Company: SRV
Filing Date: 2025-04-10
Form Type: N-2
Source: 0001398344-25-006954
Chunk: 63

Company: NXG Cushing Midstream Energy Fund
Filing Date: 2025-04-10
Form: N-2
Chunk 63
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Taxation of the Fund

Since its inception and through
the Fund’s fiscal year ended November 30, 2017, the Fund was treated as a regular corporation, or a “C” corporation,
for U.S. federal income tax purposes and, as a result, unlike most investment companies, was subject to corporate income tax to the extent
the Fund recognized taxable income. In conjunction with certain changes to the Fund’s non-fundamental investment policies that became
effective on February 20, 2018, the Fund has managed its portfolio in a manner intended to allow the Fund to qualify as, and the
Fund elected to be treated as, a RIC for U.S. federal income tax purposes beginning with the Fund’s fiscal year ending November 30,
2018. Except as otherwise expressly indicated, the remainder of this discussion assumes the Fund has qualified, and will continue to qualify,
for taxation as a RIC for its fiscal year ending November 30, 2018, and thereafter.

In order to qualify to be taxed
as a RIC, the Fund must, among other things: (i) derive in each taxable year at least 90% of its gross income from the following sources,
which are referred herein as “Qualifying Income”: (a) dividends, interest (including tax-exempt interest), payments with respect
to certain securities loans, gains from the sale or other disposition of stock, securities, or foreign currencies, or other income (including,
but not limited to, gain from options, futures and forward contracts) derived with respect to its business of investing in such stock,
securities or currencies and (b) net income derived from interests in certain publicly traded partnerships that are treated as partnerships
for U.S. federal income tax purposes and derive less than 90% of their gross income from the items described in clause (a) above
(each a “Qualified Publicly Traded Partnership”), which includes most MLPs; and (ii) diversify its holdings so that, at the
end of each quarter of each taxable year (a) at least 50% of the value of the Fund’s total assets is represented by cash and cash
items, U.S. government securities, the securities of other RICs and other securities, with such other securities limited, in respect of
any one issuer, to an amount not greater than 5% of the value of the Fund’s total assets and not more than 10% of the outstanding
voting securities of such issuer and