Company: ZDAN
Filing Date: 2025-06-30
Form Type: F-1
Source: 0001683168-25-004840
Chunk: 263

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-06-30
Form: F-1
Chunk 263
---
 cease to be a PFIC. A “purging election”
creates a deemed sale of such Ordinary Shares at their fair market value on the last day of the last year in which we are treated as
a PFIC. The gain recognized by the purging election will be subject to the special tax and interest charge rules treating the gain
as an excess distribution, as described above. As a result of the purging election, you will have a new basis (equal to the fair market
value of the Ordinary Shares on the last day of the last year in which we are treated as a PFIC) and holding period (which new holding
period will begin the day after such last day) in your Ordinary 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.

| 163 |

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