Goldman Sachs BDC, Inc. Income Taxes Disclosure
11. TAX INFORMATION
The tax character of distributions was as follows:
|
|
For the Years Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Distributions paid from: |
|
|
|
|
|
|
|
|
|
|||
Ordinary Income |
|
$ |
216,756 |
|
|
$ |
208,488 |
|
|
$ |
197,124 |
|
Net Long-Term Capital Gains |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total Taxable Distributions |
|
$ |
216,756 |
|
|
$ |
208,488 |
|
|
$ |
197,124 |
|
The components of Accumulated Earnings (Losses) on a tax basis were as follows:
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
|
December 31, 2023 |
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|||
Undistributed Ordinary Income—net |
|
$ |
108,725 |
|
|
$ |
152,038 |
|
|
$ |
118,026 |
|
Undistributed Long-Term Capital Gains |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total Undistributed Earnings |
|
$ |
108,725 |
|
|
$ |
152,038 |
|
|
$ |
118,026 |
|
Capital Loss Carryforward (1): |
|
|
|
|
|
|
|
|
|
|||
Perpetual Long-Term |
|
$ |
(318,245 |
) |
|
$ |
(297,091 |
) |
|
$ |
(138,282 |
) |
Perpetual Short-Term |
|
|
(100,239 |
) |
|
|
(29,987 |
) |
|
|
(12,358 |
) |
Total capital loss carryforwards |
|
$ |
(418,484 |
) |
|
$ |
(327,078 |
) |
|
$ |
(150,640 |
) |
Timing Differences (Organizational Costs, Post-October Capital Loss Deferral and Late Year Ordinary Loss Deferral) |
|
|
(2,216 |
) |
|
|
(24,198 |
) |
|
|
(50,451 |
) |
Unrealized Earnings (Losses)—net |
|
|
(144,720 |
) |
|
|
(174,432 |
) |
|
|
(141,514 |
) |
Total Accumulated Earnings (Losses)—net |
|
$ |
(456,695 |
) |
|
$ |
(373,670 |
) |
|
$ |
(224,579 |
) |
The Company's ability to utilize its capital loss carryforwards is subject to an annual limitation under section 382 of the Code.
The Company’s aggregate unrealized appreciation and depreciation on investments based on cost for U.S. federal income tax purposes were as follows:
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
|
December 31, 2023 |
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|||
Tax cost |
|
$ |
3,439,934 |
|
|
$ |
3,677,186 |
|
|
$ |
3,555,001 |
|
Gross unrealized appreciation |
|
|
28,055 |
|
|
|
36,583 |
|
|
|
24,511 |
|
Gross unrealized depreciation |
|
|
(172,775 |
) |
|
|
(211,015 |
) |
|
|
(166,025 |
) |
Net unrealized investment appreciation (depreciation) on investments |
|
$ |
(144,720 |
) |
|
$ |
(174,432 |
) |
|
$ |
(141,514 |
) |
The difference between GAAP-basis and tax basis unrealized gains (losses) is attributable primarily to wash sales, differences in the tax treatment of underlying fund investments, partnership investments, material modification of debt securities, unrealized appreciation (depreciation) on derivatives and changes in the fair value of the hedged liabilities attributable to the risk being hedged.
In order to present certain components of the Company’s capital accounts on a tax-basis, certain reclassifications have been recorded to the Company’s accounts. These reclassifications have no impact on the net asset value of the Company and result primarily from certain non-deductible expenses, and differences in the tax treatment of underlying fund investments. For the year ended December 31, 2025, the Company reclassified $14,464 from paid-in capital in excess of par to distributable earnings. For the years ended December 31, 2024 and 2023, the Company reclassified $3,470 and $17,127 from total distributable earnings to paid-in capital in excess of par, respectively.
The following reconciles net increase in net assets resulting from operations to taxable income:
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For the Years Ended December 31, |
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|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Net increase in net assets resulting from operations |
|
$ |
119,267 |
|
|
$ |
62,867 |
|
|
$ |
195,874 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|||
Net unrealized loss (gain) on investments and foreign currency forward contracts and translations |
|
|
(60,390 |
) |
|
|
35,762 |
|
|
|
(21,214 |
) |
Income not currently taxable |
|
|
10,358 |
|
|
|
(9,259 |
) |
|
|
(23,098 |
) |
Income for tax but not book |
|
|
82 |
|
|
|
726 |
|
|
|
484 |
|
Expenses not currently deductible |
|
|
4,111 |
|
|
|
5,791 |
|
|
|
5,970 |
|
Expenses for tax but not for book |
|
|
(282 |
) |
|
|
(68 |
) |
|
|
(1,131 |
) |
Realized gain(loss) differences |
|
|
(318,188 |
) |
|
|
(180,396 |
) |
|
|
(79,145 |
) |
Taxable income net of capital loss carryforward |
|
$ |
(245,042 |
) |
|
$ |
(84,577 |
) |
|
$ |
77,740 |
|
Capital loss carryforward |
|
|
418,484 |
|
|
|
327,078 |
|
|
|
150,640 |
|
Taxable income (1) |
|
$ |
173,442 |
|
|
$ |
242,501 |
|
|
$ |
228,380 |
|
ASC Topic 740, “Accounting for Uncertainty in Income Taxes” (“ASC 740”) provides guidance on the accounting for and disclosure of uncertainty in tax position. ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. Based on its analysis of its tax position for all open tax years (the current and prior years, as applicable), the Company has concluded that it does not have any uncertain tax positions that met the recognition or measurement criteria of ASC 740. Such open tax years remain subject to examination and adjustment by tax authorities.
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.