Company: MMTIF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0001062993-25-003888
Chunk: 57

Company: MICROMEM TECHNOLOGIES INC
Filing Date: 2025-02-28
Form: 20-F
Item: Item 10
Chunk 57
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 that is a corporation. Deductions for capital losses are subject to significant limitations under the Code.

Additional Tax Considerations

Receipt of Foreign Currency

The amount of any distribution paid to a U. S. Holder in foreign currency or on the sale, exchange or other taxable disposition of our common shares generally will be equal to the U. S. dollar value of such foreign currency based on the exchange rate applicable on the date of receipt or, if applicable, the date of settlement if the common shares are traded on an established securities market (regardless of whether such foreign currency is converted into U. S. dollars at that time). If the foreign currency received is not converted into U. S. dollars on the date of receipt, a U. S. Holder will have a tax basis in the foreign currency equal to its U. S. dollar value on the date of receipt. Any U. S. Holder who receives payment in foreign currency and engages in a subsequent conversion or other disposition of the foreign currency may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss, and generally will be U. S. source income or loss for foreign tax credit purposes. Different rules apply to U. S. Holders who use the accrual method of tax accounting. Each U. S. Holder should consult its own U. S. tax advisor regarding the U. S. federal income tax consequences of receiving, owning, and disposing of foreign currency.

Foreign Tax Credit

Dividends paid on our common shares will be treated as foreign-source income, and generally will be treated as "passive category income" or "general category income" for U. S. foreign tax credit purposes. Any gain or loss recognized on a sale or other disposition of Common Shares generally will be United States source gain or loss. Certain U. S. Holders that are eligible for the benefits of the Treaty may elect to treat such gain or loss as Canadian source gain or loss for U. S. foreign tax credit purposes. The Code applies various complex limitations on the amount of foreign taxes that may be claimed as a credit by U. S. taxpayers. In addition, Treasury Regulations that apply to taxes paid or accrued (the "Foreign Tax Credit Regulations") impose additional requirements for Canadian withholding taxes to be eligible for a foreign tax credit, and there can be no assurance that those requirements will be satisfied. The Treasury Department has released guidance temporarily pausing the application of certain of the Foreign Tax Credit Regulations.

Subject to the PFIC rules and the Foreign Tax