Company: UP
Filing Date: 2025-03-11
Form Type: 10-K
Source: 0001819516-25-000012
Chunk: 310

Company: Wheels Up Experience Inc.
Filing Date: 2025-03-11
Form: 10-K
Item: Item 8
Chunk 310
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 The $75.2 million increase in valuation allowance was the result of a charge to deferred tax benefit of $144.8 million from operations and a $69.6 million expense to additional paid in capital.We currently expect the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested. Accordingly, the Company has not provided the tax effect, if any, of limited outside basis differences of its foreign 

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subsidiaries. If these foreign earnings are repatriated to the U.S., or if the Company determines that such earnings are repatriated to the U.S. or if the Company determines that such earnings will be remitted in a future period, additional tax provisions may be required.Additionally, the Company is subject to the income tax effects associated with the Global Intangible Low-Taxed Income (GILTI) provisions. We have elected to recognize GILTI income in the period it arises and do not recognize deferred taxes for basis difference that may reverse in future years. Section 382 TransactionIn general, under Section 382 of the Internal Revenue Code of 1986 (as amended, the “Code”), a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change net operating losses or tax credits to offset future taxable income or taxes.  As a result of the Initial Issuance, the Company experienced an ownership change for the purpose of Section 382 of the Code during the third quarter of 2023, that will limit the availability of our tax attributes to offset future income. Our net operating losses and tax attributes are currently subject to a full valuation allowance. Accordingly, we do not believe it will have a material impact on our consolidated financial statements.Uncertain Tax PositionsThe Company is subject to tax in the U.S. and various foreign jurisdictions in which we operate.  There were no reserves for uncertain tax positions as of December 31, 2024 and 2023. Additionally, although WUP is treated as a partnership for U.S. federal and state income taxes purposes, it is still required to file annual federal, state and local income tax returns, which are subject to examination by the taxing authorities. The statute of limitations is generally open for years beginning after 2020 for U.S. federal and state jurisdictions for WUP.  OECD Pillar TwoThe organization for Economic Co-operation and Development has issued Pillar Two model rules introducing a new global minimum tax of 15% intended to be effective on January 1, 2024.