Company: MKDWW
Filing Date: 2025-04-03
Form Type: 20-F
Source: 0001641172-25-002607
Chunk: 115

Company: MKDWELL Tech Inc.
Filing Date: 2025-04-03
Form: 20-F
Item: Item 10
Chunk 115
---
 a QEF election, a U. S. Holder must receive a PFIC Annual Information Statement from us. However,
we do not intend to provide a PFIC Annual Information Statement for taxable years after the taxable year that includes the Business Combination,
which will preclude U. S. Holders from making or maintaining a QEF election.

If
a U. S. Holder has made a QEF election with respect to Ordinary Shares, and the excess distribution rules discussed above do not apply
to such shares (because of a timely QEF election or a purge of the PFIC taint pursuant to a purging election, as described above), any
gain recognized on the sale of the Ordinary Shares generally will be taxable as capital gain and no additional tax charge will be imposed
under the PFIC rules. As discussed above, if we are a PFIC for any taxable year, a U. S. Holder of Ordinary Shares that has made a QEF
election will be currently taxed on its pro rata share of our earnings and profits, whether or not distributed for such year. A subsequent
distribution of such earnings and profits that were previously included in income generally should not be taxable when distributed to
such U. S. Holder. The tax basis of a U. S. Holder’s shares in an entity for which a QEF election has been made will be increased
by amounts that are included in income, and decreased by amounts distributed but not taxed as dividends, under the above rules. In addition,
if we are not a PFIC for any taxable year, such U. S. Holder will not be subject to the QEF inclusion regime with respect to the Ordinary
Shares for such taxable year.

  68  

Alternatively,
if we are a PFIC and the Ordinary Shares constitute “marketable stock,” a U. S. Holder may avoid the adverse PFIC tax consequences
discussed above if such U. S. Holder, at the close of the first taxable year in which we are a PFIC and it holds (or is deemed to hold)
the Ordinary Shares, makes a mark-to-market election with respect to such shares for such taxable year. Such U. S. Holder generally will
include for each of its taxable years as ordinary income the excess, if any, of the fair market value of its Ordinary Shares at the end
of such year over its adjusted basis in its Ordinary Shares. The U. S. Holder also will recognize an ordinary loss in respect of the excess,
if any, of its adjusted