Company: NXDT
Filing Date: 2025-08-22
Form Type: S-3
Source: 0001437749-25-027604
Chunk: 20

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-08-22
Form: S-3
Chunk 20
---
 are subject to U.S. federal corporate income tax. |

In addition, we and our subsidiaries may be subject to a variety of taxes, including payroll taxes and state and local and foreign income, property and other taxes on our assets and operations. We could also be subject to tax in situations and on transactions not presently contemplated.

| ■ | Requirements for Qualification-General |

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

| (1) | that is managed by one or more trustees or directors; |

| (2) | the beneficial ownership of which is evidenced by transferable shares, or by transferable certificates of beneficial interest; |

| (3) | that would be taxable as a domestic corporation but for its election to be subject to tax as a REIT; |

| (4) | that is neither a financial institution nor an insurance company subject to specific provisions of the Code; |

| (5) | the beneficial ownership of which is held by 100 or more persons; |

<div align='center'>14</div>

| (6) | in which, during the last half of each taxable year, not more than 50% in value of the outstanding shares is owned, directly or indirectly, by five or fewer “individuals” (as defined in the Code to include specified tax-exempt entities); |

| (7) | that elects to be taxed as a REIT, or has made such election for a previous taxable year, and satisfies all relevant filing and other administrative requirements that must be met to elect and maintain REIT qualification; and |

| (8) | that meets other tests described below, including with respect to the nature of its income and assets. |

The Code provides that conditions (1) through (4), (7) and (8) must be met during the entire taxable year, and that condition (5) must be met during at least 335 days of a taxable year of 12 months, or during a proportionate part of a shorter taxable year. Conditions (5) and (6) have applied to us beginning with our 2021 taxable year.

We believe that we will meet condition (5) and that our shares will be owned with sufficient diversity of ownership to satisfy condition (6). In addition, our Declaration contains restrictions on the ownership and transfer of our shares that are intended to assist us in continuing to satisfy these requirements; however, they may not ensure that we will, in all cases, be able to satisfy these requirements.

To monitor compliance