Capital Southwest Announces U.S. Federal Income Tax Treatment of 2024 Dividends

Rhea-AI Summary

Capital Southwest (Nasdaq: CSWC) has disclosed the U.S. federal income tax treatment of its 2024 dividends. The company paid total dividends of $2.53 per share for the tax year ended December 31, 2024. The dividends were comprised of 100% ordinary income, including net short-term capital gains.

The quarterly dividend payments were distributed as follows:

• March 29, 2024: $0.63 per share
• June 28, 2024: $0.63 per share
• September 30, 2024: $0.64 per share
• December 31, 2024: $0.63 per share

Notably, 92.89% of the dividends qualify as Interest-Related and Short-Term Capital Gain dividends, which are generally exempt from U.S. withholding tax for Non-U.S. Residents and Foreign Shareholders.

Positive

• Maintained consistent quarterly dividend payments throughout 2024
• 92.89% of dividends are tax-exempt for non-U.S. shareholders
• Total annual dividend of $2.53 per share distributed to shareholders

Negative

• None.

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

FAQ

What is the total dividend amount paid by CSWC for 2024?

Capital Southwest (CSWC) paid total dividends of $2.53 per share for the tax year 2024.

How are CSWC's 2024 dividends classified for tax purposes?

100% of CSWC's 2024 dividends are classified as ordinary income, including net short-term capital gains.

What percentage of CSWC's 2024 dividends are tax-exempt for non-U.S. shareholders?

92.89% of CSWC's 2024 dividends are exempt from U.S. withholding tax for non-U.S. shareholders.

What were CSWC's quarterly dividend payment dates and amounts in 2024?

CSWC paid $0.63 on March 29, $0.63 on June 28, $0.64 on September 30, and $0.63 on December 31, 2024.

Are there any qualified dividends in CSWC's 2024 distributions?

No, CSWC's 2024 dividends did not include any qualified dividends or long-term capital gains.