Company: DSWL
Filing Date: 2025-07-29
Form Type: 20-F
Source: 0001174947-25-001096
Chunk: 108

Company: DESWELL INDUSTRIES INC
Filing Date: 2025-07-29
Form: 20-F
Item: Item 10
Chunk 108
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 fair market value of our common shares over your adjusted tax basis in such common shares as of the end of each year. This “mark-to-market” election generally enables a U. S. Holder to avoid the deferred tax amount or interest charge that would otherwise be imposed on them if we were to be classified as a PFIC. However, if we are a PFIC, a mark-to-marketelection would not be available with respect to stock of a Subsidiary PFIC. You should consult your tax advisors as to the availability and desirability of a mark-to-marketelection, as well as the impact of such election on interests in any Subsidiary PFIC.

If we are treated as a PFIC at any time that you hold our shares but cease to be classified as a PFIC in a later year, we will continue to be classified as a PFIC with respect to you unless you make a deemed sale election in a timely manner to be taxed as if you sold your shares at their fair market value. In this case, you would pay tax on the gain on the deemed sale treated as ordinary income and an interest charge, and no loss will be allowed to you. If we subsequently become a PFIC, you will again be subject to the general PFIC rules discussed herein.

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If we are treated as a PFIC, each U. S. Holder will be required to make an annual return on IRS Form 8621 (unless an exception applies) or its successor, reporting, among other things, distributions received and gain realized with respect to each PFIC in which such holder holds a direct or indirect interest, and may be required to provide other information as specified by the IRS.

An actual determination of PFIC status is highly factual in nature. Given the complexity of the issues that may result if we are classified as or become a PFIC, you are urged to consult your own tax advisors with respect to the tax consequences to you, including any reporting obligations that may be imposed on you, in the event that this should occur, in view of your particular circumstances.

In addition, certain U. S. Holders that are individuals, estates and certain trusts whose income exceeds certain thresholds will be required to pay a 3.8% Medicare surtax on “net investment income” including interest, dividends and capital gains. U. S. Holders should consult with their own tax advisors regarding the effect, if any, of such tax on their ownership and disposition of our shares.

Non-U.