Company: CPSS
Filing Date: 2025-03-26
Form Type: 424B2
Source: 0001683168-25-001896
Chunk: 57

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-03-26
Form: 424B2
Chunk 57
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 Internal Revenue Code of 1986, as amended, regulations issued under the Internal
Revenue Code and judicial or ruling authority, all of which are subject to change that may be applied retroactively. The discussion assumes
that the notes will be characterized as debt for federal income tax purposes. In addition, the discussion assumes that the notes are held
as capital assets and does not discuss the federal income tax consequences applicable to all categories of investors, some of which may
be subject to special rules such as banks, tax-exempt organizations, insurance companies, dealers in securities or currencies, persons
that will hold notes as a position in a hedging, straddle or conversion transactions, or persons that have a functional currency other
than the U.S. dollar. If a partnership holds notes, the tax treatment of a partner will generally depend on the status of the partner
and on the activities of the partnership. In addition, the discussion does not deal with holders other than original purchasers. You are
urged to consult your own tax advisor to determine the specific federal, state, local and any other tax consequences applicable to you
relating to your ownership and disposition of the notes.

Interest Income on the Notes

Subject to the discussion
below applicable to “non-U.S. holders,” interest paid on the notes will generally be taxable to you as ordinary income as
the income is paid if you are a cash method taxpayer or as the income accrues if you are an accrual method taxpayer.

However, a note with a term
of one year or less, which we refer to in this discussion as a “short-term note,” will be treated as having been issued with
original issue discount or “OID” for tax purposes equal to the total payments on the note over its issue price. If you are
a cash method holder of a short-term note you are not required to include this OID as income currently unless you elect to do so. Cash
method holders who make that election and accrual method holders of short-term notes are generally required to recognize the OID in income
currently as it accrues on a straight-line basis unless the holder elects to accrue the OID under a constant yield method. Under a constant
yield method, you generally would be required to include in income increasingly greater amounts of OID in successive accrual periods.

Cash method holders of short-term
notes who do not include OID in income currently will generally be taxed on stated interest at the time it is received and will treat
any gain realized on the disposition of a