Company: DEFI
Filing Date: 2025-11-04
Form Type: POS AM
Source: 0001999371-25-016766
Chunk: 146

Company: Tidal Commodities Trust I
Filing Date: 2025-11-04
Form: POS AM
Chunk 146
---
 income” under the passive loss rules but not, absent an election, long-term capital gains or certain qualifying dividend income) less deductible expenses other than interest directly connected with the production of investment income. If the Fund incurs indebtedness that is treated as allocable to a trade or business, the Fund’s ability to deduct interest on such indebtedness allocable generally is limited to an amount equal to the sum of (1) the Fund’s business interest income during the year and (2) 30% of the Fund’s adjusted taxable income for such taxable year. If the Fund is not entitled to fully deduct its business interest in any taxable year, such excess business interest expense will be allocated to each Shareholder as excess business interest and can be carried forward by the Shareholder to successive taxable years and used to offset any excess taxable income allocated by the Fund to such Shareholder. Any excess business interest expense allocated to a Shareholder will reduce such Shareholder’s adjusted tax basis in its Shares in the year of the allocation even if the expense does not give rise to a deduction to the Shareholder in that year. Immediately prior to a Shareholder’s disposition of its Shares, the Shareholder’s adjusted tax basis will be increased by the amount by which such basis reduction exceeds the excess interest expense that has been deducted by such Shareholder. To the extent that the Fund allocates losses or expenses to a Shareholder that must be deferred or are disallowed as a result of these or other limitations in the Code, the Treasury Regulations thereunder, or other U.S. federal income tax authorities, the Shareholder may be taxed on income in excess of its economic income or distributions (if any) on its Shares. As one example, the Shareholder could be allocated and required to pay tax on its share of interest income accrued by the Fund for a particular taxable year, and in the same year be allocated a share of a capital loss that it cannot deduct currently because of the limitations discussed above. As another example, the Shareholder could be allocated and required to pay tax on its share of interest income and capital gain for a year but be unable to deduct some or all of its share of management fees and/or margin account interest incurred by the Shareholder with respect to its Shares. Shareholders are urged to consult their own tax advisors regarding the effect of limitations under the Code, Treasury Regulations, and other U.S. federal income tax authorities on their ability to deduct their allocable share of the Fund’s losses and expenses. 120 Tax Basis of Shares A Shareholder