Company: CLM
Filing Date: 2025-04-08
Form Type: N-2/A
Source: 0001398344-25-006812
Chunk: 57

Company: Cornerstone Strategic Investment Fund, Inc.
Filing Date: 2025-04-08
Form: N-2/A
Chunk 57
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 real estate values or make
REIT shares less attractive than other income producing investments. REITs are also subject to heavy cash flow dependency, defaults by
borrowers and self-liquidation.

| 38 |

Qualification as a REIT under the Code in any particular
year is a complex analysis that depends on a number of factors. There can be no assurance that the entities in which the Fund invests
with the expectation that they will be taxed as a REIT will qualify as a REIT. An entity that fails to qualify as a REIT would be subject
to a corporate level tax, would not be entitled to a deduction for dividends paid to its stockholders and would not pass through to its
stockholders the character of income earned by the entity. If the Fund were to invest in an entity that failed to qualify as a REIT,
such failure could drastically reduce the Fund’s yield on that investment.

REITs can be classified as equity REITs, mortgage
REITs and hybrid REITs. Equity REITs invest primarily in real property and earn rental income from leasing those properties. They may
also realize gains or losses from the sale of properties. Equity REITs will be affected by conditions in the real estate rental market
and by changes in the value of the properties they own. Mortgage REITs invest primarily in mortgages and similar real estate interests
and receive interest payments from the owners of the mortgaged properties. They are paid interest by the owners of the financed properties.
Mortgage REITs will be affected by changes in creditworthiness of borrowers and changes in interest rates. Hybrid REITs invest both in
real property and in mortgages. Equity and mortgage REITs are dependent upon management skills, may not be diversified and are subject
to the risks of financing projects.

Dividends paid by REITs will not generally qualify
for the reduced U.S. federal income tax rates applicable to qualified dividends under the Code, provided, however, the Fund may designate
certain dividends from a REIT as “Section 199A dividends,” which may be taxed to individual Stockholders and other non-corporate
Stockholders at a reduced effective U.S. federal income tax rate depending on whether certain requirements are satisfied. Investors should
see the discussion under the heading “Certain Additional Material United States Federal Income Tax Consequences” for more
information relating to Section 199A dividends.

The Fund’s investment in REITs may include
an additional