Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 186

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 10
Chunk 186
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 of the U. S.-PRC Tax Treaty.

Taxation on the Disposition of Ordinary
Shares

Upon a sale or other taxable
disposition of our Ordinary Shares, and subject to the PFIC rules discussed below, a U. S. Holder will recognize capital gain or loss in
an amount equal to the difference between the amount realized in U. S. dollars and the U. S. Holder’s adjusted tax basis in the Ordinary
Shares. Capital gains recognized by U. S. Holders generally are subject to U. S. federal income tax at the same rate as ordinary income,
except that long-term capital gains recognized by non-corporate U. S. Holders are generally subject to U. S. federal income tax at a maximum
rate of 20%. Capital gain or loss will constitute long-term capital gain or loss if the U. S. Holder’s holding period for the Ordinary
Shares exceeds one year. The deductibility of capital losses is subject to various limitations. If PRC taxes would otherwise apply to
any gain from the disposition of our Ordinary Shares by a U. S. Holder, such U. S. Holder may be entitled to a reduction in or elimination
of such taxes under the U. S.-PRC Tax Treaty. Any PRC taxes that are paid by a U. S. Holder with respect to such gain may be treated as
foreign taxes eligible for credit against such holder’s U. S. federal income tax liability (subject to certain limitations that could
reduce or eliminate the available tax credit). U. S. Holders should consult their own tax advisors regarding the creditability of any such
PRC tax and their eligibility for the benefits of the U. S.-PRC Tax Treaty.

Passive Foreign Investment Company Rules

A foreign (i. e., non-U. S.)
corporation will be a PFIC if at least 75% of its gross income in a taxable year of the foreign corporation, including its pro rata share
of the gross income of any corporation in which it is considered to own at least 25% of the shares by value, is passive income. Alternatively,
a foreign corporation will be a PFIC if at least 50% of its assets in a taxable year of the foreign corporation, ordinarily determined
based on fair market value and averaged quarterly over the year, including its pro rata share of the assets of any corporation in which
it is considered to own at least 25% of the shares by value,