Company: NXDT
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001628280-25-052132
Chunk: 170

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-11-13
Form: 10-Q
Item: Item 8
Chunk 170
---
 evaluates them using a two-step process. First, the Company determines whether a tax position is more-likely-than-not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Second, the Company will determine the amount of benefit to recognize and record the amount that is more likely than not to be realized upon ultimate settlement.

12

The Company had no material unrecognized tax benefit or expense, accrued interest or penalties as of September 30, 2025 and 2024. The Company and its subsidiaries are subject to federal income tax as well as income tax of various state and local jurisdictions. The 2024, 2023, 2022 and 2021 tax years remain open to examination by tax jurisdictions to which the Company and its subsidiaries are subject. When applicable, the Company recognizes interest and/or penalties related to uncertain tax positions on its Consolidated Statements of Operations and Comprehensive Income (Loss). The Company has not recorded any uncertain tax positions for the nine months ended September 30, 2025 and 2024.A reconciliation of the statutory income tax provisions to the effective income tax provisions for the periods indicated is as follows (in thousands):For the Three Months Ended September 30,For the Nine Months Ended September 30,2025202420252024Expected tax at statutory rate$(2,796)21.0 %$(3,091)21.0 %$(19,306)21.0 %$(9,647)21.0 %Non-taxable REIT income2,222 -16.7 %4,776 -32.4 %25,472 -27.7 %16,047 -34.9 %Change in valuation allowance(422)3.2 %(985)6.7 %(6,589)7.2 %(4,847)10.6 %Total provision$(995)7.5 %$700 -4.8 %$(423)0.5 %$1,553 -3.4 %II.Canadian mutual fund statusThrough April 17, 2025, NHT was a mutual fund trust pursuant to the Income Tax Act (Canada) (the “Tax Act”). Under the-then current tax legislation, a mutual fund trust that was not a specified investment flow-through trust (“SIFT”) pursuant to the Tax Act generally was entitled to deduct distributions of taxable income such that