Company: MMTIF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0001062993-25-003888
Chunk: 50

Company: MICROMEM TECHNOLOGIES INC
Filing Date: 2025-02-28
Form: 20-F
Item: Item 10
Chunk 50
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 an interest charge would be imposed on the tax liability for each such year, calculated as if such tax liability had been due in each such year. A Non-Electing U. S. Holder that is not a corporation must treat any such interest paid as "personal interest," which is not deductible.

If we are a PFIC for any tax year during which a Non-Electing U. S. Holder holds our common shares, we will continue to be treated as a PFIC with respect to such Non-Electing U. S. Holder, regardless of whether we cease to be a PFIC in one or more subsequent tax years. If we cease to be a PFIC, a Non-Electing U. S. Holder may terminate this deemed PFIC status with respect to our common shares by electing to recognize gain (which will be taxed under the rules of Section 1291 of the Code as discussed above) as if such common shares were sold on the last day of the last tax year for which we were a PFIC.

QEF Election

A U. S. Holder that makes a QEF Election for the first tax year in which its holding period of our common shares begins generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to our common shares. However, a U. S. Holder that makes a QEF Election will be subject to U. S. federal income tax on such U. S. Holder's pro rata share of (a) our net capital gain, which will be taxed as long-term capital gain to such U. S. Holder, and (b) our ordinary earnings, which will be taxed as ordinary income to such U. S. Holder. Generally, "net capital gain" is the excess of (a) net long-term capital gain over (b) net short-term capital loss, and "ordinary earnings" are the excess of (a) "earnings and profits" over (b) net capital gain. A U. S. Holder that makes a QEF Election will be subject to U. S. federal income tax on such amounts for each tax year in which we are a PFIC, regardless of whether such amounts are actually distributed to such U. S. Holder by us. However, for any tax year in which we are a PFIC and have no net income or gain, U. S. Holders that have made a QEF Election would not have any income inclusions as a result of the QEF