Company: CGCT
Filing Date: 2025-03-05
Form Type: S-1/A
Source: 0001104659-25-020969
Chunk: 313

Company: Cartesian Growth Corp III
Filing Date: 2025-03-05
Form: S-1/A
Chunk 313
---
, at the
close of its taxable year, owns shares in a PFIC that are treated as marketable stock, the U.S. Holder may make a mark-to-market
election with respect to such shares for such taxable year. If the U.S. Holder makes a valid mark-to-market election for the first
taxable year of the U.S. Holder in which the U.S. Holder holds (or is deemed to hold) Class A ordinary shares in us and
for which we are determined to be a PFIC, such U.S. Holder generally will not be subject to the excess distribution rules described
above with respect to its Class A ordinary shares. Instead, in general, the U.S. Holder will include as ordinary income in
each taxable year the excess, if any, of the fair market value of its Class A ordinary shares at the end of its taxable year over
its adjusted basis in its Class A ordinary shares. These amounts of ordinary income would not be eligible for the favorable tax
rates applicable to qualified dividend income or long-term capital gains. The U.S. Holder also will recognize an ordinary loss in
respect of the excess, if any, of its adjusted basis in its Class A ordinary shares over the fair market value of its Class A
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 Class A ordinary shares will be adjusted to reflect any
such income or loss amounts, and any further gain recognized on a sale or other taxable disposition of its Class A ordinary shares
will be treated as ordinary income. Under current law, a mark-to-market election may not be made with respect to warrants.

The mark-to-market election is available only
for stock that is regularly traded on a national securities exchange that is registered with the SEC, including Nasdaq (on which we intend
to list the Class A ordinary shares), or on a foreign exchange or market that the IRS determines has rules sufficient to ensure
that the market price represents a legitimate and sound fair market value. If made, a mark-to-market election would be effective for
the taxable year for which the election was made and for all subsequent taxable years unless the Class A ordinary shares ceased
to qualify as “marketable stock” for purposes of the PFIC rules or the IRS consented to the revocation of the election.
U.S. Holders are urged to consult their own tax advisors