Jesse Coury: Hello, Ron. Yes. So just as a reminder, GHI is a partnership for tax purposes. So the income and expenses and the net income that we generate as a partnership is allocated to unit holders based on the percentage ownership each unit holder has. Distributions are something separate. That is cash that we have declared and determined that we can distribute to unit holders. And we also have done distributions in the form of additional units throughout the year as a way to return additional value to the unit holders. So I believe the real question is what is the income split between tax-exempt and taxable income. And that we won’t know for certain until after the closing of our fiscal year and issuance of our K-1s, which should be in early to mid-March of 2024.
The mix between tax-exempt and taxable income depends on a variety of factors throughout the year, particularly the level of taxable transactions and the size of our tax-exempt net spread portfolio. In order to give unitholders an ability to estimate where that will come out, we do provide in our supplemental report that’s available on a separate page on our Investor Relations website, a breakdown of tax exempt and taxable income for tax years 2020 through 2022 that will give unit holders the ability to see based on the level of taxable transactions that we had in those given years, what the split was. Working off of memory, but I believe the 2022 split was roughly 25% tax exempt and 75% taxable. I would note that there were significant gains on sales from JV Equity Investments in 2022 that drove up the taxable income portion.
But you can compare the taxable income from those JV Equity Investments in 2022 to our year-to-date and expected JV activity in 2023 to ballpark where that split may come in at. And then regarding 2024, similar response. It will be a variety of factors. We don’t know what exits will be on taxable transactions, whether they will occur at all or at what levels gains or losses will be generated from those transactions. So I really can’t give too much projections other than say, make your estimates based on where our portfolio sits on, on exits and look to historical results to try to estimate as best you can, what the tax exempt and taxable breakout will be.
Ron Lane: We have 573 members. I would have met probably half of them over the years because we’ve had the annual conventions pretty much every year until the last few years. The average retail investor, a lot of them have advisers. I would say most of them probably 2/3, 3/4 of them are doing it themselves. And I understand what you’re saying, but they’re not following GHI the way I am or certainly you folks are. And I think it’s still a fair question to ask, could — want to know whether they put it in IRA, which is where it belongs, if it’s mostly taxable, or in a taxable account, if it is mostly tax-free. And I knew where 2022 was, and I get the feeling that it’s getting a little bit — I told them a very uneducated guesstimate is I thought it may be a little more tax-free for 2023.
But you certainly have a better handle on that than I would. I’m not going to send you a note at the end of the year when all the numbers are out and say you’re wrong. Again, it’s a best estimate and a best guesstimate. And that’s I’m asking if you have any kind of handle at all on where it is because, again, the major reason, including for us, is could it be taxable or an IRA? Or should it be a little bit niche or wherever? I think it’s a fair question. We ask that whenever we buy anything.
Jesse Coury: And Ron, all I can say is we’ve tried to provide the information we can to be able to let unit holders make that best estimate in regards to investors holding it in an IRA or some other tax-deferred account. That’s going to depend on individual investors, tax circumstances, and other investments that we are not privy to. And we cannot give any sort of tax advice as to where or how to hold our investment in box other than factually state how the income flows from our fund to our unitholders on the schedule K-1. But if you have any further specific questions, feel free to call me directly. I believe you have my number, and we can talk through that.
Ron Lane: Do you have 2022 handy by any chance, I can get it. Do you have with you 2022? I had that at one time, but I don’t have it handy.
Jesse Coury: I can look it up and confirm with you, Ron, offline, but I believe it was 25% tax exempt, 75% tax.
Ron Lane: –Okay. Yes, you said that. Right. I apologize — about 25 — all right, Jesse. Keep up the good work. Thank you
Jesse Coury: Thank you Ron.
Operator: Thank you. There are no further questions at this time. I’ll hand the floor back to Ken Rogozinski for closing comments.
Kenneth Rogozinski: Thank you very much for joining us today. We look forward to speaking with everyone again next quarter. Thank you. Goodbye.
Operator: This concludes today’s conference. All parties may disconnect. Have a good day.
