Annual report [Section 13 and 15(d), not S-K Item 405]

DIVIDENDS, DISTRIBUTIONS AND TAXABLE INCOME (Tables)

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DIVIDENDS, DISTRIBUTIONS AND TAXABLE INCOME (Tables)
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Schedule of Investment Company, Distribution To Shareholders
The tax character of distributions paid for the years ended December 31, 2024, 2023 and 2022 was as follows:
Year Ended December 31,
2024
2023
2022
(dollars in thousands)
Ordinary income $ 37,924  $ 47,756  $ 61,854 
Qualified dividends 6,173  8,301  1,727 
Distributions of long-term capital gains 14,114  —  — 
Distributions on tax basis $ 58,211  $ 56,057  $ 63,581 
Schedule of Distributable Earnings on Tax Basis
As of December 31, 2024, 2023 and 2022, the components of distributable earnings on a tax basis, or “Undistributed ordinary income,” differ from the amount of “Total overdistributed earnings” reflected in the Consolidated Balance Sheets by temporary book or tax differences as shown in the table below.
Year Ended December 31,
2024 2023 2022
(dollars in thousands)
Undistributed ordinary income (1) $ 20,348  $ 14,745  $ 20,674 
Unrealized appreciation (depreciation), net of tax 25,223  42,341  (482)
Cumulative book/ tax differences on realized gain/ loss, including capital loss carryforward (38,572) (43,438) (20,346)
Accumulated net impact of Taxable Subsidiaries (2) (67,544) (75,468) (71,474)
Other temporary differences (3) (4,172) (2,089) (2,952)
Components of Total overdistributed earnings
 $ (64,717) $ (63,909) $ (74,580)
_____________________________
(1)Undistributed ordinary income is comprised of the following:
Year Ended December 31,
2024 2023 2022
(dollars in thousands)
Taxable income earned prior to period end and carried forward for distribution next period $ 34,835  $ 28,764  $ 33,491 
Dividend payable as of period end and paid in the following period (14,487) (14,019) (12,817)
Undistributed ordinary income $ 20,348  $ 14,745  $ 20,674 
(2)Accumulated net impact of earnings, intercompany dividends and book/tax differences of the Taxable Subsidiaries

(3)Book income and tax income differences, including dividends, debt origination, structuring fees and changes in estimates
Schedule of Taxable Income and to Total Distributions Declared to Common Stock Reconciliation
Listed below is a reconciliation of “Net increase in net assets resulting from operations” to taxable income and to total distributions declared to common stockholders for the years ended December 31, 2024, 2023 and 2022.
Year Ended December 31,
2024 2023 2022
(estimated, dollars in thousands)
Net increase in net assets resulting from operations $ 56,553  $ 66,209  $ 45,588 
Net unrealized (appreciation) depreciation 15,439  (46,319) 1,702 
Income tax provision 1,106  3,769  1,643 
Pre-tax book (income) loss not consolidated for tax purposes (9,622) 4,241  (9,748)
Book income and tax income differences, including debt origination, structuring fees, dividends, realized gains and changes in estimates 339  22,228  9,820 
Estimated taxable income (1) 63,815  50,128  49,005 
Taxable income earned in prior year and carried forward for distribution in current year 14,745  20,674  23,276 
Taxable income earned prior to period end and carried forward for distribution next period (34,835) (28,764) (33,491)
Dividend payable as of period end and paid in the following period 14,487  14,019  12,817 
Total distributions accrued or paid to common stockholders $ 58,212  $ 56,057  $ 51,607 
_____________________________
(1)MSIF’s taxable income for each period is an estimate and will not be finally determined until MSIF files its tax return for each year. Therefore, the final taxable income, and the taxable income earned in each period and carried forward for distribution in the following period, may be different than this estimate.
Schedule of Provision for Income Taxes MSC Income’s provision for income taxes was comprised of the following for the years ended December 31, 2024, 2023 and 2022:
Year Ended December 31,
2024 2023 2022
(dollars in thousands)
Current tax expense:
Federal $ 3,543  $ 13  $ 33 
State 595  340  495 
Excise 851  519  753 
Total current tax expense 4,989  872  1,281 
Deferred tax expense (benefit):
Federal (3,068) 3,450  351 
State (815) (553) 11 
Total deferred tax expense (benefit) (3,883) 2,897  362 
Total income tax provision $ 1,106  $ 3,769  $ 1,643 
Schedule of Deferred Tax Assets and Liabilities
The following table sets forth the significant components of net deferred tax assets and liabilities as of December 31, 2024 and 2023:
Year Ended
December 31,
2024 2023
(dollars in thousands)
Deferred tax assets:
Net operating loss carryforwards $ 32  $ 671 
Interest expense carryforwards 4,514  3,258 
General business and foreign tax credit carryforwards 9  329 
Capital loss carryforwards 5,499  6,041 
Total deferred tax assets 10,054  10,299 
Deferred tax liabilities:
Net basis differences in portfolio investments 4,324  (1,484)
Net unrealized appreciation of portfolio investments (13,753) (12,074)
Total deferred tax liabilities (9,429) (13,558)
Total deferred tax assets (liabilities), net $ 625  $ (3,259)