Company: TACOW
Filing Date: 2025-03-21
Form Type: S-1
Source: 0001829126-25-001978
Chunk: 133

Company: Berto Acquisition Corp.
Filing Date: 2025-03-21
Form: S-1
Chunk 133
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. The transaction may require a shareholder or warrant holder to recognize taxable income in the jurisdiction
in which the shareholder or warrant holder is a tax resident or in which its members are resident if it is a tax transparent entity (or
may otherwise result in adverse tax consequences). We do not intend to make any cash distributions to shareholders or warrant holders
to pay such taxes. Shareholders or warrant holders may be subject to withholding taxes or other taxes with respect to their ownership
of our ordinary shares or warrants after the reincorporation.

The 1% U.S. federal excise tax on stock buybacks could be imposed on redemptions of our stock if we were to become a “covered corporation” in the future.

On August 16, 2022, President
Biden signed into law the Inflation Reduction Act of 2022, which, among other things, generally imposes a 1% U.S. federal excise tax
(the “Excise Tax”) on certain repurchases of stock by “covered corporations” (which include publicly traded domestic
(i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded foreign (i.e., non-U.S.) corporations) occurring on or
after January 1, 2023. The Excise Tax is imposed on the repurchasing corporation itself, not its holders from which the stock is
repurchased. The amount of the Excise Tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase.
However, for purposes of calculating the Excise Tax, repurchasing corporations are permitted to net the fair market value of certain
new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions
apply to the Excise Tax. The U.S. Department of the Treasury (the “Treasury”) has authority to provide regulations and other
guidance to carry out, and prevent the abuse or avoidance of the Excise Tax. On April 12, 2024, the Treasury published proposed
Treasury regulations addressing the Excise Tax. Such proposed Treasury regulations clarify many aspects of the Excise Tax, although the
interpretation and operation of certain other aspects of the Excise Tax remain unclear. Although these proposed Treasury regulations
are not final, taxpayers generally may rely on them until final Treasury regulations are issued. However, there can be no assurance that
final Treasury regulations will not adversely affect the accuracy of the below description of the Excise Tax