Income Taxes

12 Months Ended

Dec. 31, 2024

Note 9. Income Taxes.

For the period from December 9, 2021 (commencement of operations) to June 5, 2023, the Fund was classified as a partnership for U.S. federal income tax purposes. While the Fund was classified as a partnership no provisions for income taxes were recorded in the consolidated financial statements since the Fund was not subject to income tax. Tax obligations relating to the Fund’s activities were the responsibility of the Unit Holders. Effective June 6, 2023, the Fund elected to be classified as a corporation for U.S. federal income tax purposes and the Fund elected to be treated, and intends to qualify annually as, a regulated investment company (“RIC”) as defined under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).

Taxable income differs from net increase (decrease) in net assets resulting from operations primarily due to: (1) unrealized appreciation (depreciation) on investments, as gains and losses are generally not included in taxable income until they are realized (2) income or loss recognition on exited investments and (3) other non-deductible expenses.

The Fund makes certain adjustments to the classification of net assets as a result of permanent book-to-tax differences, which include differences in the book and tax basis of certain assets and liabilities, and non-deductible expenses, among other items. To the extent these differences are permanent, they are charged or credited to additional paid in capital, undistributed net investment income or undistributed net realized gains on investments, as appropriate.

For the year ended December 31, 2024 and for the period starting June 6, 2023 and ended December 31, 2023, permanent differences were as follows:


	Year Ended December 31,
	2024			2023
Undistributed net investment income (loss)	$	2,485,018		$	39,893
Accumulated net realized gain (loss)		(879,599	)		(141,164	)
Paid In Capital		(1,605,419	)		101,271

During the year ended December 31, 2024, permanent differences were principally related to paydowns, capital loss carried forward, and partnerships, among other items. During the period starting June 6, 2023 and ended December 31, 2023, permanent differences were principally related to income earned by the Fund prior to June 6, 2023, when the fund was classified as a partnership for tax purposes (“Pre-RIC Conversion Income”).

The following reconciles the increase in net assets resulting from operations for the year ended December 31, 2024 and the period starting June 6, 2023 to December 31, 2023, to taxable income for the respective period:


	Year Ended December 31,
	2024			2023
Net increase (decrease) in net assets resulting from operations	$	87,627,465		$	95,279,402
Net unrealized (appreciation) depreciation on investments		14,999,425			(9,489,236	)
Pre-RIC Conversion Income		—			(34,963,890	)
Other permanent and timing differences		2,486,986			—
Realized losses for tax not recognized		521,488			—
Realized gain (loss) for book not included for tax		(610,189	)		—
Other non-deductible expenses and excise tax		—			2,156,246
Taxable/distributable income	$	105,025,175		$	52,982,522

The components of accumulated gains / losses as calculated on a tax basis for the year ended December 31, 2024 and the period starting June 6, 2023 to December 31, 2023 was as follows:


	Year Ended December 31,
	2024			2023
Distributable ordinary income	$	—		$	346,173
Capital loss carried forward		(185,367	)		—
Net unrealized appreciation/(depreciation) on investments		(7,393,077	)		8,211,879
Total accumulated under-distributed (over-distributed) earnings	$	(7,578,444	)	$	8,558,052

Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal year end and is subject to adjustment.


	Year Ended December 31,
	2024			2023
Long-term	$	(185,367	)	$	—
Total capital loss carried forward	$	(185,367	)	$	—

The cost and unrealized gain (loss) of the Fund’s investments, as calculated on a tax basis, at December 31, 2024 and 2023 was as follows:


	Year Ended December 31,
	2024			2023
Gross unrealized appreciation	$	22,901,926		$	22,685,826
Gross unrealized depreciation		(30,294,957	)		(14,473,947	)
Net unrealized appreciation (depreciation) on investments	$	(7,393,031	)	$	8,211,879

Tax cost of investments	$	1,591,274,552		$	1,371,453,021

Of the distributions declared during the year ended December 31, 2024, $105,369,381 was derived from ordinary income as determined on a tax basis. For the applicable year ended December 31, 2024, the Fund's distributions exceeded the aggregate amount of taxable income and net realized gains resulting in a $12,973,482 return of capital for tax purposes. Of the distributions declared during the period starting June 6, 2023 and ended December 31, 2023, $52,636,349 were derived from ordinary income, as determined on a tax basis.

The Fund designates $105,369,381 of distributions paid during the year ended December 31, 2024 as qualifying to be taxed as section 163(j) interest dividends. The fund designates $52,330,671 of distributions paid during the year ended December 31, 2023 as qualifying to be taxed as section 163(j) interest dividends.

The Fund designates $55,096,534 of distributions paid in the year ended December 31, 2023 as qualifying to be taxed as interest-related dividends for nonresident alien shareholders.

Management has analyzed the Fund’s tax positions taken, or to be taken, on U.S. federal income tax returns for all open tax years and has concluded that no provision for income tax is required in the Fund’s consolidated financial statements other than the provision for income taxes recorded on the consolidated financial statements related to the Fund’s investment in wholly-owned subsidiaries. The Fund’s U.S. federal income tax returns are subject to examination by the Internal Revenue Service for a period of three fiscal years after they are filed.

- Definition

The entire disclosure for income tax.

+ References

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+ Details

Fidelity Private Credit Co LLC 10-K