Company: NXDT
Filing Date: 2025-04-11
Form Type: S-4
Source: 0001437749-25-011826
Chunk: 153

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-04-11
Form: S-4
Chunk 153
---
 first taxable year in which an election is made to treat the corporation, trust or association as a REIT), not more than 50% in value of the outstanding stock of which is owned, directly or constructively, by five or fewer individuals, as defined in the Code to include certain entities (the “not closely held requirement”); |

| ● | that makes an election to be taxable as a REIT for the current taxable year, or has made this election for a previous taxable year, which election has not been revoked or terminated, and satisfies all relevant filing and other administrative requirements established by the IRS that must be met to maintain qualification as a REIT; |

| ● | that meets other tests described below, including with respect to the nature of its income and assets; and |

| ● | that uses a calendar year for U.S. federal income tax purposes. |

<div align='center'>110</div>

The Code provides that the conditions described in the first through fourth and seventh and eighth such bullet points above must be met during the entire taxable year and that the condition described in the fifth bullet point above must be met (other than the first taxable year in which an election is made to treat the corporation, trust or association) during at least 335 days of a taxable year of 12 months, or during a proportionate part of a taxable year of less than 12 months. Conditions (5) and (6) have applied to Old NXDT beginning with its 2021 taxable year.

New NXDT expects to satisfy the conditions described in the first through sixth bullet points of the second preceding paragraph for the taxable year in which the Conversion takes place and subsequent taxable years. In addition, the New NXDT Charter will provide for restrictions regarding the ownership and transfer of the shares of New Stock. These restrictions are intended to, among other things, assist New NXDT in satisfying the share ownership requirements described in the fifth and sixth bullet points of the preceding paragraph. The ownership and transfer restrictions pertaining to the shares of New Stock are described in this proxy statement/prospectus under the heading “Description of New NXDT Stock–Restrictions on Ownership and Transfer.”

Old NXDT made its election to be taxable as a REIT commencing with its taxable year ended December 31, 2021 and that election has not been revoked or terminated. New NXDT will succeed to Old NXDT’s REIT election at the effective time of the Conversion. Old NXDT and New NXDT have adopted December 31 as their year-end,