Company: DEFI
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001999371-25-011381
Chunk: 3

Company: Tidal Commodities Trust I
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 8
Chunk 3
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options with respect to commodities and, provided the partnership is a trader or investor with respect to such assets, swaps
and other notional principal contracts with respect to commodities. There is very limited authority on the U.S. federal
income tax treatment of bitcoin and no direct authority on bitcoin derivatives, such as Bitcoin Futures Contracts. Based on
an opinion received by Tidal from their independent legal counsel and a Commodity Futures Trading Commission determination
that treats bitcoin as a commodity under the Commodity Exchange Act, the Fund intends to take the position that bitcoin and
Bitcoin Futures Contracts consist of futures on commodities for purposes of the qualifying income exception under section
7704 of the Code. Accordingly, the Fund expects that at least 90% of the Fund’s gross income for each taxable year will
consist of qualifying income and that the Fund will be taxed as a partnership for U.S. federal income tax purposes.
Therefore, the Fund does not record a provision for income taxes because the shareholders report their share of the
Fund’s income or loss on their income tax returns.

The
Fund is required to determine whether a tax position is more likely than not to be sustained upon examination by the applicable
taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position.
The Fund will file income tax returns in the U.S. federal jurisdiction and may file income tax returns in various U.S. states
and foreign jurisdictions.

The
Fund may be subject to potential examination by U.S. federal, U.S. state, or foreign jurisdictional authorities in the area of
income taxes. These potential examinations may include among other things questioning the tax classification of the Fund, the
timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance with U.S. federal, U.S. state
and foreign tax laws.

Creation
and Redemptions

Authorized
Purchasers may purchase Creation Baskets consisting of 10,000 Shares from the Fund. The amount of the proceeds required
to purchase a Creation Basket will be equal to the NAV of the Shares in the Creation Basket determined as of 4:00 p.m. (ET) on
the day the order to create the basket is received in good order.

Authorized
Purchasers may redeem Shares from the Fund only in blocks of 10,000 Shares called “Redemption Baskets.” The
amount of the redemption proceeds for a Redemption Basket will be equal to the NAV of the Shares in the Redemption Basket