Company: NXDT
Filing Date: 2025-01-30
Form Type: 424B5
Source: 0001437749-25-002263
Chunk: 78

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-01-30
Form: 424B5
Chunk 78
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 for U.S. federal income tax purposes, possibly causing us to fail to qualify for or to maintain REIT status;

● Compliance with REIT requirements, which may limit our ability to hedge our liabilities effectively and cause us to forgo otherwise attractive opportunities, liquidate certain of our investments or incur tax liabilities;

● The risks associated with our ownership of interests in taxable REIT subsidiaries (“TRSs”);

● We may recognize taxable gains from the sale of properties as a result of the inability to complete certain like-kind exchanges in accordance with Section 1031 of the Internal Revenue Code of 1986, as amended (the “Code”);

● The risk that the Internal Revenue Service (the “IRS”) may consider certain sales of properties to be prohibited transactions, resulting in a 100% penalty tax on any taxable gain;

● The risk that we may be subject to other tax liabilities that may reduce our cash flows and distributions on our shares;

● The ineligibility of dividends payable by REITs for the reduced tax rates available for some dividends;

● The risks associated with the share ownership restrictions of the Code for REITs and the share ownership limit imposed by our declaration of trust (the “Declaration”);

● The ability of our board of trustees (the “Board”) to revoke our REIT qualification without shareholder approval;

● There may be legislative or regulatory tax changes or other actions affecting REITs;

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● Foreign investors may be subject to U.S. federal income tax or withholding tax on distributions received from us or on proceeds and the disposition of our shares; and

● Any other risks included under Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K filed with the SEC on March 14, 2024.

We urge you to carefully consider these risks and review the additional disclosures we make concerning risks and other factors that may materially affect the outcome of our forward-looking statements and our future business and operating results, including those made in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, as such risk factors may be amended, supplemented or superseded from time to time by other reports we file with the SEC in the future, including subsequent Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, and in any prospectus supplement or free writing prospectus. We caution you that any forward-looking statements made in this prospectus,