Company: TDBCP
Filing Date: 2025-03-04
Form Type: 424B3
Source: 0001140361-25-006811
Chunk: 51

Company: TORONTO DOMINION BANK
Filing Date: 2025-03-04
Form: 424B3
Chunk 51
---
 depending on the precise terms of a particular offering of ARNs that reference an Underlying Fund, PFIC, REIT or other “pass-thru entity”, there may be substantial risk that an investment in such ARNs would be treated as a “constructive ownership transaction” and that all or a portion of any long-term capital gain recognized with respect to such ARNs could be recharacterized as ordinary income and subject to an interest charge (or, in the case of an pass-thru entity containing gold and/or silver, subject to a special 28% maximum rate that is applicable to “collectibles”). If such treatment applies, it is not clear to what extent any long-term capital gain recognized by a U.S. holder in respect of the ARNs would be recharacterized as ordinary income and subject to the interest charge described above, in part because it is not clear how the “net underlying long-term capital gain” would be computed in respect of the ARNs. It is possible, for example, that the net underlying long-term capital gain could equal the amount of long-term capital gain a U.S. holder would have recognized if on the issue date of the ARNs the holder had invested an allocable portion of the face amount of the ARNs in shares of the pass-thru entity and sold those shares for their fair market value on the date the ARNs are sold, exchanged or retired. However, it is also possible that because the U.S. holder does not share in distributions made on the pass-through entity, these distributions could be excluded from the calculation of the amount and character of gain, if any, that would have been realized had the U.S. holder held the pass-through entity directly, so that the application of constructive ownership rules may not recharacterize adversely a significant portion of the long-term capital gain the U.S. holder may recognize with respect to the ARNs. All or a portion of the gain with respect to the ARNs could be treated as “Excess Gain” if, for example, where a pass-thru entity is the sole Market Measure, the “net underlying long-term capital gain” could equal the amount of long-term capital gain a U.S. holder would have recognized if on the issue date of the ARNs the holder had invested the principal amount of the ARNs in shares of the Market Measure that is treated as a “pass-thru entity” and sold those shares for their fair market value on the date of a taxable disposition of the ARNs. In addition, all or a