Company: NXDT
Filing Date: 2025-04-25
Form Type: 424B3
Source: 0001437749-25-013177
Chunk: 147

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-04-25
Form: 424B3
Chunk 147
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 to satisfy a REIT asset test, as described below, due to reasonable cause and New NXDT nonetheless maintains its REIT qualification because of specified cure provisions, New NXDT will generally be required to pay an excise tax. In such case, the amount of the excise tax will be at least $50,000 per failure, and, in the case of certain REIT asset test failures, will be determined as the amount of net income generated by the assets in question multiplied by the U.S. federal corporate income tax rate if that amount exceeds $50,000 per failure. |

| ● | If New NXDT fails to satisfy any provision of the Code that would result in New NXDT’s failure to qualify as a REIT (other than a violation of the REIT gross income tests or a violation of the asset tests described below) and the violation is due to reasonable cause, New NXDT may retain its REIT qualification but will be required to pay a penalty of $50,000 for each such failure. |

| ● | New NXDT may be required to pay monetary penalties to the IRS in certain circumstances, including if New NXDT fails to meet recordkeeping requirements intended to monitor New NXDT’s compliance with votes relating to the composition of its stockholders. |

| ● | The earnings of any of our subsidiaries that are C corporations, including any subsidiary we may elect to treat as a TRS, are subject to U.S. federal corporate income tax. |

Requirements for Qualification

Organizational Requirements.The Code defines a REIT as a corporation, trust or association:

| ● | that is managed by one or more trustees or directors; |

| ● | the beneficial ownership of which is evidenced by transferable shares, or by transferable certificates of beneficial interest; |

| ● | that would otherwise be taxable as a domestic corporation, but for its election to be subject to tax as a REIT; |

| ● | that is neither a financial institution nor an insurance company to which certain provisions of the Code apply; |

| ● | except for the first taxable year in which an election is made to treat the corporation, trust or association as a REIT, the beneficial ownership of which is held by 100 or more persons; |

| ● | during the last half of each taxable year (other than the 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 construct