Company: DEFI
Filing Date: 2025-02-21
Form Type: POS AM
Source: 0001839882-25-010345
Chunk: 189

Company: Tidal Commodities Trust I
Filing Date: 2025-02-21
Form: POS AM
Chunk 189
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 commodities for purposes of the qualifying income exception under section 7704 of the Code. Based on the opinion of KLG and a CFTC determination that treats bitcoin as a commodity under the CEA, the Fund intends to take the position that bitcoin qualify as commodities and Bitcoin Futures Contracts consist of futures on commodities for purposes of the qualifying income exception under section 7704 of the Code. Shareholders should be aware that the Fund’s position is not binding on the IRS, and no assurance can be given that the IRS will not challenge the Fund’s position, or that the IRS or a court will not ultimately reach a contrary conclusion, which would result in the material adverse consequences to Shareholders and the Fund discussed below.

The Trust and the Sponsor represented the following to KLG:

| ● | assuming                                                                                       
 bitcoin qualify as commodities and Bitcoin Futures Contracts consist of futures on commodities 
 for purposes of the qualifying income exception under section 7704(d) of the Code, at          
 least 90% of the Fund’s gross income for each taxable year will constitute “qualifying         
 income” within the meaning of Code section 7704 (as described above);                          |

| ● | the                                                                                   
 Fund is organized and will be operated in accordance with its governing documents and 
 applicable law; and                                                                   |

| ● | the                                                                                  
 Fund has not elected, and will not elect, to be classified as a corporation for U.S. 
 federal income tax purposes.                                                         |

Based in part on these representations, KLG is of the opinion that the Fund more likely than not will be treated as a partnership that it is not taxable as a corporation for U.S. federal income tax purposes. The Fund’s taxation as a partnership rather than a corporation will require the Sponsor to conduct the Fund’s business activities in such a manner that it satisfies the requirements of the qualifying income exception on a continuing basis. No assurances can be given that the Fund’s operations for any given year will produce income that satisfies these requirements. KLG will not review the Fund’s ongoing compliance with these requirements and will have no obligation to advise the Trust, the Fund or the Fund’s Shareholders in the event of any subsequent change in the facts, representations or applicable law relied upon in reaching its opinion.

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If the Fund failed to satisfy the qualifying income exception in any year, other than a failure that is determined by the IRS to be inadvertent and that is cured within a reasonable time after discovery (in which case, as a condition of relief,