Company: PRIF-PJ
Filing Date: 2025-03-26
Form Type: N-2
Source: 0001554625-25-000027
Chunk: 177

Company: Priority Income Fund, Inc.
Filing Date: 2025-03-26
Form: N-2
Chunk 177
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 have satisfied the Annual Distribution Requirement.

#### Taxation of U.S. Preferred Stockholders
Distributions made by us on the Series M Term Preferred Stock generally will be taxable to U.S. preferred stockholders as ordinary income or capital gains. Distributions of our “investment company taxable income” (which is, generally, our net ordinary income plus realized net short-term capital gains in excess of realized net long-term capital losses) will be taxable as ordinary income to U.S. preferred stockholders to the extent of our current or accumulated earnings and profits, whether paid in cash or reinvested in additional shares. To the extent such distributions paid by us to non-corporate U.S. preferred stockholders (including individuals) are attributable to dividends from U.S. corporations and certain qualified foreign corporations, such distributions, or “Qualifying Dividends,” may be eligible for a current maximum tax rate of 20%. In this regard, it is anticipated that distributions paid by us on the Series M Term Preferred Stock will generally not be attributable to dividends and, therefore, generally will not qualify for the current 20% maximum rate applicable to Qualifying Dividends. A corporation that owns Series M Term Preferred Stock may be eligible for a dividends received deduction with respect to a portion of an ordinary distribution it receives from us that are attributable to dividends from domestic corporations, provided we properly report the eligible portion and the corporate stockholder satisfies certain holding period requirements. Given our investment strategies, it is not anticipated that a significant portion of our dividends paid on the Series M Term Preferred Stock will be eligible for the dividends received deduction.

Distributions of our net capital gains (which is generally our realized net long-term capital gains in excess of realized net short-term capital losses) properly reported by us as “capital gain dividends” will be taxable to a U.S. preferred stockholder as long-term capital gains that are currently taxable at a current maximum rate of 20% in the case of individuals, trusts or estates, regardless of the U.S. preferred stockholder’s holding period for his, her or its shares and regardless of whether paid in cash or reinvested in additional shares. Distributions in excess of our current and accumulated earnings and profits first will reduce a U.S. preferred stockholder’s adjusted tax basis in such stockholder’s shares and, after the adjusted tax basis is reduced to zero, will constitute capital gains to such U.S. preferred stockholder.

We may retain for investment all or a portion of our “net capital gain” (i.e.,