Company: FMST
Filing Date: 2025-06-20
Form Type: 20-F
Source: 0001171843-25-004004
Chunk: 171

Company: Foremost Clean Energy Ltd.
Filing Date: 2025-06-20
Form: 20-F
Item: Item 10
Chunk 171
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-Market Election is made and to each subsequent tax year, unless the common shares cease to be “marketable stock” or the IRS consents to revocation of such election. Each U. S. Holder should consult its own tax advisors regarding the availability of, and procedure for making, a Mark-to-Market Election.

Although a U. S. Holder may be eligible to make a Mark-to-Market Election with respect to the common shares, no such election may be made with respect to the stock of any Subsidiary PFIC that a U. S. Holder is treated as owning, because such stock is not marketable. Hence, the Mark-to-Market Election will not be effective to avoid the application of the default rules of Section 1291 of the Code described above with respect to deemed dispositions of Subsidiary PFIC stock or excess distributions from a Subsidiary PFIC to its shareholder.

Other PFIC Rules

Under Section 1291(f) of the Code, the IRS has issued proposed Treasury Regulations that, subject to certain exceptions, would cause a U. S. Holder that had not made a timely QEF Election to recognize gain (but not loss) upon certain transfers of common shares that would otherwise be tax-deferred (e. g., gifts and exchanges pursuant to corporate reorganizations). However, the specific U. S. federal income tax consequences to a U. S. Holder may vary based on the manner in which common shares are transferred.

Certain additional adverse rules may apply with respect to a U. S. Holder if we are a PFIC, regardless of whether such U. S. Holder makes a QEF Election. For example, under Section 1298(b)(6) of the Code, a U. S. Holder that uses common shares as security for a loan will, except as may be provided in Treasury Regulations, be treated as having made a taxable disposition of such common shares.

In addition, a U. S. Holder who acquires common shares from a decedent will not receive a “step up” in tax basis of such common shares to fair market value unless such decedent had a timely and effective QEF Election in place.

Special rules also apply to the amount of foreign tax credit that a U. S. Holder may claim on a distribution from a PFIC. Subject to such special rules, foreign taxes paid with respect to any distribution in respect of stock in a PFIC are generally eligible for the foreign tax credit. The rules relating to