Company: NXDT
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001356115-25-000003
Chunk: 15

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-03-31
Form: 10-K
Item: Item 5
Chunk 15
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 liable to pay Canadian income taxes.Deferred Tax AssetsAs of December 31, 2024, significant components of the net deferred tax assets (“DTA”) of the Company’s TRSs were as follows (in thousands): Deferred Tax Asset as of December 31, 2024Deferred Tax Asset as of December 31, 2023Capital loss carryover from prior year$137 $137 Capital loss carryover to be utilized in current year— — Net operating loss carryover from prior year298 442 Net operating loss carryover to be utilized in current year(145)(138)Unrealized tax loss on investments21,503 19,384 Total deferred tax assets$21,793 $19,825 Valuation allowance(17,022)(14,896)Deferred tax liability(2,153)(2,033)Net deferred tax asset$2,618 $2,896 The Company may not offset tax assets or liabilities from one TRS with those of another TRS. NHF TRS, LLC, one of the Company's TRSs, is estimated to generate a net taxable capital loss of $7.9 million for the year ended December 31, 2024 and generated a net taxable capital gain of $10.9 million for the year ended December 31, 2023. The Company believes it is more likely than not that it will be able to harvest capital losses within this TRS during the three succeeding taxable years to be eligible for a capital loss carryback refund claim and has therefore not applied a valuation allowance to the extent of the expected future refund claim. As such, the Company has recorded a valuation allowance of $10.5 million and $14.9 million as of December 31, 2024 and 2023, respectively, against the Company’s gross deferred tax assets to arrive at a net DTA of $4.5 million and $4.5 million as of December 31, 2024 and 2023, respectively, to reflect the expected tax benefit associated with the unrealized tax losses at this TRS. NREO TRS, LLC ("NREO TRS") has an estimated net operating loss balance of $0.7 million as of December 31, 2024 that does not have an expiration date as well as an estimated $0.7 million capital loss balance as of December 31, 2024 that will expire if