Company: SWZ
Filing Date: 2025-10-23
Form Type: N-2/A
Source: 0001999371-25-015937
Chunk: 16

Company: Total Return Securities Fund
Filing Date: 2025-10-23
Form: N-2/A
Chunk 16
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 a Record Date Shareholder receives is 15% or more of the fair market value of their existing Shares on the date the Record Date Shareholder receives the Rights, then the Record Date Shareholder must allocate its tax basis in its existing Shares between those Shares and the Rights the Record Date Shareholder receives in proportion to their fair market values determined on the date the Record Date Shareholder receives the Rights. Please refer to the discussion below regarding the U.S. tax treatment of a Record Date Shareholder that, at the time of the receipt of the Rights, no longer holds the Shares with respect to which the Rights were distributed.

The fair market value of the Rights on the date that the Rights are distributed is uncertain, and we have not obtained, and do not intend to obtain, an appraisal of the fair market value of the Rights on that date. In determining the fair market value of the Rights, Record Date Shareholders should consider all relevant facts and circumstances, including any difference between the Subscription Price of the Rights and the trading price of the Shares on the date that the Rights are distributed, the fair market value of the Shares, the length of the period during which the Rights may be exercised and the fact that the Rights are non-transferable.

Exercise of the Rights. Generally, a Record Date Shareholder will not recognize gain or loss upon the exercise of a Right in the Offering. A Record Date Shareholder’s adjusted tax basis in the Shares acquired upon exercise of a Right will equal the sum of the Subscription Price and its basis, if any, in the Right. The holding period of the Shares acquired upon exercise of a Right will begin on the date of exercise.

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If, at the time of the receipt or exercise of the Rights, the Record Date Shareholder no longer holds the Shares with respect to which the Rights were distributed, then certain aspects of the tax treatment of the receipt and exercise of the Rights are unclear, including (1) the allocation of the tax basis between the Shares previously sold and the Rights, (2) the impact of such allocation on the amount and timing of gain or loss recognized with respect to the Shares previously sold and (3) the impact of such allocation on the tax basis of the Shares acquired upon exercise of the Rights. If a Record Date Shareholder exercises a Right received in the Offering after disposing of the Shares with respect to which the Rights are received, the Record Date Shareholder should consult its tax advisor.

Expiration of the Rights. If a Record Date Shareholder allows the