Company: FMST
Filing Date: 2025-06-20
Form Type: 20-F
Source: 0001171843-25-004004
Chunk: 172

Company: Foremost Clean Energy Ltd.
Filing Date: 2025-06-20
Form: 20-F
Item: Item 10
Chunk 172
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 distributions by a PFIC and their eligibility for the foreign tax credit are complicated, and a U. S. Holder should consult with its own tax advisors regarding the availability of the foreign tax credit with respect to distributions by a PFIC.

The PFIC rules are complex, and each U. S. Holder should consult its own tax advisors regarding the PFIC rules and how the PFIC rules may affect the U. S. federal income tax consequences of the acquisition, ownership, and disposition of common shares.

Certain additional adverse rules may apply with respect to a U. S. Holder if we are a PFIC, regardless of whether the U. S. Holder makes a QEF Election. These rules include special rules that apply to the amount of foreign tax credit that a U. S. Holder may claim on a distribution from a PFIC. Subject to these special rules, foreign taxes paid with respect to any distribution in respect of stock in a PFIC are generally eligible for the foreign tax credit. U. S. Holders are urged to consult their own tax advisors regarding the potential application of the PFIC rules to the ownership and disposition of common shares, and the availability of certain U. S. tax elections under the PFIC rules.

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General Rules Applicable to the Ownership and Disposition of Common Shares

The following discussion is subject, in its entirety, to the rules described above under the heading “ Passive Foreign Investment Company Rules”.

Distributions on Common Shares

A U. S. Holder that receives a distribution, including a constructive distribution, with respect to a common share will be required to include the amount of such distribution in gross income as a dividend (without reduction for any Canadian income tax withheld from such distribution) to the extent of our current or accumulated “earnings and profits”, as computed for U. S. federal income tax purposes. A dividend generally will be taxed to a U. S. Holder at ordinary income tax rates if we are a PFIC for the tax year of such distribution or were a PFIC for the preceding tax year. To the extent that a distribution exceeds our current and accumulated “earnings and profits”, such distribution will be treated first as a tax-free return of capital to the extent of a U. S. Holder’s tax basis in the common shares and thereafter as gain from the sale or exchange of such common shares. (See “ Sale or Other Taxable Disposition of Common Shares” below). However, we do not intend to maintain the calculations of our earnings and profits in accordance with U.