31, 2023 permanent differences were as follows:

	For the Year Ended December 31, 2023
Undistributed net investment income (loss)	$	488,192
Accumulated net realized gain (loss)		(57,473	)
Paid In Capital	$	(430,719	)

During the year ended December 31, 2023 permanent differences were principally related to non-deductible offering costs and the tax treatment of underlying fund investments.

The following reconciles the increase in net assets resulting from operations to taxable income for the years ended December 31, 2023:

	For the Year Ended December 31, 2023
Net increase (decrease) in net assets resulting from operations	$	20,364,991
Net unrealized (appreciation) depreciation		(7,155,205	)
Realized gain (loss) for tax not included in book income		(346,768	)
Non-deductible capital gains incentive fee		1,090,162
Other timing differences and non-deductible expenses		428,374
Realized losses for tax not recognized		—
Total Taxable/distributable income	$	14,381,554

The components of accumulated gains / losses as calculated on a tax basis for the taxable year ended December 31, 2023 as follows:

	For the Year Ended December 31, 2023
Distributable ordinary income		1,161,852
Capital loss carryfoward		—
Other temporary book/tax differences		(1,087,817	)
Net unrealized appreciation/(depreciation) on investments		7,501,973
Total accumulated under-distributed (over-distributed) earnings		7,576,008

Under the Regulated Investment Company Modernization Act of 2010, net capital losses recognized by the Company may get carried forward indefinitely, and retain their character as short‐term and/or long‐term losses. Any such losses will be deemed to arise on the first day of the next taxable year. Capital losses for the year ended December 31, 2023, which will be deemed to arise on the first day of the tax year ended December 31, 2024, were as follows:

	For the Year Ended December 31, 2023
Capital loss carryfoward	$	—

The cost and unrealized gain (loss) of the Company’s investments, as calculated on a tax basis, at December 31, 2023 as follows:

	For the Year Ended December 31, 2023
Gross unrealized appreciation		7,895,221
Gross unrealized depreciation		(393,248	)
Net unrealized appreciation (depreciation) earnings	$	7,501,973
Tax cost of investments	$	344,876,547

The difference between GAAP-basis and tax basis unrealized gains (losses) is attributable primarily to differences in the tax treatment of underlying fund investments.

Of the dividends declared during the year ended December 31, 2023, $13,219,702 were derived from ordinary income as determined on a tax basis.

KLCC SPV GS1 LLC, a wholly owned subsidiary formed in 2023, is a Delaware limited liability company which has elected to be treated as a corporation for U.S. tax purposes. As such, KLCC SPV GS1 LLC is subject to U.S. Federal, state and local taxes. For the Company’s tax year ended December 31, 2023, KLCC SPV GS1 LLC activity did not result in a material provision for income taxes.

Management has analyzed the Company's tax positions taken, or to be taken, on federal income tax returns for all open tax year and has concluded that no provision for income tax is required in the Company’s 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.