Company: MKDWW
Filing Date: 2025-04-03
Form Type: 20-F
Source: 0001641172-25-002607
Chunk: 112

Company: MKDWELL Tech Inc.
Filing Date: 2025-04-03
Form: 20-F
Item: Item 10
Chunk 112
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 the Ordinary Shares and
(ii) the U. S. Holder’s adjusted tax basis in such Ordinary Shares, respectively. Long-term capital gain recognized by a non-corporate
U. S. Holder is generally eligible to be taxed at reduced rates. The deductibility of capital losses is subject to limitations.

In
the event we are deemed to be a PRC resident enterprise under the EIT Law and gain from the disposition of the Ordinary Shares is subject
to tax in PRC, a U. S. Holder that is eligible for the benefits of the United States-PRC income tax treaty may be able to elect to treat
such gain as PRC-source gain for foreign tax credit purposes under the United States-PRC income tax treaty. If a U. S. Holder is not eligible
for the benefits of the United States-PRC income tax treaty or fails to treat any such gain as PRC-source, then such U. S. Holder would
generally not be able to use any foreign tax credit arising from any PRC tax imposed on the disposition of the Ordinary Shares unless
such credit can be applied (subject to applicable limitations) against U. S. federal income tax due on other income derived from foreign
sources in the same income category (generally, the passive category).

Passive
foreign investment company rules

The
treatment of U. S. Holders of Ordinary Shares could be materially different from that described above if we are or were treated as a passive
foreign investment company (“ PFIC”) for U. S. federal income tax purposes.

A
non-U. S. corporation will be classified as a PFIC for U. S. federal income tax purposes if either (i) at least 75% of its gross income
in a taxable year, including its pro rata share of the gross income of any corporation in which it is considered to own at least 25%
of the shares by value, is passive income or (ii) at least 50% of its assets in a taxable year (ordinarily determined based on fair market
value and averaged quarterly over the year), including its pro rata share of the assets of any corporation in which it is considered
to own at least 25% of the shares by value, are held for the production of, or produce, passive income. Passive income generally includes
dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains
from