In case it helps, for 2010 on my tax return it seems about 75% of the CODI distribution was taxable. About 45% of the distribution was interest income and a little less than 30% was treated as a dividend (all of this dividend was treated as a qualified dividend).
Also, there was investment interest expense that might be deductible per IRS Form 4952.
Incidentally, at CODI's current price levels I've been a buyer too as the Q2 report and conference call seemed OK--time will tell whether we're missing something.
No, the distribution appears to be entirely taxable with part of it labeled qualified dividends.
For the 2010 tax year, the K-1 indicates about 1/4 taxable as ordinary dividends, 1/4 taxable as qualified dividends and 1/2 taxable as interest income. Note that I hold this in a IRA deferred tax account so did not run the numbers through my turbo tax. I might add that so far this has been an excellent holding for me in an IRA. There was no unrelated business taxable income in 2010. I don't recall any in the past.