Company: NXDT
Filing Date: 2025-06-12
Form Type: S-4
Source: 0001437749-25-020201
Chunk: 56

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-06-12
Form: S-4
Chunk 56
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 REIT because it has satisfied some other requirements, New NXDT will have to pay a 100% tax on an amount equal to (a) the gross income attributable to the greater of (i) 75% of New NXDT’s gross income over the amount of gross income that is qualifying income for purposes of the 75% test, and (ii) 95% of New NXDT’s gross income over the amount of gross income that is qualifying income for purposes of the 95% test, multiplied by (b) a fraction intended to reflect New NXDT’s profitability. |

| ● | If after consideration of New NXDT’s net operating loss carryforwards, New NXDT should fail to distribute during each calendar year at least the sum of (1) 85% of New NXDT’s REIT ordinary income for that year, (2) 95% of New NXDT’s REIT capital gain net income for that year and (3) any undistributed taxable income from prior periods, New NXDT would have to pay a 4% excise tax on the excess of that required distribution over the sum of the amounts actually distributed and retained amounts on which income tax is paid at the corporate level. |

| ● | If New NXDT derives “excess inclusion income” from a residual interest in a real estate mortgage investment conduit, or “REMIC,” or certain interests in a taxable mortgage pool, or “TMP,” New NXDT could be subject to U.S. federal corporate income tax to the extent that such income is allocable to certain types of tax-exempt stockholders that are not subject to unrelated business income tax, such as government entities. |

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| ● | If New NXDT receives non-arm’s-length income from a TRS (as defined under “–Requirements for Qualification–Asset Tests”), or as a result of services provided by a TRS to tenants of New NXDT, New NXDT will be subject to a 100% tax on the amount of New NXDT’s non-arm’s-length income. |

| ● | If New NXDT fails to satisfy a REIT asset test, as described below, due to reasonable cause and New NXDT nonetheless maintains its REIT qualification because of specified cure provisions, New NXDT will generally be required to pay an excise tax. In such case, the amount of the excise tax will be at least $50,000 per failure, and, in the case of certain REIT