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Are my distributions taxed at the ordinary income rate? Do I receive the benefit of depreciation?

The Fund elects to be taxed as a real estate investment trust (REIT) to avoid corporate-level taxes, provided it distributes at least 95% of taxable income to investors. The REIT structure offers the following benefits:

• No corporate income tax if it meets REIT qualifications
• Pass-through taxation of rental income to investors
• Potential 20% deduction on qualified REIT dividends under the Tax Cuts and Jobs Act

The Fund invests through its REIT subsidiary, and distributions received from the REIT are treated as either ordinary income, return of capital or capital gains. Distributions, to the extent that they are from current or accumulated earnings and profits, generally are taxed as ordinary income. However, the depreciation available to the REIT subsidiary may reduce the amount of its taxable income and profit, and this reduction would enable the REIT subsidiary to make distributions that will be treated as a return of capital. Any portion of the distribution in excess of current and accumulated earnings and profits is considered a return of capital for U.S. federal income tax purposes and reduces the tax basis of the investment. Once your tax basis has been reduced to zero, any further distributions results in capital gains.