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NexPoint Real Estate Finance 2024 Dividend Income Tax Treatment

On February 7, 2025, NexPoint Real Estate Finance, Inc. (NYSE: NREF) made an important announcement concerning the tax implications for the company's dividend distributions in 2024. As a real estate investment trust (REIT), NexPoint has a specific structure that affects how dividend income is reported and taxed. This article outlines the company's final allocations for dividends paid on common and preferred stocks, which will be crucial for investors to consider during tax season.

Overview of Dividend Distributions

NexPoint has provided a breakdown of its dividend payments for 2024, specifying the income allocations categorized as taxable ordinary income and return of capital. Below are the key figures that investors should note:

Common Shares (CUSIP #65342V101)

The company issued quarterly dividends for its common stock as follows:

• - Ex Dividend Date: March 14, June 14, September 13, December 13, 2024
• - Record Date: March 15, June 14, September 13, December 13, 2024
• - Payable Date: March 28, June 28, September 30, December 31, 2024
• - Distribution Per Share: $0.50000 each quarter
• - Total Taxable Ordinary Income: $1.81376 per share
• - Return of Capital: $0.18624 per share

Series A Preferred Shares (CUSIP #65342V408)

For the Series A preferred shares, the following payment schedule applies:

• - Ex Dividend Date: January 11, April 12, July 15, October 15, 2024
• - Record Date: January 12, April 15, July 15, October 15, 2024
• - Payable Date: January 25, April 25, July 25, October 25, 2024
• - Distribution Per Share: $0.53125 each quarter
• - Total Taxable Ordinary Income: $2.12500 per share
• - Return of Capital: $0.00000

Series B Preferred Shares (Various CUSIPs)

The Series B stock also has a defined distribution schedule:

• - Ex Dividend Dates: January 24, February 22, March 22, April 24, May 23, June 25, July 25, August 23, September 25, October 25, November 25, December 24, 2024
• - Distribution Per Share: $0.18750 each month
• - Total Taxable Ordinary Income: $2.25 per share
• - Return of Capital: $0.00000

Tax Treatment Summary

According to the company's report, 99.24% of the taxable ordinary income qualifies as a REIT dividend under Section 199A. Only 0.76% is classified as qualified dividend income according to Section 857(c)(2). Therefore, shareholders should be prepared to accurately report these distinctions when filing their taxes.

Implications for Investors

Understanding the specifics of dividend income tax treatment is essential for effective tax planning. The allocations vary significantly between common and preferred shares, which investors may hold. Thus, it is advisable for shareholders to consult with tax professionals to optimize their tax filings and benefits.

NexPoint Real Estate Finance continues to strive for transparency in its financial reporting, enabling investors to make informed decisions. This announcement not only clarifies the expected income from dividends but also underscores NexPoint's commitment to delivering value to its shareholders through structured and reliable distributions.

Company Background

NexPoint Real Estate Finance, Inc. specializes in originating, structuring, and investing in various mortgage loans and securities. It is publicly traded on the New York Stock Exchange and focuses primarily on first-lien mortgage loans and multifamily properties. For additional details about the company, investors are encouraged to visit NexPoint's official website.