Company: NXDT
Filing Date: 2025-01-30
Form Type: 424B5
Source: 0001437749-25-002263
Chunk: 56

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-01-30
Form: 424B5
Chunk 56
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 in our Declaration.

Preemptive Rights

No holders of Series B Preferred Shares will, as the holders thereof, have any preemptive rights to purchase or subscribe for our common shares or any other security of our Company.

<div align='center'>S-33

SUPPLEMENTAL MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS</div>

This summary supplements the discussion contained under the caption“Material U.S. Federal Income Tax Considerations”in the accompanying prospectus and should be read in conjunction therewith. This summary is for general information purposes only and is not tax advice. This discussion does not address all aspects of taxation that may be relevant to particular holders of our Series B Preferred Shares in light of their personal investment or tax circumstances.

We urge prospective investors to consult their own tax advisors regarding the specific tax consequences to them of the acquisition, ownership and disposition of our Series B Preferred Shares and of our election to be taxed as a REIT. Specifically, prospective investors should consult their own tax advisors regarding the federal, state, local, foreign and other tax consequences of such acquisition, ownership, disposition and election and regarding potential changes in applicable tax laws.

Conversion of Series B Preferred Shares

A U.S. Holder generally will not recognize gain or loss upon the conversion of Series B Preferred Shares into our common shares, except to the extent the conversion is treated as a constructive distribution under Section 305(c) of the Code as described in the accompanying prospectus under “Material U.S. Federal Income Tax Considerations”, and a U.S. Holder’s basis and holding period in our common shares received upon conversion generally will be the same as those of the converted Series B Preferred Shares. Any common shares received in a conversion that are attributable to accumulated and unpaid dividends on the converted Series B Preferred Shares will be treated as a distribution that is potentially taxable as a dividend.

The changes to the conversion rate of Series B Preferred Shares may result in constructive distributions under Section 305(c) of the Code to the U.S. Holders of such Series B Preferred Shares includable in income in the manner similar to other distributions on the Series B Preferred Shares as described in the accompanying prospectus under “Material U.S. Federal Income Tax Considerations”, if and to the extent that the changes in the conversion rate increase the proportionate interest of a Series B Preferred Share in our earnings and profits. Thus, a U.S. holder may recognize income in the event of a constructive distribution even though such holder may not receive any cash or property. Under proposed regulations