Company: CDAQF
Filing Date: 2025-03-25
Form Type: DEF 14A
Source: 0001641172-25-000430
Chunk: 77

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-03-25
Form: DEF 14A
Chunk 77
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 capital assets within the meaning of Section 1221 of the Code, which generally means as property held for investment and not as a dealer or for sale to customers in the ordinary course of the shareholder’s trade or business.

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WE URGE PUBLIC SHAREHOLDERS CONTEMPLATING EXERCISE OF THEIR REDEMPTION RIGHTS TO CONSULT THEIR TAX ADVISOR REGARDING THE U.S. FEDERAL, STATE, LOCAL, AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES THEREOF.

U.S. Federal Income Tax Considerations to U.S. Shareholders

This section is addressed to Redeeming U.S. Holders (as defined below) of our Public Shares that elect to have their Public Shares redeemed for cash as described in the sections of this Proxy Statement entitled “ Proposal One — The Third Extension Amendment Proposal — Redemption Rights” and “ Proposal Two — The Redemption Limitation Amendment Proposal — Redemption Rights”. For purposes of this discussion, a “ Redeeming U.S. Holder” is a Beneficial Owner that so redeems its shares and is:

| ● | a                                                                                                                                    
 citizen or resident of the United States;                                                                                            |
| ● | a                                                                                                                                    
 corporation (including an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under     
 the laws of the United States or any political subdivision thereof;                                                                  |
| ● | an                                                                                                                                   
 estate whose income is subject to U.S. federal income taxation regardless of its source; or                                          |
| ● | any                                                                                                                                  
 trust if (1) a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S. persons 
 have the authority to control all substantial decisions of the trust or (2) it has a valid election in place to be treated as a U.S. 
 person.                                                                                                                              |

Tax Treatment of the Redemption — In General

The balance of the discussion under this heading is subject in its entirety to the discussion under the heading of this section of the Proxy Statement entitled “— Passive Foreign Investment Company Rules.” If we are considered a “passive foreign investment company” for these purposes (which we will be, unless a “start up” exception applies), then the tax consequences of the redemption will be as outlined in that discussion, below.

A Redeeming U.S. Holder will generally recognize capital gain or loss equal to the difference between the amount realized on the redemption and such shareholder’s adjusted basis in the shares exchanged therefor if the Redeeming U.S.