Company: OSOL
Filing Date: 2025-10-22
Form Type: S-1
Source: 0001493152-25-018952
Chunk: 167

Company: Osprey Solana Trust
Filing Date: 2025-10-22
Form: S-1
Chunk 167
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 abandon all Incidental Rights and IR Virtual Currency to which the Trust might otherwise become entitled. There can be no complete assurance that these abandonments will be treated as effective for U.S. federal income tax purposes. If the Trust were treated as owning any asset other than SOL as of any date on which it creates or redeems Shares, it might cease to qualify as a grantor trust for U.S. federal income tax purposes.

The Trust has historically and intends to continue to take the position that solely for U.S. federal income tax purposes, the amounts the Trust receives as part of the staking arrangement that are subsequently paid to the Sponsor is property and income of the Sponsor because the Trust has irrevocably abandoned all rights to any Staking Rewards that it may otherwise be entitled. Neither the Trust nor the Sponsor has received an opinion of counsel or a ruling from the IRS whether such arrangement will be respected for U.S. federal income tax purposes. Accordingly, there can be no assurance that this abandonment will be treated as effective for U.S. federal income tax purposes. If the IRS or the courts were to disagree with, and successfully challenge this position, the Trust might not qualify as a grantor trust for U.S. federal income tax purposes and the amounts of income and expenses reported to shareholders may not be correct. If the Trust were classified as a partnership for U.S. federal income tax purposes, the tax consequences of owning Shares generally would not be materially different from the tax consequences described herein, although there might be certain differences, including with respect to timing of the recognition of taxable income or loss. In addition, if the Staking Rewards are reclassified as earned by the Trust for federal income tax purposes, Non-U.S. holders may be subject to U.S. federal income tax filing requirements and U.S. federal income tax with respect to any Staking Rewards if the Trust is treated as engaged in a U.S. trade or business and income with respect to such rewards was treated as effectively connected income. Further, in such a situation, any U.S. Holders that are tax-exempt and subject to tax with respect to UBTI may be treated as realizing UBTI with respect to its share of any Staking Rewards. If the Trust was treated as a corporation for U.S. federal income tax purposes instead of being treated as a partnership for U.S. federal income tax purposes, the Trust would be treated as described below. Shareholders are urged to consult their tax advisers about the Trust’s position with respect to the Staking