Company: NKLR
Filing Date: 2025-09-03
Form Type: S-4/A
Source: 0001213900-25-084087
Chunk: 236

Company: Terra Innovatum Global N.V.
Filing Date: 2025-09-03
Form: S-4/A
Chunk 236
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 will be reported as ordinary dividend income. U.S. holders should consult their own tax advisors with respect to the appropriate U.S. federal income tax treatment of any distribution received from GSR III. Passive Foreign Investment Company Rules InG eneral A non -U.S. corporation, such as GSR III, will be a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes in any taxable year in which, after applying relevant look -throughrules with respect to the income and assets of its subsidiaries, either (i) 75% or more of its gross income is passive income, or (ii) 50% or more of the value of its assets (generally based on the quarterly average of the value of its assets during such year) is attributable to assets, including cash, that produce passive income or are held for the production of passive income. Passive income generally includes dividends, interest, certain royalties and rents, annuities, net gains from the sale or exchange of property producing such income and net foreign currency gains. The determination of whether a foreign corporation is a PFIC is made annually. Pursuant to a “startup exception,” a foreign corporation will not be a PFIC for the first taxable year the foreign corporation has gross income (the “startup year”) if (1) no predecessor of the foreign corporation was a PFIC; (2) the foreign corporation satisfies the IRS that it will not be a PFIC for either of the first two taxable years following the startup year; and (3) the foreign corporation is not in fact a PFIC for either of those years. Because GSR III is a blank check company, with no current active business, based upon the composition of its income and assets, and taking into account the structure of the Business Combination, GSR III is not expected to be eligible for the startup exception, and thus GSR III is expected to be a PFIC for the taxable years ending in 2024 and 2025. If GSR III were a PFIC in any year during which a U.S. holder owns GSR III Class A Ordinary Shares, subject to the discussion below regarding the mark -to -marketor qualified electing fund (“QEF”) elections, a U.S. holder generally will be subject to special rules (regardless of whether GSR III continues to be a PFIC) with respect to (i) any “excess distribution” (generally, any distributions received by a U.S. holder on its GSR III Class