Company: NXDT
Filing Date: 2025-06-12
Form Type: S-4
Source: 0001437749-25-020201
Chunk: 62

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-06-12
Form: S-4
Chunk 62
---
s, income derived from REMICs, in proportion to the real estate mortgages held by the REMIC, and gains from the sale of real estate assets, as well as specified income from temporary investments. |

| ● | Second, at least 95% of New NXDT’s gross income for each taxable year, excluding gross income from prohibited transactions and certain hedging transactions, must be derived from real property investments as described in the preceding bullet point, dividends, interest and gain from the sale or disposition of stock or securities, or from any combination of these types of sources, which need not have any relation to real property. |

<div align='center'>48</div>

New NXDT may earn “interest” income to satisfy the tests above, but the term “interest” generally does not include any amount received or accrued, directly or indirectly, if the determination of that amount depends in whole or in part on the income or profits of any person. However, an amount received or accrued generally will not be excluded from the term “interest” solely because the amount of the interest is based on a fixed percentage of percentages of receipts or sales.

Rents that New NXDT receives will qualify as rents from real property in satisfying the gross income requirements for a New NXDT described above only if the rents satisfy several conditions.

| ● | First, the amount of rent must not be based in whole or in part on the income or profits of any person. However, an amount received or accrued generally will not be excluded from rents from real property solely because the rent is based on a fixed percentage or percentages of receipts or sales. |

| ● | Second, the Code provides that rents received from a tenant will not qualify as rents from real property in satisfying the gross income tests if New NXDT, directly or under the applicable attribution rules, owns a 10% or greater interest in that tenant; except that rents received from a TRS under certain circumstances qualify as rents from real property even if New NXDT owns more than a 10% interest in the subsidiary. We refer to a tenant in which New NXDT owns a 10% or greater interest as a “related party tenant.” |

| ● | Third, if rent attributable to personal property leased in connection with a lease of real property is greater than 15% of the total rent received under the lease, then the portion of rent attributable to the personal property will not qualify as rents from real property. |

| ● | Finally, for rents received to qualify as rents from real property, except