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Taxes and Distributions
 12 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
Taxes and Distributions

8. TAXES AND DISTRIBUTIONS

Distributions from net investment income and net realized capital gains are determined in accordance with U.S. federal tax regulations, which may materially differ from amounts determined in accordance with GAAP. These book-to-tax differences are either temporary or permanent in nature. To the extent these differences are permanent, they are reclassified to undistributed net investment income, accumulated net realized gain or paid-in-capital, as appropriate. Distributions from net realized capital gains, if any, are normally declared and paid annually, but the Company may make distributions on a more frequent basis to comply with the distribution requirements for RICs under the Code.

As of September 30, 2023 and 2022, the cost of investments for federal income tax purposes approximates amortized cost reported in the Consolidated Schedule of Investments.

The following amounts were reclassified for tax purposes (in thousands):

 

 

Years Ended September 30,

 

 

 

2023

 

 

2022

 

 

2021

 

Decrease in paid-in capital

 

$

(531

)

 

$

(492

)

 

$

(369

)

Decrease in accumulated net realized loss

 

 

(1,645

)

 

 

1,118

 

 

 

(292

)

Increase in undistributed net investment income

 

 

2,176

 

 

 

(625

)

 

 

661

 

The following reconciles net increase in net assets resulting from operations to taxable income:

 

 

Years Ended September 30,

 

 

 

2023

 

 

2022

 

 

2021

 

Net increase in net assets resulting from operations

 

$

39,261

 

 

$

3,453

 

 

$

56,516

 

Net realized loss on investments

 

 

16,155

 

 

 

11,106

 

 

 

12,796

 

Net change in unrealized depreciation (appreciation) on investments and debt

 

 

12,075

 

 

 

34,023

 

 

 

(29,686

)

Other book-to-tax differences

 

 

(5,081

)

 

 

(549

)

 

 

3,153

 

Other non-deductible expenses

 

 

1,924

 

 

 

993

 

 

 

846

 

Taxable income before dividends paid deduction

 

$

64,334

 

 

$

49,026

 

 

$

43,625

 

The components of undistributed taxable income on a tax basis and reconciliation to accumulated surplus on a book basis are as follows (in thousands):

 

 

As of September 30,

 

 

 

2023

 

 

2022

 

 

2021

 

Undistributed ordinary income – tax basis

 

$

17,158

 

 

$

11,141

 

 

$

8,415

 

Short-term realized loss carried forward

 

 

(16,544

)

 

 

(24,655

)

 

 

(6,452

)

Long-term realized loss carried forward

 

 

(78,796

)

 

 

(65,977

)

 

 

(59,136

)

Distributions payable and other book to tax differences

 

 

(5,959

)

 

 

3,933

 

 

 

(9,669

)

Net unrealized appreciation (depreciation) of investments and debt

 

 

(27,499

)

 

 

(15,423

)

 

 

18,600

 

Total accumulated deficit – book basis

 

$

(111,641

)

 

$

(90,981

)

 

$

(48,242

)

 

The tax characteristics of distributions declared are as follows (in thousands):

 

 

Years Ended September 30,

 

 

 

2023

 

 

2022

 

 

2021

 

Ordinary income (including short-term gains, if any)

 

$

60,451

 

 

$

46,685

 

 

$

44,207

 

Long-term capital gain

 

 

—

 

 

 

—

 

 

 

—

 

Total distributions

 

$

60,451

 

 

$

46,685

 

 

$

44,207

 

Total distributions per share based on weighted average shares

 

$

1.19

 

 

$

1.14

 

 

$

1.14