Company: GDV-PK
Filing Date: 2025-08-08
Form Type: N-14
Source: 0001829126-25-006008
Chunk: 101

Company: GABELLI DIVIDEND & INCOME TRUST
Filing Date: 2025-08-08
Form: N-14
Chunk 101
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 had been liquidated) or, alternatively, to be subject to taxation on such built-in gain recognized for a period of five years. The remainder of this discussion assumes that Preferred Trust qualifies for taxation as a RIC.

Certain of Preferred Trust’s investment practices are subject to special and complex U.S. federal income tax provisions that may, among other things, (i) disallow, suspend or otherwise limit the allowance of certain losses or deductions, (ii) convert lower taxed long term capital gains or qualified dividend income into higher taxed short term capital gains or ordinary income, (iii) convert an ordinary loss or deduction into capital loss (the deductibility of which is more limited), (iv) cause Preferred Trust to recognize income or gain without a corresponding receipt of cash, (v) adversely affect the time as to when a purchase or sale of stock or securities is deemed to occur, (vi) adversely alter the characterization of certain complex financial transactions and (vii) produce income that will not qualify as good income for purposes of the 90% annual gross income requirement described above. These U.S. federal income tax provisions could therefore affect the amount, timing and character of distributions to shareholders. Preferred Trust will monitor its transactions and may make certain tax elections and may be required to borrow money or dispose of securities to mitigate the effect of these rules and prevent disqualification of Preferred Trust as a RIC.

Gain or loss on the sale of securities by Preferred Trust will generally be long term capital gain or loss if the securities have been held by Preferred Trust for more than one year. Gain or loss on the sale of securities held for one year or less will be short term capital gain or loss.

Foreign currency gain or loss on non-U.S. dollar-denominated securities and on any non-U.S. dollar-denominated futures contracts, options and forward contracts that are not section 1256 contracts (as defined below) generally will be treated as ordinary income and loss.

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The premium received by Preferred Trust for writing a call option is not included in income at the time of receipt. If the option expires, the premium is short term capital gain to Preferred Trust. If Preferred Trust enters into a closing transaction, the difference between the amount paid to close out its position and the premium received is short term capital gain or loss. If a call option written by Preferred Trust is exercised, thereby requiring Preferred Trust to sell the underlying security, the premium will increase the amount realized upon the sale of the security and any resulting gain or loss