Capital Southwest announces 2024 dividend tax treatment, with all $2.53 per share categorized as ordinary income.
Quiver AI Summary
Capital Southwest Corporation has announced the U.S. federal income tax treatment of its 2024 dividends, which totaled $2.53 per share, all classified as ordinary income, including net short-term capital gains. The company reported that 92.89% of these dividends would be exempt from U.S. withholding tax for non-U.S. shareholders, as they fall under the categories of "interest-related" and "short-term capital gains." Detailed information about the tax characteristics of these dividends can be found on the company's website. Capital Southwest, based in Dallas, is a business development company with a focus on providing flexible financing solutions to middle market businesses.
Potential Positives
- Capital Southwest Corporation declared a total dividend of $2.53 per share for 2024, signaling strong returns for shareholders.
- 100% of the dividends are classified as ordinary income, including net short-term capital gains, which may be attractive for investors seeking income-generating investments.
- Approximately 92.89% of the dividends are designated as interest-related and short-term capital gains, making them exempt from U.S. withholding tax for Non-U.S. Shareholders, potentially attracting foreign investment.
- The company’s continued focus on middle market businesses and its substantial investment portfolio of approximately $1.5 billion enhance its reputation and capacity for growth in the business development sector.
Potential Negatives
- Capital Southwest's dividends for 2024 consist entirely of ordinary income and net short-term capital gains, which may be less attractive to investors seeking qualified dividends or long-term capital gains.
- The high percentage (92.89%) of dividends classified as interest-related and short-term capital gains indicates a potential lack of long-term financial stability and may raise concerns among investors about the company's overall financial health.
- Non-U.S. shareholders may experience dividend withholdings for U.S. federal income tax, which could deter foreign investment in the company.
FAQ
What is the federal tax treatment of Capital Southwest's 2024 dividends?
For 2024, 100% of the dividends are classified as ordinary income, including net short-term capital gains.
How much did Capital Southwest pay in dividends for 2024?
Capital Southwest paid a total of $2.53 per share in dividends for the tax year ended December 31, 2024.
Are Capital Southwest's dividends subject to U.S. withholding tax for Non-U.S. Shareholders?
Approximately 92.89% of the dividends for Non-U.S. Shareholders are exempt from U.S. withholding tax.
Where can I find detailed tax information on Capital Southwest's dividends?
Detailed tax information regarding the 2024 dividends is available on Capital Southwest's website at http://www.capitalsouthwest.com/tax-information.
Who should Non-U.S. Shareholders contact for tax-related questions?
Non-U.S. Shareholders should consult their tax advisor for questions regarding U.S. federal tax implications.
Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.
$CSWC Insider Trading Activity
$CSWC insiders have traded $CSWC stock on the open market 5 times in the past 6 months. Of those trades, 5 have been purchases and 0 have been sales.
Here’s a breakdown of recent trading of $CSWC stock by insiders over the last 6 months:
- RAMONA LYNN ROGERS-WINDSOR has made 3 purchases buying 1,000 shares for an estimated $23,458 and 0 sales.
- CHRISTINE BATTIST has made 2 purchases buying 662 shares for an estimated $15,641 and 0 sales.
To track insider transactions, check out Quiver Quantitative's insider trading dashboard.
$CSWC Hedge Fund Activity
We have seen 72 institutional investors add shares of $CSWC stock to their portfolio, and 64 decrease their positions in their most recent quarter.
Here are some of the largest recent moves:
- SANDERS MORRIS HARRIS LLC added 178,420 shares (+28.0%) to their portfolio in Q4 2024, for an estimated $3,893,124
- DENALI ADVISORS LLC added 124,653 shares (+inf%) to their portfolio in Q3 2024, for an estimated $3,152,474
- TWO SIGMA INVESTMENTS, LP removed 87,960 shares (-15.7%) from their portfolio in Q3 2024, for an estimated $2,224,508
- TWO SIGMA ADVISERS, LP removed 87,700 shares (-11.7%) from their portfolio in Q3 2024, for an estimated $2,217,933
- HUDSON BAY CAPITAL MANAGEMENT LP removed 75,215 shares (-100.0%) from their portfolio in Q3 2024, for an estimated $1,902,187
- BENJAMIN EDWARDS INC added 72,710 shares (+970.6%) to their portfolio in Q3 2024, for an estimated $1,838,835
- HRT FINANCIAL LP added 71,786 shares (+inf%) to their portfolio in Q3 2024, for an estimated $1,815,467
To track hedge funds' stock portfolios, check out Quiver Quantitative's institutional holdings dashboard.
Full Release
DALLAS, Jan. 31, 2025 (GLOBE NEWSWIRE) -- Capital Southwest Corporation (“Capital Southwest” or the “Company”) (Nasdaq: CSWC), an internally managed business development company focused on providing flexible financing solutions to support the acquisition and growth of middle market businesses, announced today the U.S. federal income tax treatment of its 2024 dividends.
U.S. Federal Income Tax Treatment of 2024 Dividends
Capital Southwest paid dividends totaling $2.53 per share that are attributable to the tax year ended December 31, 2024, with 100.00% of those dividends comprised of ordinary income, including net short-term capital gains. The Company has posted information regarding the U.S. federal income tax characteristics of its dividends that are attributable to 2024 on its website (http://www.capitalsouthwest.com/tax-information).
The amounts shown in the table below represent the final classification of the Company’s 2024 dividends. This information supersedes any estimated information you may have received during the year. Calendar-year 2024 dividends are classified as follows:
| Form 1099-DIV Reporting | Box 1a | Box 1a and Box 1b | Box 2a | Non-U.S. Shareholder | Non-U.S. Shareholder | ||||||||||||
| Record Date | Payment Date | Distribution per Share | Ordinary Dividend Per Share (i) | Qualified Dividends Per Share (i), (ii) | Long-Term Capital Gain Per Share (iii) | % of Interest-Related and Short-Term Capital Gain (iv) | % of Distributions Exempt from U.S. Withholding Tax (v) | ||||||||||
| 03/15/24 | 03/29/24 | $ | 0.6300 | $ | 0.6300 | $ | - | $ | - | 92.89 | % | 92.89 | % | ||||
| 06/14/24 | 03/28/24 | $ | 0.6300 | $ | 0.6300 | $ | - | $ | - | 92.89 | % | 92.89 | % | ||||
| 09/13/24 | 09/30/24 | $ | 0.6400 | $ | 0.6400 | $ | - | $ | - | 92.89 | % | 92.89 | % | ||||
| 12/13/24 | 12/31/24 | $ | 0.6300 | $ | 0.6300 | $ | - | $ | - | 92.89 | % | 92.89 | % | ||||
| $ | 2.5300 | $ | 2.5300 | $ | - | $ | - | ||||||||||
| % of Total Dividend | |||||||||||||||||
| Paid Per Share | 100.00 | % | 100.00 | % | 0.00 | % | 0.00 | % | 92.89 | % | 92.89 | % | |||||
(i) Form 1099-DIV Box 1a includes the combined amounts of the columns "Ordinary Dividend Per Share" and "Qualified Dividends Per Share," contained within table above.
(ii) The portion of the dividend reported in Box 1a treated as Qualified Dividend is reported on Form 1099-DIV in Box 1b.
(iii) Net Capital Gain Dividend is reported on Form 1099-DIV in Box 2a.
(iv) The Company designates the above percentages of each of the total dividends by payment date as Interest-Related Dividend and Short-Term Capital Gain Dividend in accordance with Sections 871(k) and 881(e) under the Internal Revenue Code (the "Code").
(v) The percentages designate the portion of Capital Southwest's dividends received by Non-U.S. Residents and Foreign Corporation Shareholders that constitute Interest-Related Dividends, Short-Term Capital Gains Dividends, and Net Capital Gain Dividends to total amount of the dividends derived which generally are exempt from U.S. withholding tax for these periods for Non-U.S. Residents and Foreign Corporation Shareholders.
Non-U.S. residents and foreign corporation shareholders ("Non-U.S. Shareholders") in a regulated investment company ("RIC"), such as Capital Southwest, are exempt from U.S. withholding tax on both "interest-related" dividends and short-term capital gains in accordance with Sections 871(k) and 881(e) of the Code. In addition, Non-U.S. Shareholders in a RIC are also exempt from U.S. withholding tax on long-term capital gains. Approximately 92.89% of Capital Southwest’s 2024 dividends relate to interest and short-term capital gains. See the "Tax Treatment of 2024 Dividends for Non-U.S. Shareholders" posted on the Company's website for more details (http://www.capitalsouthwest.com/tax-information).
Dividends distributed to Non-U.S. Shareholders may have been withheld to pay U.S. federal income tax. Non-U.S. Shareholders should contact their tax advisor with any questions regarding this information, and its application to any claim for refund of taxes paid to the U.S. Internal Revenue Service.
About Capital Southwest
Capital Southwest Corporation (Nasdaq: CSWC) is a Dallas, Texas-based, internally managed business development company with approximately $1.5 billion in investments at fair value as of September 30, 2024. Capital Southwest is a middle market lending firm focused on supporting the acquisition and growth of middle market businesses with $5 million to $50 million investments across the capital structure, including first lien, second lien, and non-control equity co-investments. As a public company with a permanent capital base, Capital Southwest has the flexibility to be creative in its financing solutions and to invest to support the growth of its portfolio companies over long periods of time.
Investor Relations Contact:
Michael S. Sarner, Chief Financial Officer
214-884-3829
