Company: NXDT
Filing Date: 2025-01-21
Form Type: 424B3
Source: 0001437749-25-001494
Chunk: 136

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-01-21
Form: 424B3
Chunk 136
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 are complex and their application to a particular Resident Holder will depend on the Resident Holder's particular circumstances. Resident Holders should consult their own tax advisors with regard to the Capital Gains Proposals.

To the extent a Resident Holder is subject to U.S. withholding tax in respect of the Reorganization or the ownership or disposition of NXDT Common Shares, the amount of such tax generally may be eligible for foreign tax credit or deduction treatment, subject to the detailed rules and limitations under the Tax Act; provided, however, that to the extent that any U.S. tax withheld does not represent the final U.S. income tax liability for the year, the Resident Holder also files a U.S. federal income tax return to establish the Holder’s final U.S. income tax liability for the year and the Resident Holder is not entitled to a refund of such tax.

A Resident Holder’s ability to apply U.S. withholding taxes may be affected where the Resident Holder does not have sufficient taxes otherwise payable under Part I of the Tax Act, or sufficient U.S. source income in the taxation year the U.S. withholding taxes are paid, or where the Resident Holder has other U.S. sources of income or losses, or has paid other U.S. taxes. Although the foreign tax credit provisions are generally designed to avoid double taxation, the maximum credit can be limited. Resident Holders should consult their own tax advisors with respect to the availability of a foreign tax credit or deduction, having regard to their own circumstances.

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A Resident Holder that: (i) throughout the relevant taxation year, is a “Canadian-controlled private corporation” (as defined in the Tax Act), or (ii) at any time in the relevant taxation year, is a “substantive CCPC” (as defined in the Tax Act), may be liable to pay an additional tax (refundable in certain circumstances) on its “aggregate investment income” (as defined in the Tax Act) for the year, which is generally defined to include all or substantially all of the income paid or payable to the Resident Holder by the REIT or NXDT, and net taxable capital gains.

Capital gains realized by a Resident Holder who is an individual (other than certain specified trusts) may result in such Resident Holder being liable for alternative minimum tax as calculated under the detailed rules set out in the Tax Act. Resident Holders to whom these rules may be relevant should consult their own tax advisors.

Generally, a Resident Holder that is a “specified Canadian entity” (