Company: NXDT
Filing Date: 2025-01-21
Form Type: 424B3
Source: 0001437749-25-001494
Chunk: 144

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-01-21
Form: 424B3
Chunk 144
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 tax basis in Units surrendered therefor. A U.S. Holder’s adjusted tax basis in the Units generally will equal the U.S. Holder’s acquisition cost of such shares, reduced by any prior distributions with respect to such shares treated as a return of basis.

U.S. Holders should consult their tax advisers regarding the U.S. federal income tax consequences of the Restructuring if it does not qualify as an F Reorg (including the requirement to recognize gain in that event).

Qualification of the Company Merger as an A Reorg

The Company Merger is expected to be treated as a “reorganization” described in Section 368(a)(1)(A) of the Code (an “A Reorg”). However, there is no assurance that the IRS or any court will agree with this position. U.S. Holders should be aware that the completion of the Transaction is not conditioned on the receipt of an opinion of counsel that the Company Merger (or any other aspect of the Transaction) qualify as tax-free transactions. Neither the REIT, New NHT nor NXDT has requested or will request a ruling from the IRS with respect to any aspect of the U.S. federal income tax treatment of the Transaction.

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The treatment of the Company Merger with respect to a U.S. Holder generally is expected to correspond to the treatment of the Restructuring with respect to U.S. Holders as described above. If the Company Merger qualifies as an A Reorg, the treatment of the Company Merger with respect to a U.S. Holder exchanging New NHT Shares for NXDT Common Shares generally is expected to correspond to the treatment of the Restructuring with respect to U.S. Holders exchanging Units for New NHT Shares therein (assuming the Restructuring qualifies as an F Reorg). If the Company Merger does not qualify as an A Reorg, the treatment of the Company Merger with respect to a U.S. Holder exchanging New NHT Shares for NXDT Common Shares generally is expected to correspond to the treatment of the Restructuring with respect to U.S. Holders exchanging Units for New NHT Shares therein (assuming the Restructuring does not qualify as an F Reorg). If the Restructuring fails to qualify as an F Reorg and the Company Merger fails to qualify as an A Reorg, it generally is expected that each of the Restructuring and Company Merger will be treated as a taxable exchange as discussed above