Company: QSEA
Filing Date: 2025-03-12
Form Type: S-1/A
Source: 0001829126-25-001750
Chunk: 238

Company: Quartzsea Acquisition Corp
Filing Date: 2025-03-12
Form: S-1/A
Chunk 238
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 U.S. Holder has made a QEF election with respect
to our ordinary share, and the excess distribution rules discussed above do not apply to such shares (because of a timely QEF election
for our first taxable year as a PFIC in which the U.S. Holder holds (or is deemed to hold) such shares or a purge of the PFIC taint pursuant
to a purging election, as described above), any gain recognized on the sale of our ordinary shares generally will be taxable as capital
gain and no additional tax charge will be imposed under the PFIC rules. As discussed above, if we are a PFIC for any taxable year, a
U.S. Holder of our ordinary shares that has made a QEF election will be currently taxed on its pro rata share of our earnings and profits,
whether or not distributed for such year. A subsequent distribution of such earnings and profits that were previously included in income
generally should not be taxable when distributed to such U.S. Holder. The tax basis of a U.S. Holder’s shares in a QEF will be
increased by amounts that are included in income, and decreased by amounts distributed but not taxed as dividends, under the above rules.
In addition, if we are not a PFIC for any taxable year, such U.S. Holder will not be subject to the QEF inclusion regime with respect
to our ordinary shares for such a taxable year.

If we are a PFIC and our ordinary shares constitute
“marketable stock,” a U.S. Holder may avoid the adverse PFIC tax consequences discussed above if such U.S. Holder, at the
close of the first taxable year in which it holds (or is deemed to hold) our ordinary shares, makes a mark-to-market election with respect
to such shares for such taxable year. Such U.S. Holder generally will include for each of its taxable years as ordinary income the excess,
if any, of the fair market value of its ordinary shares at the end of such year over its adjusted basis in its ordinary shares. The U.S.
Holder also will recognize an ordinary loss in respect of the excess, if any, of its adjusted basis of its ordinary shares over the fair
market value of its ordinary shares at the end of its taxable year (but only to the extent of the net amount of previously included income
as a result of the mark-to-market election). The U.S. Holder’s basis in its ordinary shares will be adjusted to reflect any such
income or loss amounts