Company: CLM
Filing Date: 2025-04-08
Form Type: N-2/A
Source: 0001398344-25-006812
Chunk: 65

Company: Cornerstone Strategic Investment Fund, Inc.
Filing Date: 2025-04-08
Form: N-2/A
Chunk 65
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 least
annually by the Fund’s Board and can be modified at the Board’s discretion. To the extent that distributions exceed the current
Net Earnings of the Fund, the balance of the amounts paid out will be generated from sales of portfolio securities held by the Fund and
will be distributed either as short-term or long-term capital gains or a tax-free return-of- capital. Although return of capital distributions
may not be taxable, such distributions may reduce a Stockholder’s cost basis in his or her Shares, and therefore may result in
an increase in the amount of any taxable gain on a subsequent disposition of such Shares, even if such Shares are sold at a loss to the
Stockholder’s original investment amount. To the extent these distributions are not represented by net investment income and capital
gains, they will not represent yield or investment return on the Fund’s investment portfolio. As shown on page 35 in the
table which identifies the constituent components of the Fund’s distributions under its Managed Distribution Policy for years 2020-2024,
a majority of the distributions that the Fund made to its Stockholders for 2020, 2021, 2023 and 2024 consisted of a return of its Stockholders’
capital, and not of income or gains generated from the Fund’s investment portfolio, and substantially all of the distributions
that the Fund made to its Stockholders for 2022 consisted of a return of its Stockholders’ capital, and not of income or gains
generated from the Fund’s investment portfolio. A return-of-capital distribution reduces the tax basis (but not below zero) of
an investor’s shares in the Fund. The Fund plans to maintain the Distribution Policy even if a return-of-capital distribution would
exceed an investor’s tax basis and therefore be a taxable distribution. The Board currently plans to maintain this Distribution
Policy even if regulatory requirements would make part of a return-of-capital, necessary to maintain the distribution, taxable to Stockholders
and to disclose that portion of the distribution that is classified as ordinary income. Although it has no current intention to do so,
the Board may terminate the Distribution Policy at any time and such termination may have an adverse effect on the market price for the
Fund’s Shares.

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What are the benefits of the Distribution Policy?

The Distribution Policy historically has maintained
a stable, high rate of distribution. The Board remains convinced that the Fund’s Stockholders are well served by a policy of regular
distributions which increase liquidity and provide flexibility