Company: ETY
Filing Date: 2025-02-14
Form Type: N-2ASR
Source: 0001193125-25-026876
Chunk: 90

Company: Eaton Vance Tax-Managed Diversified Equity Income Fund
Filing Date: 2025-02-14
Form: N-2ASR
Chunk 90
---
 capital gain will also be entitled to increase their tax basis in their Common Shares by the difference between the amount of the includable gains and the tax deemed paid by the Common Shareholder. The Fund is not required to, and there can be no assurance the Fund will, make this designation if it retains all or a portion of its net capital gain in a taxable year. Distributions of the Fund’s net capital gain that are properly reported by the Fund as capital gain dividends (“capital gain distributions”), if any, are taxable to Common Shareholders as long-term capital gain, regardless of the length of time the Common Shareholders have held their Common Shares. Distributions of gains from the sale of investments that the Fund owned for one year or less are generally taxable as ordinary income. If, for any taxable year, the Fund’s total distributions exceed the Fund’s current and accumulated earnings and profits, the excess will be treated as a tax-freereturn of capital to each Common Shareholder (up to the amount of the Common Shareholder’s basis in his or her Common Shares) and thereafter as gain from the sale of Common Shares (assuming the Common Shares are held as a capital asset). The amount treated as a tax-freereturn of capital will reduce the Common Shareholder’s adjusted basis in his or her Common Shares, thereby increasing his or her potential gain or reducing his or her potential loss on the subsequent sale or other disposition of his or her Common Shares. A corporation that owns Fund shares generally will only be entitled to the dividends-received deduction (“DRD”) to the extent of the amount of eligible dividends received by the Fund from domestic corporations for the taxable year, and only if holding period and other requirements are met at the shareholder and Fund levels. A portion of the Fund’s distributions may qualify for treatment as “qualified dividend income” as described below. If the Fund does not qualify as a RIC for any taxable year, the Fund’s taxable income will be subject to U.S. federal corporate income taxes, and all distributions from earnings and profits, including distributions of net long-term capital gain (if any), will be taxable to the shareholder as ordinary income. Such distributions may be eligible (i) to be treated as qualified dividend income in the case of individual and other noncorporate shareholders and (ii) for the DRD in the case of corporate shareholders, provided, in both cases, the shareholder meets certain holding period and other requirements in respect of the Fund’s shares. In addition, in order to requalify for taxation as