Company: CLM
Filing Date: 2025-04-21
Form Type: 424B3
Source: 0001398344-25-007380
Chunk: 112

Company: Cornerstone Strategic Investment Fund, Inc.
Filing Date: 2025-04-21
Form: 424B3
Chunk 112
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 B-21 |

If the Fund acquires any equity interest in certain
foreign corporations that receive at least 75% of their annual gross income from passive sources (such as interest, dividends, certain
rents and royalties, or capital gains) or that hold at least 50% of their assets in investments producing such passive income (“passive
foreign investment companies”), the Fund could be subject to U.S. federal income tax and additional interest charges on “excess
distributions” received from such companies or on gain from the sale of stock in such companies, even if all income or gain actually
received by the Fund is timely distributed to its stockholders. The Fund would not be able to pass through to its stockholders any credit
or deduction for such a tax. An election may generally be available that would ameliorate these adverse tax consequences, but any such
election could require the Fund to recognize taxable income or gain (subject to tax distribution requirements) without the concurrent
receipt of cash and would require certain information to be furnished by the foreign corporation, which may not be provided. These investments
could also result in the treatment of associated capital gains as ordinary income. The Fund may limit and/or manage its holdings in passive
foreign investment companies to limit its tax liability or maximize its return from these investments. Dividends paid by passive foreign
investment companies will not qualify as qualified dividend income eligible for taxation at reduced tax rates.

If the Fund utilizes leverage through borrowing,
it may be restricted by loan covenants with respect to the declaration of, and payment of, dividends in certain circumstances. Limits
on the Fund’s payments of dividends may prevent the Fund from meeting the distribution requirements, described above, and may,
therefore, jeopardize the Fund’s qualification for taxation as a RIC and possibly subject the Fund to the 4% excise tax. The Fund
will endeavor to avoid restrictions on its ability to make dividend payments.

Taxation of Sales, Exchanges, or Other Dispositions

The sale, exchange or redemption of Fund shares may
give rise to a gain or loss. Such gain or loss would generally be treated as capital gain or loss if the Fund shares are held as a capital
asset. In general, any gain or loss realized upon a taxable disposition of shares will be treated as long-term capital gain or loss if
the shares have been held for more than one year. Otherwise, the gain or loss on the taxable disposition of Fund shares will be treated
as short-term capital gain