Company: SWZ
Filing Date: 2025-10-03
Form Type: N-2
Source: 0001999371-25-014685
Chunk: 16

Company: Total Return Securities Fund
Filing Date: 2025-10-03
Form: N-2
Chunk 16
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 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 Rights received in the Offering to expire, the Record Date Shareholder should not recognize any gain or loss for U.S. federal income tax purposes, and the Record Date Shareholder should re-allocate any portion of the tax basis in its existing Shares previously allocated to the Rights that have expired to the existing Shares.

Employee Plan Considerations. Record Date Shareholders that are employee benefit plans subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), including corporate savings and 401(k) plans, Keogh Plans of self-employed individuals and Individual Retirement Accounts (“IRA”) (each a “Benefit Plan” and collectively, “Benefit Plans”), should be aware that additional contributions of cash in order to exercise Rights may be treated as Benefit Plan contributions and, when taken together with contributions previously made, may subject a Benefit Plan to excise