Company: PRIF-PJ
Filing Date: 2025-03-26
Form Type: N-2
Source: 0001554625-25-000027
Chunk: 178

Company: Priority Income Fund, Inc.
Filing Date: 2025-03-26
Form: N-2
Chunk 178
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 the excess of our net long-term capital gain over our net short-term capital loss). If we retain any net capital gain, we will be subject to tax at regular corporate rates on the amount retained and we may designate the retained amount as undistributed net capital gain in a notice to our shareholders, prior to the expiration of 60 days after close of our taxable year, who will be (i) required to include in income for U.S. federal income tax purposes, as long-term capital gain, their shares of such undistributed amount; and (ii) entitled to credit their proportionate shares of tax paid by us against their U.S. federal income tax liabilities, if any, and to claim refunds to the extent the credit exceeds such liabilities. For U.S. federal income tax purposes, the tax basis of the shares owned by a shareholder will be increased by the amount of undistributed net capital gain included in the shareholder’s gross income and decreased by the federal income tax paid by us on that amount of capital gain.

The IRS currently requires that a RIC that has two or more classes of stock allocate to each class proportionate amounts of each type of its income (such as ordinary income, capital gains, dividends treated as qualified dividend income and dividends qualifying for the dividends-received deduction) based upon the percentage of total dividends paid to each class for the taxable year. Accordingly, we will allocate capital gain dividends, dividends treated as qualified dividend income and dividends qualifying for the dividends-received deduction, if any, between shares of preferred stock (including the Series M Term

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Preferred Stock) and our common shares in proportion to the total dividends paid to each class with respect to such taxable year.

For purposes of determining (1) whether the Annual Distribution Requirement is satisfied for any year and (2) the amount of dividends paid for that year, we may, under certain circumstances, elect to treat a dividend that is paid during the following taxable year as if it had been paid during the taxable year in question. If we make such an election, the U.S. preferred stockholder will still be treated as receiving the dividend in the taxable year in which the distribution is made. However, any dividend declared by us in October, November or December of any calendar year, payable to stockholders of record on a specified date in such a month and actually paid during January of the following year, will be treated as if it had been received by our U.S. preferred stockholders on December 31 of the year in which