Company: NXDT
Filing Date: 2025-01-21
Form Type: 424B3
Source: 0001437749-25-001494
Chunk: 134

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-01-21
Form: 424B3
Chunk 134
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 computing income for a particular taxation year the portion of the net income (including the taxable portion of net capital gains) of NXDT computed under Canadian tax principles in accordance with the Tax Act, that is paid to the Resident Holder on their NXDT Common Shares in that taxation year (or payable to the Resident Holder in a taxation year where the Resident Holder is entitled to enforce payment of the amount in the taxation year), whether or not those amounts are received in cash, or otherwise.

Any other amount in excess of the net income (including the non-taxable portion of net capital gains) of NXDT computed under Canadian tax principles in accordance with the Tax Act that is paid or payable to a Resident Holder on the NXDT Common Shares in a taxation year generally should not be included in the Resident Holder’s income for the year, but such an amount which is paid to a Resident Holder generally will reduce the adjusted cost base of the NXDT Common Shares held by such Resident Holder. To the extent that the adjusted cost base of an NXDT Common Shares otherwise would be less than zero, the Resident Holder will be deemed to have realized a capital gain equal to the negative amount and the Resident Holder’s adjusted cost base of the NXDT Common Shares will be increased by the amount of such deemed capital gain.

Subject to the detailed rules in the Tax Act, a Resident Holder may be entitled to a foreign tax credit or deduction for any foreign withholding tax paid with respect to distributions received by the Resident Holder on NXDT Shares.

There is no assurance that the calculation of NXDT’s income for U.S. federal income tax purposes will be the same as its income would be calculated under Canadian tax principles in accordance with the Tax Act. It is not expected that NXDT will re-calculate its income under Canadian tax principles, nor will NXDT provide Resident Holders with any information regarding income that is paid or payable to the Resident Holders for Canadian tax purposes. Resident Holders are urged to consult their own tax advisors with respect to the tax consequences of distributions on their NXDT Common Shares, including the impact to the Resident Holder on the adjusted cost base of the NXDT Common Shares and the availability of a foreign tax credit or deduction for any foreign withholding tax paid with respect distributions on such NXDT Common Shares.

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A Resident Holder that disposes or is deemed to dispose of NXDT Common Shares in a taxation year will realize a capital gain (or capital loss) in the year of the disposition equal to the amount by which the