Company: GSRF
Filing Date: 2025-06-20
Form Type: DRS
Source: 0001213900-25-056174
Chunk: 271

Company: GSR IV Acquisition Corp.
Filing Date: 2025-06-20
Form: DRS
Chunk 271
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, a cashless conversion may be tax -deferred, either because the conversion is not a realization event or because the conversion is treated as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the Code. Although we expect a U.S. Holder’s cashless conversion of our rights (including after we provide notice of our intent to redeem rights for cash) to be treated as a recapitalization, a cashless conversion could alternatively be treated as a taxable exchange in which gain or loss would be recognized. In either tax -deferredsituation, a U.S. Holder’s tax basis in the ordinary shares received would generally equal the U.S. Holder’s tax basis in the rights. If a cashless conversion is not a realization event, it is unclear whether a U.S. Holder’s holding period for the ordinary shares would be treated as commencing on the date of conversion of the right or the day following the date of conversion of the right. If a cashless conversion is treated as a recapitalization, the holding period of the ordinary shares would include the holding period of the rights. If a cashless conversion is treated as a taxable exchange, a U.S. Holder could be deemed to have surrendered rights with an aggregate fair market value equal to the conversion price for the total number of rights to be conversion. Subject to the PFIC rules discussed below, the U.S. Holder would recognize capital gain or loss in an amount equal to the difference between the fair market value of the rights deemed surrendered and the U.S. Holder’s tax basis in such rights. In this case, a U.S. Holder’s tax basis in the ordinary shares received would equal the sum of the U.S. Holder’s initial investment in the rights converted (i.e. the portion of the U.S. Holder’s purchase price for the units that is allocated to the right, as described above under “— Allocation of Purchase Price and Characterization of a Unit”) and the conversion price of such rights. It is unclear whether a U.S. Holder’s holding period for the ordinary shares would commence on the date of conversion of the right or the day following the date of conversion of the right. Because of the absence of authority on the U.S. federal income tax treatment of a cashless conversion, there can be no assurance which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. Holders should consult their tax