Company: SWZ
Filing Date: 2025-10-23
Form Type: N-2/A
Source: 0001999371-25-015937
Chunk: 51

Company: Total Return Securities Fund
Filing Date: 2025-10-23
Form: N-2/A
Chunk 51
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 the form of dividends or capital gain distributions. The Code imposes a 4% nondeductible excise tax on RICs, such as the Fund, to the extent they do not meet certain distribution requirements by the end of each calendar year. The Fund anticipates meeting these distribution requirements.

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Taxation of Distributions

The Fund intends to make distributions of investment company taxable income after payment of the Fund’s operating expenses. For U.S. federal income tax purposes, all distributions are generally taxable as ordinary income or capital gains. Distributions of the Fund’s investment company taxable income (including short-term capital gains) will generally be treated as ordinary income to the extent of the Fund’s current and accumulated earnings and profits. Distributions of the Fund’s net capital gains (“capital gain dividends”), if any, are taxable to Shareholders as long-term capital gains, regardless of the length of time Shares have been held by Shareholders. Distributions, if any, in excess of the Fund’s earnings and profits will first reduce the adjusted tax basis of a Shareholder’s Shares and, after that basis has been reduced to zero, will constitute capital gains to the Shareholder (assuming the Shares are held as a capital asset). See below for a summary of the maximum tax rates applicable to capital gains (including capital gain dividends). A corporation that owns Shares generally will not be entitled to the dividends received deduction with respect to all of the dividends it receives from the Fund. Fund dividend payments that are attributable to qualifying dividends received by the Fund from certain domestic corporations may be designated by the Fund as being eligible for the dividends received deduction. There can be no assurance as to what portion of Fund dividend payments may be classified as qualifying dividends. With respect to the distributions of investment company taxable income described above, it may be the case that any such distributions would result in a return of capital to the Shareholder. The determination of the character for U.S. federal income tax purposes of any distribution from the Fund ( i.e., ordinary income dividends, capital gains dividends, qualifying dividends, return-of-capital distributions) will be made as of the end of the Fund’s taxable year. Generally, no later than 60 days after the close of its taxable year, the Fund will provide Shareholders with a written notice designating the amount of any capital gain dividends or other distributions. See “Distribution Policy” for a more complete description of such returns and the risks associated with them.

The Fund may elect to retain its net capital gain or a portion