Company: MYI
Filing Date: 2025-07-15
Form Type: 425
Source: 0001193125-25-159406
Chunk: 37

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-07-15
Form: 425
Chunk 37
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 which a U.S. holder must reduce its basis is uncertain in
situations where the holder owns different blocks of stock that were acquired at different prices and thus have different bases. Each stockholder should consult its tax adviser with respect to the particular U.S. federal income tax consequences to
such stockholder of participating in the Offer.

. In determining whether the provisions under
Section 302(b) of the Code, as described below, are satisfied, a stockholder must take into account not only Shares actually owned by such stockholder, but also Shares that are constructively owned within the meaning of Section 318 of the
Code. Under Section 318 of the Code, a stockholder may constructively own Shares actually owned, and in some cases constructively owned, by certain related individuals and certain entities in which the stockholder or a related individual or
entity has an interest. The rules of constructive ownership are complex and must be applied to a particular stockholder’s situation by a tax adviser.

. Under Section 302(b) of the Code, a redemption will be taxed as
an exchange, and not as a dividend, if it (a) results in a “complete redemption” of all the Shares owned by a stockholder, (b) is “substantially disproportionate” with respect to a stockholder, or (c) is “not
essentially equivalent to a dividend” with respect to a stockholder. Each stockholder should be aware that, under certain circumstances, sales, purchases, or transfers of Shares in the market or to or from other parties contemporaneous with
sales pursuant to the Offer may be taken into account in determining whether the tests under clause (a), (b), or (c) above are satisfied. Further, the Fund believes that in the event the Offer is oversubscribed, resulting in a proration, it is
likely that less than all the Shares tendered by a stockholder will be purchased by the Fund. Proration may affect whether a sale by a stockholder will satisfy the provisions (a), (b), or (c) above.

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A brief description of the three major applicable provisions of Section 302(b) of the Code is as follows:

| 1. | A Complete Redemption of Interest. The receipt of cash by a stockholder will result in a “complete                                                                                                                                              
 redemption” of all the Shares owned by the stockholder within the meaning of Section 302(b)(3) of the Code if either (i) all the Shares actually and