Company: REE
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001628280-25-025661
Chunk: 145

Company: REE Automotive Ltd.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 10
Chunk 145
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 from a sale or disposition (including a pledge of Class A Ordinary Shares and under proposed regulations transfers of Warrants and certain transfers of Class A Ordinary Shares that would otherwise qualify as nonrecognition transactions for U. S. federal income tax purposes) of its Class A Ordinary Shares or Warrants (collectively the “ excess distribution rules”), unless, with respect to the Class A Ordinary Shares, the U. S. Holder makes a valid QEF or mark-to-market election as discussed below. Generally, distributions received by a U. S. Holder in a taxable year that are greater than 125% of the average annual distributions received by such U. S. Holder during the shorter of the three preceding taxable years or the portion of such U. S. Holder’s holding period for the Class A Ordinary Shares or Warrants that preceded the taxable year of the distribution will be treated as excess distributions. Under these special tax rules:

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

• 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 before the first day of REE’s first taxable year in which REE is a PFIC, will be treated as ordinary income; and

• the amount allocated to each other taxable year (or portions thereof) of the U. S. Holder and included in such holder’s holding period will be subject to the highest tax rate in effect for individuals or corporations, as applicable, for each such year without regard to the U. S. Holder’s other items of income and loss for such year;

Table of C ontents

• the interest charge generally applicable to underpayments of tax will be imposed on the U. S. Holder with respect to the resulting tax attributable to each such year.

Under the excess distribution rules, the tax liability for amounts allocated to taxable years prior to the year of disposition or excess distribution cannot be offset by any net operating losses, and gains (but not losses) realized on the sale of the Class A Ordinary Shares or Warrants cannot be treated as capital gains, even though the U. S. Holder holds the Class A Ordinary Shares or Warrants as capital assets.

Certain of the PFIC rules may impact U. S. Holders with respect to equity interests in subsidiaries and other entities which REE may hold, directly