Company: XCH
Filing Date: 2025-04-23
Form Type: 20-F
Source: 0000950170-25-056976
Chunk: 169

Company: XCHG Ltd
Filing Date: 2025-04-23
Form: 20-F
Item: Item 10
Chunk 169
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IC status, in which case any gain on the deemed sale will be taxed under the PFIC rules described above. U. S. Holders should consult their tax advisers regarding the advisability of making this election.

Alternatively, if we are a PFIC for any taxable year and if the ADSs are “regularly traded” on the Nasdaq, a U. S. Holder of ADSs may make a mark-to-market election that will result in tax treatment different from the general tax treatment for PFICs described in the preceding paragraph. The ADSs will be treated as “regularly traded” for any calendar year in which more than a de minimis quantity of the ADSs is traded on the Nasdaq on at least 15 days during each calendar quarter. If a U. S. Holder of ADSs makes the mark-to-market election, for each taxable year that we are a PFIC, the U. S. Holder generally will recognize as ordinary income any excess of the fair market value of the ADSs at the end of such U. S. Holder’s taxable year over their adjusted tax basis, and will recognize an ordinary loss in respect of any excess of the adjusted tax basis of the ADSs over their fair market value at the end of such U. S. Holder’s taxable year, but only to the extent of the net amount of income previously included as a result of the mark-to-market election. If a U. S. Holder makes the election, the U. S. Holder’s tax basis in the ADSs will be adjusted to reflect the income or loss amounts recognized. Any gain recognized on the sale or other disposition of ADSs in a year in which we are a PFIC will be treated as ordinary income and any loss will be treated as an ordinary loss (but only to the extent of the net amount of income previously included as a result of the mark-to-market election, with any excess treated as capital loss). If a U. S. Holder makes the mark-to-market election, distributions paid on ADSs will be treated as discussed under “ - Taxation of Distributions” above (but subject to the discussion in the immediately subsequent paragraph). Once made, the election will remain in effect for all taxable years in which we are a PFIC, unless it is revoked with the IRS’s consent, or the ADSs cease to be regularly traded on a qualified exchange. U. S. Holders should consult their tax advisers regarding the availability and advisability of making a mark-to-market election in their particular circumstances