LEGAL PROCEEDINGS

Highland Income Fund
Item G.1.a.i. - Legal Proceedings

Two affiliated funds, including the Highland Income
Fund (f/k/a Highland Floating Rate Opportunities
Fund), are the beneficiaries of an approximately
$122 million judgment against Credit Suisse related
to a syndicated real estate transaction fraudulently
underwritten by the Swiss bank.  The judgment was
appealed up to the Dallas Court of Appeals, then the
Texas Supreme Court, remanded to the trial court,
and is back to the Dallas Court of Appeals.  The two
funds also are participants in a similar action
against Credit Suisse related to five additional
real estate deals in which the funds allege Credit
Suisse committed fraud in relation to the
underwriting.

INTERNAL CONTROL RPT

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

To the Shareholders and Board of Trustees of
Highland Income Fund

In planning and performing our audit of the
consolidated financial statements of Highland Income
Fund (the Fund) as of and for the year ended
December 31, 2021, in accordance with the standards
of the Public Company Accounting Oversight Board
(United States) (PCAOB), we considered the Funds
internal control over financial reporting, including
controls over safeguarding securities, as a basis
for designing our auditing procedures for the
purpose of expressing our opinion on the
consolidated financial statements and to comply with
the requirements of Form N-CEN, but not for the
purpose of expressing an opinion on the
effectiveness of the Funds internal control over
financial reporting.  Accordingly, we express no
such opinion.

The management of the Fund is responsible for
establishing and maintaining effective internal
control over financial reporting.  In fulfilling
this responsibility, estimates and judgments by
management are required to assess the expected
benefits and related costs of controls.  A funds
internal control over financial reporting is a
process designed to provide reasonable assurance
regarding the reliability of financial reporting and
the preparation of financial statements for external
purposes in accordance with generally accepted
accounting principles (GAAP).  A funds internal
control over financial reporting includes those
policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and
dispositions of the assets of the fund; (2) provide
reasonable assurance that transactions are recorded
as necessary to permit preparation of financial
statements in accordance with GAAP, and that
receipts and expenditures of the fund are being made
only in accordance with authorizations of management
and trustees of the fund; and (3) provide reasonable
assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of a
funds assets that could have a material effect on
the financial statements.

Because of its inherent limitations, internal
control over financial reporting may not prevent or
detect misstatements.  Also, projections of any
evaluation of effectiveness to future periods are
subject to the risk that controls may become
inadequate because of changes in conditions, or that
the degree of compliance with the policies or
procedures may deteriorate.

A deficiency in internal control over financial
reporting exists when the design or operation of a
control does not allow management or employees, in
the normal course of performing their assigned
functions, to prevent or detect misstatements on a
timely basis.  A material weakness is a deficiency,
or combination of deficiencies, in internal control
over financial reporting, such that there is a
reasonable possibility that a material misstatement
of the Funds annual or interim financial statements
will not be prevented or detected on a timely basis.

Our consideration of the Funds internal control over
financial reporting was for the limited purpose
described in the first paragraph and would not
necessarily disclose all deficiencies in internal
control that might be material weaknesses under
standards established by the PCAOB.  However, we
noted no deficiencies in the Funds internal control
over financial reporting and its operation,
including controls over safeguarding securities,
that we consider to be a material weakness as
defined above as of December 31, 2021.

This report is intended solely for the information
and use of management and the Board of Trustees of
the Fund and the Securities and Exchange Commission
and is not intended to be and should not be used by
anyone other than these specified parties.


COHEN & COMPANY, LTD.
Cleveland, Ohio
March 04, 2022