Tax Information

Tax Distributions Information

Title View
Letter to the Stockholders on Tax Status of 2016 Distributions
PDF
Add to Briefcase
Letter to the Stockholders on Tax Status of 2015 Distributions
PDF
Add to Briefcase
Letter to the Stockholders on Tax Status of 2014 Distributions
PDF
Add to Briefcase
Letter to the Stockholders on Tax Status of 2013 Distributions
PDF
Add to Briefcase
Letter to the Stockholders on Tax Status of 2012 Distributions
PDF
Add to Briefcase
Letter to Stockholders on the Tax Status of 2011 Distributions
PDF
Add to Briefcase
Letter to Stockholders on the Tax Status of 2010 Distributions
PDF
Add to Briefcase

Click the link to the right to download: Adobe Acrobat

Tax Reporting Information

In addition to the letter to stockholders on the tax status of distributions below, details are provided regarding Hercules' year-end dividend distributions, and there is a brief description of the various types of taxable income, dividends/distributions, and non-taxable return of capital distributions. These may result and will be reported as such to US individual taxpayers on Form 1099 DIV in March of the calendar year following the year of distribution. For tax purposes, Hercules is a regulated investment company ("RIC") and is designating the types of distributions you receive as a stockholder in accordance with Subchapter M of the Internal Revenue Code of 1986, as amended ("IRC"), in the following manner:

Ordinary Income:
This type of income arises from the receipt of interest income on debt securities held by Hercules less expenses. Hercules is considered to be a "pass-through entity" from a tax perspective, which means that this type of income is the same as if the interest income was received directly from the borrower. This type of income is reported in Box 1a of Form 1099.

Dividends:
This type of income arises from the receipt of dividend income on stock held by Hercules. As with interest income, it is treated as if the individual taxpayer held the stock directly. This income is considered as "qualified" for the reduced maximum tax rate (20% maximum rate) on dividends in the United States. This type of income is reported in Box 1b of Form 1099.

Hercules pays its dividend annually in arrears. Dividends are paid out of the assets legally available for distribution. Dividends, if any, are determined by the Hercules board of directors.

The following is a table representing dividends and distributions paid by Hercules Capital:

Year Amount
Per Share
Taxable
Percentage
Qualified
Dividend
Percentage
Non-Qualified
Dividend
Percentage
Return of
Capital
Percentage
Capital
Gains
2006 $1.20 88.51% 0.00% 88.51% 11.49% 0.00%
2007 $1.20 100.00% 0.00% 100.00% 0.00% 0.00%
2008 $1.32 100.00% 0.00% 94.22% 0.00% 5.78%
2009 $1.26 100.00% 0.00% 100.00% 0.00% 0.00%
2010 $0.80 100.00% 0.00% 100.00% 0.00% 0.00%
2011 $0.88 100.00% 0.00% 100.00% 0.00% 0.00%
2012 $0.95 100.00% 0.00% 100.00% 0.00% 0.00%
2013 $1.11 100.00% 0.00% 100.00% 0.00% 0.00%
2014 $1.24 100.00% 0.00% 100.00% 0.00% 0.00%
2015 $1.24 100.00% 0.00% 82.50% 0.00% 17.50%

In addition, although we currently intend to distribute realized net capital gains (i.e., net long-term capital gains in excess of short-term capital losses), if any, at least annually, out of the assets legally available for such distributions, we may decide in the future to retain such capital gains for investment.

Short Term Capital Gains:
This type of income arises from the sale of a security held for less than one year. This income is the same as if the tax payer sold a security directly owned. This type of income is considered ordinary income and is reported in Box 1a of Form 1099.

Long Term Capital Gains:
This type of income arises from the sale of a security held for over one year. This income is the same as if the tax payer sold a security directly owned. This type of income is considered a capital gain income and is reported in Box 2a of Form 1099.

Return of Capital:
Sometimes due to tax timing differences or other circumstances, Hercules may make a distribution that is not sourced from taxable income but represents a return of your investment or capital. There is no tax liability resulting from a return of capital. This type of distribution is reported in Box 3 of Form 1099.

This tax information is not intended to constitute tax, legal, investment, or other professional advice. This is general information and should not be relied upon for tax purposes. Shareholders should consult their tax advisor for tax guidance pertinent to specific facts and circumstances.

If you have questions about the tax status of your distributions, please contact the American Transfer & Trust Company at (718) 921-8200. You may also contact Hercules Capital's Investor Relations Department directly at (650) 289-3060.