Company: DSX-PB
Filing Date: 2025-03-21
Form Type: 20-F
Source: 0001562762-25-000050
Chunk: 55

Company: DIANA SHIPPING INC.
Filing Date: 2025-03-21
Form: 20-F
Item: Item 3
Chunk 55
---

are

held

for

the

production

of

those

types

of

“passive

income.”

For

purposes

of

these

tests,

“passive

income” includes

dividends, interest,

gains from

the sale

or exchange

of investment

property,

and rents

and royalties

other than rents

and royalties which

are received

from unrelated parties

in connection with

the

active

conduct

of

a

trade

or

business.

For

purposes

of

these

tests,

income

derived

from

the

performance of services does not constitute “passive income.” U. S. shareholders of a PFIC are subject to

a disadvantageous

U. S. federal

income tax

regime with

respect to

the income

derived by

the PFIC,

the

distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition

of their shares in the PFIC.

Based on

our current

and proposed

method of

operation, we

do not

believe that

we will

be a

PFIC with

respect to any taxable

year. In this regard, we intend

to treat the gross income

we derive or are

deemed to

derive from

our time

chartering activities

as services

income, rather

than rental

income. Accordingly,

we

believe that

our income

from our

time chartering activities

does not

constitute “passive

income,” and the

assets that we own and operate in connection with

the production of that income do not constitute assets

that produce or are held for the production of “passive income”.

34

There

is

substantial

legal

authority

supporting

this

position

consisting

of

case

law

and

U. S.

Internal

Revenue Service, or “ IRS”, pronouncements concerning the characterization of income derived from time

charters and voyage charters as services income for other

tax purposes. However, it should be noted that

there

is

also

authority

which

characterizes

time

charter

income

as

rental

income

rather

than

services

income for other tax

purposes. Accordingly,

no assurance can be given

that the IRS or a

court of law will

accept this position, and there is a risk