Company: KG
Filing Date: 2025-03-10
Form Type: S-4
Source: 0001104659-25-021993
Chunk: 172

Company: Kestrel Group Ltd
Filing Date: 2025-03-10
Form: S-4
Chunk 172
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”) rules. However, if Maiden is classified as a PFIC for the taxable year that includes the combination or for a prior taxable year, dispositions of Maiden shares may be subject to the PFIC rules, as described below.

Definition of a PFIC

Under the Code, a foreign (i.e., non-U.S.) corporation is classified as a PFIC for any taxable year in which, after the application of certain “look-through” rules with respect to subsidiaries, (1) 75% or more of its gross income constitutes passive income or (2) 50% or more of its assets produce, or are held for the production of, passive income. For these purposes, passive income includes interest, dividends and other investment income, with certain exceptions.

While Maiden cannot express a definitive view about its PFIC status for the current taxable year or any prior taxable year, based on the composition of its income and valuation of its assets, the manner in which it conducts its business, relevant market data and its current expectations regarding the value and nature of its assets and the sources and nature of its income, Maiden does not expect that it will be a PFIC for the taxable year that includes the combination, and does not believe that it has been a PFIC in any prior taxable year. However, this is a fact-intensive inquiry made on an annual basis and no assurances can be provided regarding Maiden’s PFIC status for any taxable year. The U.S. Internal Revenue Service or courts may not agree with the methodology of Maiden’s PFIC determination, and Maiden’s status as a PFIC during the taxable year that includes the combination cannot be determined until the end of such taxable year. If Maiden is or was characterized as a PFIC for any taxable year during which a U.S. Holder holds or held Maiden shares, the following discussion regarding the disposition of PFIC shares may be relevant to such U.S. Holder.

Effects of the PFIC Rules

Pursuant to Section 1291(f) of the Code, to the extent provided in the Treasury Regulations, even if the combination qualifies as a transaction described in Section 351 of the Code, if Maiden was a PFIC for any taxable year during a U.S. Holder’s holding period for Maiden shares, certain U.S. federal income tax consequences, including recognition of gain, could potentially apply to such U.S. Holder as a result of the combination. At present, there are no final Treasury Regulations implementing Section 1291(f). The U.S. Treasury promulgated proposed regulations