Company: CGCT
Filing Date: 2025-03-21
Form Type: S-1/A
Source: 0001104659-25-026623
Chunk: 314

Company: Cartesian Growth Corp III
Filing Date: 2025-03-21
Form: S-1/A
Chunk 314
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 a U.S. Holder of warrants would be treated as if such U.S. Holder had received a cash distribution from us generally equal
to the fair market value of such increased interest (taxed as described above under “— Taxation of Distributions”)
and generally would increase the U.S. Holder’s adjusted tax basis in its warrants to the extent that such distribution is
treated as a dividend.

Passive Foreign Investment Company Rules

A foreign (i.e., non-U.S.) corporation will be
classified as a PFIC for United States federal income tax purposes if either (i) at least 75% of its gross income in a taxable
year, 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 quarterly over the year), including its pro rata share of the assets of any corporation in which it is considered to own
at least 25% of the shares by value, are held for the production of, or produce, passive income. Passive income generally includes, among
other things, dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business)
and gains from the disposition of assets giving rise to passive income.

Because we are a blank check company, with no current active business, we believe that it is likely that we will meet the PFIC asset or income test for our current taxable year. However, pursuant to a startup exception, a corporation will not be a PFIC for the first taxable year in which the corporation has gross income (the “startup year”), if (i) no predecessor of the corporation was a PFIC; (ii) the corporation satisfies the IRS that it will not be a PFIC for either of the first two taxable years following the startup year; and (iii) the corporation is not in fact a PFIC for either of those years. The applicability of the startup exception to us is uncertain and will not be known until after the close of our current taxable year and, perhaps, until after the end of our two taxable years following our startup year.Depending upon the structure and domicile of a company we acquire in a business combination, it is possible that our taxable year may close at approximately the same time as the closing date, which would result in a short taxable