Company: ZDAN
Filing Date: 2025-07-28
Form Type: F-1/A
Source: 0001683168-25-005450
Chunk: 261

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-07-28
Form: F-1/A
Chunk 261
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 Shares for tax purposes.

IRC Section 1014(a) provides
for a step-up in basis to the fair market value for our Ordinary Shares when inherited from a decedent that was previously a holder of
our Ordinary Shares. However, if we are determined to be a PFIC and a decedent that was a U.S. Holder did not make either a timely qualified
electing fund election for our first taxable year as a PFIC in which the U.S. Holder held (or was deemed to hold) our Ordinary Shares,
or a mark-to-market election and ownership of those Ordinary Shares are inherited, a special provision in IRC Section 1291(e) provides
that the new U.S. Holder’s basis should be reduced by an amount equal to the Section 1014 basis minus the decedent’s
adjusted basis just before death. As such, if we are determined to be a PFIC at any time prior to a decedent’s passing, the PFIC
rules will cause any new U.S. Holder that inherits our Ordinary Shares from a U.S. Holder to not get a step-up in basis under Section 1014
and instead will receive a carryover basis in those Ordinary Shares.

You are urged to consult
your tax advisors regarding the application of the PFIC rules to your investment in our Ordinary Shares and the elections discussed
above.

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Taxation of Dividends and Other Distributions on our Ordinary Shares

Subject to the PFIC rules discussed
above, the gross amount of distributions made by us to you with respect to the Ordinary Shares (including the amount of any taxes withheld
therefrom) will generally be includable in your gross income as dividend income on the date of receipt by you, but only to the extent
that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles).
With respect to corporate U.S. Holders, the dividends will not be eligible for the dividends-received deduction allowed to corporations
in respect of dividends received from other U.S. corporations.

With respect to non-corporate
U.S. Holders, including individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable to qualified dividend
income, provided that: (1) the Ordinary Shares are readily tradable on an established securities market in the United States, or
we are eligible for the benefits of an approved qualifying income tax treaty with the United States that includes an exchange