Company: NXDT
Filing Date: 2025-01-21
Form Type: 424B3
Source: 0001437749-25-001494
Chunk: 152

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-01-21
Form: 424B3
Chunk 152
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 be treated as a sale or exchange of the redeemed Units. See “—Consequences of a Redemption to a U.S. Holder.” Qualified shareholders and their owners may be subject to different rules, and should consult their tax advisors regarding the application of such rules.

If the Redemption is treated as a distribution, the amount of such distribution will be measured by the amount of cash received. Redemption proceeds treated as distributions that are neither attributable to gains from sales or exchanges by the REIT of United States real property interests, or USRPIs, nor designated by the REIT as capital gain dividends (except as described below) will be treated as dividends of ordinary income to the extent that they are made out of the REIT’s current or accumulated earnings and profits. Such redemption proceeds generally will be subject to withholding of U.S. federal income tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty, unless the redemption proceeds are treated as effectively connected with the conduct by the Non-U.S. Holder of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such dividends are attributable). Under certain treaties, however, lower withholding rates generally applicable to dividends do not apply to dividends from a real estate investment trust. Certain certification and disclosure requirements must be satisfied for a Non-U.S. Holder to be exempt from withholding under the effectively connected income exemption. Redemption proceeds treated as dividends that are treated as effectively connected with a U.S. trade or business generally will not be subject to withholding but generally will be subject to U.S. federal income tax on a net basis at the regular graduated rates, in the same manner as dividends paid to U.S. Holders are subject to U.S. federal income tax. Any such redemption proceeds treated as dividends received by a Non-U.S. Holder that is a corporation may also be subject to an additional branch profits tax at a 30% rate (applicable after deducting U.S. federal income taxes paid on such effectively connected income) or such lower rate as may be specified by an applicable income tax treaty.

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Except as otherwise provided below, the REIT expects to withhold U.S. federal income tax at the rate of 30% on any distributions made to a Non-U.S. Holder unless: (1) a lower treaty rate applies and the Non-U.S. Holder furnishes an IRS Form W-