Carlyle Secured Lending, Inc.CGBD

Carlyle Secured Lending, Inc. Income Taxes Disclosure

10-KFiled Feb 24, 20263 min read
15. TAX
The Company has not recorded a liability for any uncertain tax positions pursuant to the provisions of ASC 740, Income Taxes, as of December 31, 2025 and 2024.
In the normal course of business, the Company is subject to examination by federal and certain state, local and foreign tax regulators. As of December 31, 2025 and 2024, the Company had filed tax returns. The Company’s federal tax returns are generally subject to examination by the Internal Revenue Service for a period of three years after they are filed.
Book and tax basis differences relating to stockholder dividends and distributions and other permanent book and tax differences are reclassified among the Company’s capital accounts. In addition, the character of income and gains to be distributed is determined in accordance with income tax regulations that may differ from U.S. GAAP. As of December 31, 2025 and 2024, permanent differences primarily due to non-deductible excise tax, non-deductible offering costs, and the tax treatment of partnership investments resulted in a net increase in distributable earnings (loss) by $3,115 and $3,375, respectively, and net decrease in additional paid-in capital in excess of par by $3,115 and $3,375, respectively, on the Consolidated Statements of Assets and Liabilities. Total earnings and NAV were not affected.
The tax character of the distributions paid for the fiscal years ended December 31, 2025, 2024, and 2023 was as follows:
 Year Ended December 31,
 202520242023
Ordinary income$110,802 $98,589 $92,898 
Tax return of capital$— $— $— 
Income Tax Information and Distributions to Stockholders
As of December 31, 2025 and 2024, the components of accumulated earnings (deficit) on a tax basis were as follows:
As of December 31,
20252024
Undistributed ordinary income$53,410 $72,785 
Other book/tax temporary differences(1)
58 (10)
Capital loss carryforwards(252,003)(199,701)
Net unrealized appreciation (depreciation) on investments and currency unrealized appreciation (depreciation) on non-investment assets and liabilities(2)
2,840 (31,054)
Total accumulated earnings (deficit)$(195,695)$(157,980)
(1)Consists of the unamortized portion of organization costs as of December 31, 2025 and 2024, respectively.
(2)The difference between the book-basis and tax-basis unrealized appreciation (depreciation) on investments is attributable primarily to the tax treatment of partnership investments, the tax treatment of material modifications, and the tax treatment of corporate restructuring.
As of December 31, 2025 and 2024, the cost of investments for federal income tax purposes and gross unrealized appreciation and depreciation on investments and currency unrealized appreciation (depreciation) on non-investment
assets and liabilities were as follows:
As of December 31,
20252024
Cost of investments$2,453,300 $1,839,769 
Gross unrealized appreciation112,647 35,757 
Gross unrealized (depreciation)(109,807)(66,811)
Net unrealized appreciation (depreciation)$2,840 $(31,054)
For tax purposes, net realized capital losses may be carried over to offset future capital gains, if any. Funds are permitted to carry forward capital losses for an indefinite period, and such losses will retain their character as either short-term or long-term capital losses. As of December 31, 2025 and 2024, the Company had $252,003 and $199,701, of capital loss carryforwards, respectively, of which $66,883 and $52,879 were short-term capital loss carryforwards and $185,120 and $146,822 were long-term capital loss carryforwards.

About Income Taxes Disclosures

The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.

Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.

Other Available Disclosures

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