Source Capital Announces Significant Deemed Distribution for 2025, Retaining Capital for Growth

summarizeSummary

Source Capital announced the tax treatment of its 2025 dividends and a significant deemed distribution of $2.51 per share, retaining capital for future growth and investment opportunities.

check_boxKey Events

• Deemed Distribution Announced

  The Fund declared a $2.50739554 per share deemed distribution for shareholders of record as of December 31, 2025.

• Capital Retention for Growth

  The Board of Trustees opted for a deemed distribution to retain capital, enabling the Fund to pursue future investment opportunities and support continued growth.

• Tax Implications for Shareholders

  Shareholders are deemed to have received a capital gain dividend, receive a 21% tax credit, and increase their adjusted tax basis in their shares.

• First Deemed Distribution Since 1989

  This marks the first time the Fund has retained realized gains through a deemed distribution since 1989, indicating a strategic shift.

auto_awesomeAnalysis

This 8-K details the U.S. federal income tax treatment of Source Capital's 2025 dividends and, more significantly, a $2.50739554 per share deemed distribution. The Board of Trustees elected to retain net capital gains, paying a 21% corporate tax, to enable the Fund to pursue future investment opportunities and support continued growth. Shareholders are deemed to have received a capital gain dividend, receive a tax credit, and increase their adjusted tax basis in their shares. This marks a notable shift in capital allocation strategy, as the Fund has not retained realized gains in this manner since 1989.