5. UNDISTRIBUTED NET REALIZED GAINS (LOSSES) ON INVESTMENTS

Distributions made by RICs often differ from aggregate GAAP-basis undistributed net investment income and accumulated net realized gains (total GAAP-basis net realized gains). The principal cause is that required minimum fund distributions are based on income and gain amounts determined in accordance with federal income tax regulations, rather than GAAP. The differences created can be temporary, meaning that they will reverse in the future, or they can be permanent. In subsequent periods, when all or a portion of a temporary difference becomes a permanent difference, the amount of the permanent difference will be reclassified to "additional capital."

The following table sets forth a summary of our net realized gains on transactions by category:

Net Realized Gains on Transactions In	For the Tax Year Ended December 31
Investment Securities of	2011		2010
Control Investments	$	-	$	70,294,097
Affiliated Investments		−		−
Non-Control/Non-Affiliated Investments		4,465,088		31,833
Net realized gain on investments before taxes	$	4,465,088	$	70,325,930
Income tax expense		1,248,932		24,577,557
Net realized gains on investments	$	3,216,156	$	45,748,373
Net realized gains on investment (for tax purposes)	$	3,568,376	$	70,221,589

As a result of our election to retain long-term capital gains, we incurred federal taxes on behalf of our shareholders in the amounts listed in the table above. As of March 31, 2012, we had undistributed long-term capital gains of $498,438. As of March 31, 2011 we had undistributed long-term capital losses of $6,863,347.