Company: SWZ
Filing Date: 2025-10-03
Form Type: N-2
Source: 0001999371-25-014685
Chunk: 14

Company: Total Return Securities Fund
Filing Date: 2025-10-03
Form: N-2
Chunk 14
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 to Rights Holders in book-entry form as soon as practicable, which the Fund expects to be no later than fifteen (15) days after the Expiration Date and after all allocations have been conducted.

U.S. Federal Income Tax Consequences Associated with the Offering. The following is a general summary of the material U.S. federal income tax consequences of the receipt of Rights by a Record Date Shareholder and a subsequent lapse or exercise of such Rights. The discussion is based upon applicable provisions of the Internal Revenue Code of 1986, as amended (the “Code”), the Treasury Regulations promulgated thereunder, and other authorities currently in effect but does not address any state, local, or foreign tax consequences of the Offering. Each Shareholder should consult its own tax advisor regarding specific questions as to U.S. federal, state, local, or foreign taxes. Each Shareholder should also review the discussion of certain U.S. federal income tax considerations affecting it and the Fund set forth under “Certain Additional Material United States Federal Income Tax Considerations” and should also see the Fund’s Statement of Additional Information under the heading “Certain Material United States Federal Income Tax Consequences.”

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Receipt of the Rights. The Fund believes that a Record Date Shareholder’s receipt of the Rights pursuant to the Offering should not be treated as a taxable distribution with respect to their existing Shares for U.S. federal income tax purposes. Section 305(a) of the Code states that a stockholder’s taxable income does not include in-kind stock dividends, including distributions of stock rights; however, the general non-recognition rule in Section 305(a) of the Code is subject to exceptions described in Section 305(b) of the Code, which include “disproportionate distributions.” A disproportionate distribution is a distribution or a series of distributions, including deemed distributions, that has the effect of the receipt of cash or other property by some stockholders or holders of debt instruments convertible into stock and an increase in the proportionate interest of other stockholders in a corporation’s assets or earnings and profits. The Fund believes that the receipt of the Rights pursuant to the Offering should not be treated as a disproportionate distribution for these purposes.

The Fund’s position regarding the tax-free treatment of the Rights distribution is not binding on the Internal Revenue Service (the “IRS”) or the courts. If this position is finally determined by the IRS or a court to be incorrect, whether on the basis that the issuance of the Rights is a “disproportionate