Company: NXDT
Filing Date: 2025-04-11
Form Type: S-4
Source: 0001437749-25-011826
Chunk: 151

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-04-11
Form: S-4
Chunk 151
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 has net income from “prohibited transactions,” as defined in the Code, New NXDT will have to pay a 100% tax on that income. Prohibited transactions are, in general, certain sales or other dispositions of property, other than foreclosure property, held primarily for sale to customers in the ordinary course of business. |

| ● | If New NXDT should fail to satisfy the 75% gross income test or the 95% gross income test, as discussed below under “–Requirements for Qualification–Income Tests,” but has nonetheless maintained New NXDT’s qualification as a REIT because it has satisfied some other requirements, New NXDT will have to pay a 100% tax on an amount equal to (a) the gross income attributable to the greater of (i) 75% of New NXDT’s gross income over the amount of gross income that is qualifying income for purposes of the 75% test, and (ii) 95% of New NXDT’s gross income over the amount of gross income that is qualifying income for purposes of the 95% test, multiplied by (b) a fraction intended to reflect New NXDT’s profitability. |

| ● | If after consideration of New NXDT’s net operating loss carryforwards, New NXDT should fail to distribute during each calendar year at least the sum of (1) 85% of New NXDT’s REIT ordinary income for that year, (2) 95% of New NXDT’s REIT capital gain net income for that year and (3) any undistributed taxable income from prior periods, New NXDT would have to pay a 4% excise tax on the excess of that required distribution over the sum of the amounts actually distributed and retained amounts on which income tax is paid at the corporate level. |

| ● | If New NXDT derives “excess inclusion income” from a residual interest in a real estate mortgage investment conduit, or “REMIC,” or certain interests in a taxable mortgage pool, or “TMP,” New NXDT could be subject to U.S. federal corporate income tax to the extent that such income is allocable to certain types of tax-exempt stockholders that are not subject to unrelated business income tax, such as government entities. |

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| ● | If New NXDT receives non-arm’s-length income from a TRS (as defined under “–Requirements for Qualification–Asset Tests”), or as a result of services provided by a TRS