Company: PDSRX
Filing Date: 2025-07-25
Form Type: 486BPOS
Source: 0001756404-25-000017
Chunk: 73

Company: Principal Real Asset Fund
Filing Date: 2025-07-25
Form: 486BPOS
Chunk 73
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 be subject to a 20% tax rate), regardless of how long you have held your shares. Distributions of investment income properly designated by the Fund as derived from “qualified dividend income” will be taxed at the rates applicable to long-term capital gains. Some high-income individuals and taxable trusts will be subject to a Medicare 3.8% tax on unearned net investment income.

Occasionally, the Fund may pay a distribution classified as a return of capital. A return of capital is a non-dividend distribution that is not paid out of the earnings and profits of the Fund. As an example, the cash flow of a REIT that owns properties may exceed its taxable income because of non-cash expenses, such as property depreciation. The REIT, and in turn the Fund, may distribute this excess cash to shareholders. This distribution is classified as a return of capital. A return of capital distribution is generally not taxed until your investment in the Fund has been recovered. A return of capital reduces your cost basis in the Fund, which may increase your tax liability upon the sale of your Fund shares or upon subsequent distributions in respect of your investment in the Fund. Any return of capital distributions in excess of your cost basis will be treated as capital gains.

Because of tax law requirements, you must provide the Fund with an accurate and certified taxpayer identification number (for individuals, generally a Social Security number) to avoid “back-up” withholding, which is imposed at a rate of 24%. The Fund is required in certain cases to withhold and remit to the U.S. Treasury 24% of ordinary income dividends and capital gain dividends, and the proceeds of redemption of shares, paid to any shareholder who: has provided either an incorrect tax identification number or no number at all; is subject to backup withholding by the Internal Revenue Service for failure to report the receipt of interest or dividend income properly; or has failed to certify to the Fund that it is not subject to backup withholding or that it is a corporation or other "exempt recipient."

A shareholder recognizes gain or loss on the sale or redemption of shares of the Fund in an amount equal to the difference between the proceeds of the sales or redemption and the shareholder's adjusted tax basis in the shares. Under section 302 of the Code, the Fund’s repurchase of a shareholder’s shares generally will be treated as an exchange, and thus eligible for capital gain treatment, if it (1) results in a “complete termination” of the shareholder’s interest in the Fund, (2) results in a “