Company: CGCT
Filing Date: 2025-01-29
Form Type: S-1
Source: 0001104659-25-006780
Chunk: 322

Company: Cartesian Growth Corp III
Filing Date: 2025-01-29
Form: S-1
Chunk 322
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 that are included in income, and decreased by
amounts distributed but not taxed as dividends, under the above rules. In addition, if we are not a PFIC for any taxable year, such U.S. Holder
will not be subject to the QEF inclusion regime with respect to our Class A ordinary shares for such a taxable year.

Alternatively, if a U.S. Holder, at the
close of its taxable year, owns shares in a PFIC that are treated as marketable stock, the U.S. Holder may make a mark-to-market
election with respect to such shares for such taxable year. If the U.S. Holder makes a valid mark-to-market election for the first
taxable year of the U.S. Holder in which the U.S. Holder holds (or is deemed to hold) Class A ordinary shares in us and
for which we are determined to be a PFIC, such U.S. Holder generally will not be subject to the excess distribution rules described
above with respect to its Class A ordinary shares. Instead, in general, the U.S. Holder will include as ordinary income in
each taxable year the excess, if any, of the fair market value of its Class A ordinary shares at the end of its taxable year over
its adjusted basis in its Class A ordinary shares. These amounts of ordinary income would not be eligible for the favorable tax
rates applicable to qualified dividend income or long-term capital gains. The U.S. Holder also will recognize an ordinary loss in
respect of the excess, if any, of its adjusted basis in its Class A ordinary shares over the fair market value of its Class A
ordinary shares at the end of its taxable year (but only to the extent of the net amount of previously included income as a result of
the mark-to-market election). The U.S. Holder’s basis in its Class A ordinary shares will be adjusted to reflect any
such income or loss amounts, and any further gain recognized on a sale or other taxable disposition of its Class A ordinary shares
will be treated as ordinary income. Under current law, a mark-to-market election may not be made with respect to warrants.

The mark-to-market election is available only
for stock that is regularly traded on a national securities exchange that is registered with the SEC, including Nasdaq (on which we intend
to list the Class A ordinary shares), or on a foreign exchange or market that the IRS determines has rules sufficient to ensure
that the market price represents a legitimate and sound fair market value.