Company: CRAC
Filing Date: 2025-08-01
Form Type: S-1/A
Source: 0001213900-25-070728
Chunk: 278

Company: Crown Reserve Acquisition Corp. I
Filing Date: 2025-08-01
Form: S-1/A
Chunk 278
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 advisors as to the tax consequences of a redemption. If none of the foregoing tests are satisfied, then the redemption will be treated as a corporate distribution and the tax effects will be as described under “— Taxation of Distributions” above. After the application of those rules, any remaining tax basis a U.S. Holder has in the redeemed Class A ordinary shares will be added to the adjusted tax basis in such U.S. Holder’s remaining shares, or if it has none, to the U.S. Holder’s adjusted basis in its Share Rights or possibly in other shares constructively owned by it. A U.S. Holder should consult its own tax advisors as to the allocation of any remaining basis. Certain U.S. Holders may be subject to special reporting requirements with respect to a redemption of Class A ordinary shares, and U.S. Holders should consult with their own tax advisors with respect to their reporting requirements. Acquisition of Ordinary Shares Pursuant to Share Rights The U.S. federal income tax treatment of the Share Rights to acquire Class A ordinary shares is uncertain. The Share Right may be viewed as a forward contract, derivative security or similar interest in our Company (analogous to an option with no exercise price), and thus the holder of the Share Right would not be viewed as owning the Class A ordinary shares issuable pursuant to the Share Rights until such Class A ordinary shares are actually issued. There may be other alternative characterizations of the Share Rights that the IRS may successfully assert, including that the Share Rights are treated as equity in our Company at the time the Share Rights are issued. The tax consequences of an acquisition of our Class A ordinary shares pursuant to Share Rights are unclear and will depend on the U.S. federal income tax treatment of any initial business combination. Accordingly, U.S. Holders should consult their tax advisors regarding the tax consequences of an acquisition of Class A ordinary shares pursuant to Share Rights and the consequences of any initial business combination. Passive Foreign Investment Company Rules In general, a foreign (i.e., non -U.S.) corporation for U.S. federal income tax purposes will be classified as a PFIC if either (i) at least 75% of its gross income in a taxable year of the foreign corporation, including its pro rata share of the gross income of any corporation in which it is considered to own at least 25% of the shares by value, is passive income, or (ii) at least 50% of its assets in a taxable year, ordinarily determined based on fair market value and averaged