Company: NXDT
Filing Date: 2025-01-21
Form Type: 424B3
Source: 0001437749-25-001494
Chunk: 149

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-01-21
Form: 424B3
Chunk 149
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 Units for New NHT Shares, gain realized from such exchange by a Non-U.S. Holder of such Units would not be subject to U.S. federal income tax under the Foreign Investment in Real Property Tax Act, or FIRPTA, as a sale of a USRPI if: (1) such class of capital stock is “regularly traded,” as defined by applicable Treasury Regulations, on an established securities market such as the NYSE; and (2) such Non-U.S. Holder owned, actually and constructively, 10% or less of such class of capital stock throughout the shorter of the five-year period ending on the date of the exchange or the Non-U.S. Holder’s holding period. The REIT has not made any determination regarding whether these conditions would be satisfied. However, because the REIT is closely held and trading volume is limited, it is possible that such conditions would not be satisfied, in which case the Non-U.S. Holder would not be able to rely on this exception.

In addition, dispositions of Units by certain publicly traded Non-U.S. Holders that meet certain record-keeping and other requirements (“qualified shareholders”) generally are exempt from FIRPTA, except to the extent owners of such qualified shareholders that are not also qualified shareholders own, actually or constructively, more than 10% of the REIT’s capital stock. Furthermore, dispositions of Units by “qualified foreign pension funds” or entities all of the interests of which are held by “qualified foreign pension funds” are exempt from FIRPTA. Non-U.S. Holders should consult their tax advisors regarding the application of these rules.

Notwithstanding the foregoing, gain from the exchange of Units not otherwise subject to FIRPTA generally will be taxable to a Non-U.S. Holder if either (a) the investment in Units is treated as effectively connected with the conduct by the Non-U.S. Holder of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such gain is attributable), in which case the Non-U.S. Holder generally will be subject to the same treatment as U.S. Holders with respect to such gain, except that a Non-U.S. Holder that is a corporation may also be subject to the 30% branch profits tax (or such lower rate as may be specified by an applicable income tax treaty) on such gain, as adjusted for certain items, or (b) the