Company: SRV
Filing Date: 2025-10-22
Form Type: N-2/A
Source: 0001398344-25-019582
Chunk: 42

Company: NXG Cushing Midstream Energy Fund
Filing Date: 2025-10-22
Form: N-2/A
Chunk 42
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 the Fund.

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Taxation of the Fund

Since its inception and through
the Fund’s fiscal year ended November 30, 2017, the Fund was treated as a regular corporation, or a “C” corporation,
for U.S. federal income tax purposes and, as a result, unlike most investment companies, was subject to corporate income tax to the extent
the Fund recognized taxable income. In conjunction with certain changes to the Fund’s non-fundamental investment policies that became
effective on February 20, 2018, the Fund has managed its portfolio in a manner intended to allow the Fund to qualify as, and elected
to be treated as, a RIC for U.S. federal income tax purposes beginning with the Fund’s fiscal year ending November 30, 2018.
Except as otherwise expressly indicated, the remainder of this discussion assumes the Fund has qualified and will continue to qualify
for taxation as a RIC for its fiscal year ending November 30, 2018, and thereafter.

In order to qualify as a RIC,
the Fund must, among other things, satisfy certain income, asset diversification and distribution requirements. As long as it so qualifies,
and subject to the discussion of built-in gains below, the Fund will generally not be subject to U.S. federal income tax to the extent
that it distributes annually its investment company taxable income (which includes ordinary income and the excess of net short-term capital
gain over net long-term capital loss) and its “net capital gain” (i.e., the excess of net long-term capital gain over
net short-term capital loss). The Fund intends to distribute at least annually substantially all of such income and gain. If the Fund
retains any investment company taxable income or net capital gain, it will be subject to U.S. federal income tax on the retained amount
at regular corporate tax rates. In addition, if the Fund fails to qualify as a RIC for any taxable year and relief is not available, it
will be subject to U.S. federal income tax on all of its income and gains at regular corporate tax rates. Furthermore, the Fund will be
subject to regular U.S. federal income tax on any built-in gains that existed in its assets as of the time of its conversion to a RIC,
to the extent such gains were recognized within five years of that time.

Taxation of Common Shareholders

For each taxable year the Fund
is treated as a RIC for U