Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

11. Income Taxes

The tax character of shareholder distributions attributable to fiscal year ended December 31, 2023 was as follows:

	For the year ended
	December 31, 2023
Ordinary Income	$	107,004
Long Term Capital Gains		—
Total	$	107,004

(1)For the year ended December 31, 2023, 88.32% of ordinary income qualified as interest related dividend which is exempt from U.S. withholding tax applicable to non-U.S. shareholders.

For the year ended December 2022, there were no distributions.

The following reconciles the increase in net assets resulting from operations for the fiscal years ended December 31, 2023 and 2022, to taxable income at December 31, 2023 and 2022:

	For the year ended			For the year ended
	December 31, 2023			December 31, 2022
Increase (decrease) in net assets resulting from    operations	$	183,989		$	3,847
Adjustments:
Net unrealized (gains) losses on investments		(56,755	)		1,663
Other income (loss) for tax purposes, not book		7,579			1,211
Deferred organization costs		(146	)		(47	)
Other expenses not currently deductible		1,547			2,382
Other book-tax differences		6,958			—
Taxable Income	$	143,172		$	9,056

The tax basis components of distributable earnings for the year ended December 31, 2023 and for the period from April 5, 2022 (Inception) through December 31, 2022 were as follows:

	December 31, 2023			December 31, 2022
Undistributed net investment income - tax basis	$	89,489		$	9,056
Net unrealized gains (losses) on investments		45,694			(2,875	)
Other temporary differences		(52,607	)		(2,088	)
Total distributable earnings - book basis	$	82,576		$	4,093

Note: Taxable income is an estimate and is not fully determined until the Company’s tax return is filed. The Company's tax year end is December 31.

Taxable income generally differs from increase in net assets resulting from operations due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized gains or losses, as unrealized gains or losses are generally not included in taxable income until they are realized.

The Company makes certain adjustments to the classification of shareholders’ equity as a result of permanent book-to-tax differences, which include differences in the book and tax basis of certain assets and liabilities, and nondeductible federal taxes or losses among other items. To the extent these differences are permanent, they are charged or credited to additional paid in capital, or distributable earnings, as appropriate.

For the year ended December 31, 2023 and 2022, the Company increased distributable earnings and decreased additional paid in capital by $1.5 million and $0.2 million, respectively, which was primarily attributable to U.S. federal excise taxes.

The Company’s wholly-owned subsidiary, Sixth Street LP Holding II, LLC, is a taxable subsidiary in which the Company holds certain investments. Sixth Street LP Holding II, LLC is not consolidated for U.S. federal income tax purposes and may generate income tax expense as a result of its ownership of certain portfolio companies. The income tax expense, or benefit, and the related tax assets and liabilities, if any, are reflected in our Statement of Operations.

The tax cost of the Company’s investments as of December 31, 2023 was $3,047,224, resulting in estimated gross unrealized gains and losses of $69,618 and $23,923, respectively. The tax cost of the Company’s investments as of December 31, 2022 was $810,241, resulting in estimated gross unrealized gains and losses of $2,806 and $5,681, respectively.

To the extent that the Company determines that its estimated current year annual taxable income will exceed its estimated current year dividends from such taxable income, the Company accrues excise tax on estimated excess taxable income. For the year ended December 31, 2023 and for the period from April 5, 2022 (Inception) through December 31, 2022, a net expense of $1.5 million and $0.2 million, respectively, was recorded for U.S. federal excise tax.