Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 176

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 10
Chunk 176
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. The U. S. Holder’s adjusted tax basis in the Class A Ordinary Shares would be adjusted
to reflect any income or loss resulting from the mark-to-market election. If a U. S. Holder makes a mark-to-market election
in respect of a corporation classified as a PFIC and such corporation ceases to be classified as a PFIC, the U. S. Holder will not
be required to take into account the gain or loss described above during any period that such corporation is not classified as a PFIC. If
a U. S. Holder makes a mark-to-market election, any gain such U. S. Holder recognizes upon the sale or other disposition
of our Class A Ordinary Shares in a year when we are a PFIC will be treated as ordinary income and any loss will be treated as ordinary
loss, but such loss will only be treated as ordinary loss to the extent of the net amount previously included in income as a result of
the mark-to-market election.

Because a mark-to-market election
cannot be made for any lower-tier PFICs that we may own, a U. S. Holder may continue to be subject to the PFIC rules with respect
to such U. S. Holder’s indirect interest in any investments held by us that are treated as an equity interest in a PFIC for
U. S. federal income tax purposes.

Furthermore, as an alternative
to the foregoing rules, a U. S. Holder that owns stock of a PFIC generally may make a “qualified electing fund” election
regarding such corporation to elect out of the PFIC rules described above regarding excess distributions and recognized gains. However,
we do not intend to provide information necessary for U. S. Holders to make qualified electing fund elections which, if available,
would result in tax treatment different from the general tax treatment for PFICs described above.

If a U. S. Holder owns
our Class A Ordinary Shares during any taxable year that we are a PFIC, the U. S. Holder must generally file an annual Internal Revenue
Service Form 8621 and provide such other information as may be required by the U. S. Treasury Department, whether or not a mark-to-market election
is or has been made. If we are or become a PFIC, you should consult your tax advisor regarding any reporting requirements that may apply
to you.

You should consult your tax
advisors regarding how the PFIC rules apply to your investment in our Class A Ordinary