Company: NXDT
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001356115-25-000003
Chunk: 1085

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-03-31
Form: 10-K
Item: Item 7A
Chunk 1085
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, the Company recognizes interest and/or penalties related to uncertain tax positions on its Consolidated Statement of Operations and Comprehensive Income (Loss). The Company has not recorded any uncertain tax positions for the years ended December 31, 2024 and 2023.

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A reconciliation of the statutory income tax provisions to the effective income tax provisions for the periods indicated is as follows (in thousands):For the Year Ended December 31,20242023Expected tax at statutory rate$(11,592)21.0 %$(24,047)21.0 %Non-taxable REIT income10,838 -19.6 %27,426 -24.0 %Change in valuation allowance2,126 -3.9 %(648)0.6 %Total provision$1,372 -2.5 %$2,731 -2.4 %II.Canadian mutual fund statusNHT is a mutual fund trust pursuant to the Income Tax Act (Canada) (the “Tax Act”). Under current tax legislation, a mutual fund trust that is not a specified investment flow-through trust (“SIFT”) pursuant to the Tax Act generally is entitled to deduct distributions of taxable income such that it is not liable to pay Canadian income taxes provided that its taxable income is fully distributed to unitholders. NHT intends to qualify as a mutual fund trust that is not a SIFT and to make distributions not less than the amount necessary to ensure that NHT will not be liable to pay Canadian income taxes.Deferred Tax AssetsAs of December 31, 2024, significant components of the net deferred tax assets (“DTA”) of the Company’s TRSs were as follows (in thousands): Deferred Tax Asset as of December 31, 2024Deferred Tax Asset as of December 31, 2023Capital loss carryover from prior year$137 $137 Capital loss carryover to be utilized in current year— — Net operating loss carryover from prior year298 442 Net operating loss carryover to be utilized in current year(145)(138)Unrealized tax loss on investments21,503 19,384 Total deferred tax assets$21,793 $19,825 Valuation allowance(17,022)(14,896)Deferred tax liability(2,153)(2,033)Net deferred tax asset$2,618 $2,896 The Company may not offset tax assets or liabilities from one TRS