Company: NXDT
Filing Date: 2025-04-25
Form Type: 424B3
Source: 0001437749-25-013177
Chunk: 144

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-04-25
Form: 424B3
Chunk 144
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 selling the Old Shares or shares of New Stock, as applicable, the tax treatment of a REIT, and potential changes in applicable tax laws.

As used in this section, the term “U.S. shareholder” means a holder of Old Shares or New Stock, as applicable, who, for U.S. federal income tax purposes, is:

| ● | a citizen or resident of the United States; |

| ● | a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District of Columbia; |

| ● | an estate whose income is subject to U.S. federal income taxation regardless of the income’s source; or |

| ● | a trust (i) if a United States court can exercise primary supervision over the trust’s administration and one or more United States persons have authority to control all substantial decisions of the trust or (ii) that has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person. |

Nonresident alien individuals, foreign corporations, foreign partnerships and estates or trusts that in either case are not subject to U.S. federal income tax on a net income basis, who own Old Shares or shares of New Stock, as applicable, are referred to in this section as “non-U.S. shareholders.”

U.S. Federal Income Tax Consequences of the Conversion

The Conversion is intended to qualify as a reorganization under Section 368(a)(1)(F) of the Code, and the federal income tax consequences summarized below assume that the Conversion will so qualify.

Neither New NXDT nor Old NXDT will recognize any gain or loss as a result of the Conversion. Furthermore, shareholders will not recognize any gain or loss upon the exchange of Old Shares for shares of New Stock pursuant to the Conversion. The initial tax basis of the shares of New Stock received by a shareholder pursuant to the Conversion will be the same as such shareholder’s adjusted tax basis in the Old Shares being exchanged pursuant to the Conversion. The holding period of the shares of New Stock received by a shareholder pursuant to the Conversion will include such shareholder’s holding period with respect to the Old Shares being exchanged pursuant to the Conversion.

Taxation of New NXDT as a Real Estate Investment Trust

New NXDT’s qualification as a REIT under the Code will depend upon the satisfaction by Old NXDT for the period ending immediately prior to the Conversion, and New NXDT, thereafter, of requirements of the Code relating to qualification for REIT status. Some of