Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 187

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 10
Chunk 187
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 are held for the production of, or produce, passive income. Passive income
generally includes dividends, interest, rents and royalties (other than certain rents or royalties derived from the active conduct of
a trade or business) and gains from the disposition of passive assets.

Based on our current composition
and assets, we do not expect to be treated as a PFIC under the current PFIC rules. We must make a separate determination each year as
to whether we are a PFIC. As such, our PFIC status, will not be determinable until after the end of each taxable year. Accordingly, there
can be no assurance with respect to our status as a PFIC for our current taxable year or any future taxable year. Depending on the amount
of cash we raise in the IPO, together with any other assets held for the production of passive income, it is possible that, for our 2019
taxable year or for any subsequent taxable year, more than 50% of our assets may be assets held for the production of passive income.
We will make this determination following the end of any particular tax year. If we are determined to be a PFIC and a U. S. Holder did
not make either a timely qualified electing fund (or “ QEF”), election for our first taxable year as a PFIC in which the U. S.
Holder held (or was deemed to hold) Ordinary Shares, or a mark-to-market election, as described below, such holder generally will be subject
to special rules with respect to:

  any gain recognized by the U. S. Holder on the sale or other disposition of its Ordinary Shares; and  

  any “excess distribution” made to the U. S. Holder (generally, any distributions to such U. S. Holder during a taxable year of the U. S. Holder that are greater than 125% of the average annual ...  

Under these rules,

  the U. S. Holder’s gain or excess distribution will be allocated ratably over the U. S. Holder’s holding period for the Ordinary Shares;  

  the amount allocated to the U. S. Holder’s taxable year in which the U. S. Holder recognized the gain or received the excess distribution, or to the period in the U. S. Holder’s holding period ...  

  the amount allocated to other taxable years (or portions thereof) of the U. S. Holder and included in its holding period will be taxed at the highest tax rate in