Company: ILAG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001641172-25-006445
Chunk: 146

Company: Intelligent Living Application Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 146
---
 you receive
and any gain you realize from a sale or other disposition (including a pledge) of the ordinary shares, unless you make a “mark-to-market”
election as discussed below. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions
you received during the shorter of the three preceding taxable years or your holding period for the ordinary shares will be treated as
an excess distribution. Under these special tax rules:

  the excess distribution or gain will be allocated ratably over your holding period for the ordinary shares;                                                                                           
  the amount allocated to your current taxable year, and any amount allocated to any of your taxable year(s) prior to the first taxable year in which we were a PFIC, will be treated as ordinary i...  
  the amount allocated to each of your other taxable year(s) will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax w...  

The tax liability for amounts allocated to years prior
to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and gains
(but not losses) realized on the sale of the ordinary shares cannot be treated as capital, even if you hold the ordinary shares as capital
assets.

A U. S. Holder of “marketable stock” (as
defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the tax treatment discussed above. If you make
a mark-to-market election for first taxable year which you hold (or are deemed to hold) ordinary shares and for which we are determined
to be a PFIC, you will include in your income each year an amount equal to the excess, if any, of the fair market value of the ordinary
shares as of the close of such taxable year over your adjusted basis in such ordinary shares, which excess will be treated as ordinary
income and not capital gain. You are allowed an ordinary loss for the excess, if any, of the adjusted basis of the ordinary shares over
their fair market value as of the close of the taxable year. However, such ordinary loss is allowable only to the extent of any net mark-to-market
gains on the ordinary shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election,
as well as gain on the actual sale or other disposition of the ordinary shares, are treated as ordinary income. Ordinary loss