Company: CPSS
Filing Date: 2025-11-24
Form Type: 424B2
Source: 0001683168-25-008655
Chunk: 58

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-11-24
Form: 424B2
Chunk 58
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notes who do not include OID in income currently will generally be taxed on stated interest at the time it is received and will treat
any gain realized on the disposition of a short-term note as ordinary income to the extent of the accrued OID generally reduced by any
prior payments of interest. In addition, these cash method holders will be required to defer deductions for certain interest paid on indebtedness
related to purchasing or carrying the short-term notes until the OID is included in the holder’s income.

There are also some situations
in which a cash basis holder of a note having a term of more than one year may have taxable interest income with respect to a note before
any cash payment is received with respect to the note. If you report income on the cash method and you hold a note with a term longer
than one year that pays interest only at maturity, you generally will be required to include OID accrued during the original term (without
regard to renewals) as ordinary gross income as the OID accrues. OID accrues under a constant yield method, as described above.

Treatment of Dispositions of Notes

Upon the sale, exchange,
retirement or other taxable disposition of a note, you will recognize gain or loss in an amount equal to the difference between the amount
realized on the disposition and your adjusted tax basis in the note. Your adjusted tax basis of a note generally will equal your original
cost for the note, increased by any accrued but unpaid interest (including OID) you previously included in income with respect to the
note and reduced by any principal payments you previously received with respect to the note. Any gain or loss will be capital gain or
loss, except for gain representing accrued interest not previously included in your income. This capital gain or loss will be short-term
or long-term capital gain or loss, depending on whether the note had been held for more than one year or for one year or less.

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Non-U.S. Holders

Generally, if you are a nonresident
alien individual or a non-U.S. corporation and do not hold the note in connection with a United States trade or business, interest paid
and OID accrued on the notes will be treated as “portfolio interest” and therefore will be exempt from a 30% United States
withholding tax. In that case, you will be entitled to receive interest payments on the notes free of United States federal income tax
provided that you periodically provide a statement on applicable IRS forms certifying under penalty of perjury that you are