SEC Filing Document

Company: T. Rowe Price Active Crypto ETF
Ticker: 
CIK: 2089855
Filing Type: S-1
Document Type: S-1
Date Filed: 2025-10-22
Accession Number: 0001999371-25-015832
Exchange: 
SIC Code: 6221
SIC Description: Commodity Contracts Brokers & Dealers
URL: https://www.sec.gov/Archives/edgar/data/2089855/000199937125015832/activecrypto-s1_102225.htm

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interest income during the year and (2) 30% of the Fund’s adjusted taxable income for such taxable year. If the Fund is not entitled to fully deduct its business interest in any taxable year, such excess business interest expense will be allocated to each Shareholder as excess business interest and can be carried forward by the Shareholder to successive taxable years to offset any excess taxable income allocated by the Fund to such Shareholder. Any excess business interest expense allocated to a Shareholder will reduce such Shareholder’s basis in its Shares in the year of the allocation even if the expense does not give rise to a deduction to the Shareholder in that year. Immediately prior to a Shareholder’s disposition of its Shares, the Shareholder’s basis will be increased by the amount by which such basis reduction exceeds the excess business interest expense that has been deducted by such Shareholder.

To the extent that the Fund allocates losses or expenses to a U.S. Shareholder that must be deferred or are disallowed as a result of
these or other limitations in the Code, such U.S. Shareholder may be taxed on income in excess of the economic income or distributions
(if any) on such U.S. Shareholder's Shares. As one example, a U.S. Shareholder could be allocated and required to pay tax on such U.S.
Shareholder's share of interest income accrued by the Fund for a particular taxable year, and in the same year be allocated a share of
a capital loss that such U.S. Shareholder cannot deduct currently because such U.S. Shareholder has insufficient capital gains against
which to offset the loss. As another example, a U.S. Shareholder could be allocated and required to pay tax on such U.S. Shareholder's
share of interest income and capital gain for a year but be unable to deduct some or all of such U.S. Shareholder's share of management
fees and/or margin account interest incurred by such U.S. Shareholder with respect to such U.S. Shareholder's Shares. Shareholders are
urged to consult their own tax advisor regarding the effect of limitations under the Code on their ability to deduct their allocable share
of the Fund's losses and expenses.

Tax Basis of Shares

A Shareholder’s tax basis in
its Shares is important in determining (1) the amount of taxable gain or loss it will realize on the sale or other disposition of its
Shares, (2) the amount of non-taxable distributions that it may receive from the Fund, and (3) its ability to utilize its distributive
share of any losses of the Fund on its U.S. federal income tax return. A Shareholder’s initial tax basis of its Shares will equal
its cost for the Shares plus its share of the Fund’s liabilities (if any) at the time of purchase. In general, a Shareholder’s
“share” of those liabilities will equal the sum of (i) the entire amount of any otherwise nonrecourse liability of the Fund
as to which the Shareholder or certain affiliates of the Shareholder is the creditor (a “partner nonrecourse liability”) and
(ii) a pro rata share of any nonrecourse liabilities of the Fund that are not partner nonrecourse liabilities as to any Shareholder.

A Shareholder’s
tax basis in its Shares generally will be (1) increased by (a) its allocable share of the Fund’s taxable income and gain and
(b) any additional contributions by the Shareholder to the Fund and (2) decreased (but not below zero) by (a) its allocable share of
the Fund’s tax deductions and losses and (b) any distributions by the Fund to the Shareholder. For this purpose, an increase
in a Shareholder’s share of the Fund’s liabilities will be treated as a contribution of cash by the Shareholder to the
Fund and a decrease in that share will be treated as a distribution of cash by the Fund to the Shareholder. Pursuant to certain IRS
rulings, a Shareholder will be required to maintain a single, “unified” basis in all Shares that it owns. As a result,
when a Shareholder that acquired its Shares at different prices sells less than all of its Shares, such Shareholder will not be
entitled to specify particular Shares (e.g., those with a higher basis) as having been sold. Rather, such Shareholder must determine
its gain or loss on the sale by using an “equitable apportionment” method to allocate a portion of its unified basis in
its Shares to the Shares sold.

Treatment of Fund Distributions

If the Fund makes non-liquidating distributions
to Shareholders, such distributions generally will not be taxable to the Shareholders for U.S. federal income tax purposes except to the
extent that the amount of money distributed exceeds the Shareholder’s adjusted basis of its interest in the Fund immediately before
the distribution. Any money distributed that is in excess of a Shareholder’s tax basis generally will be treated as gain from the
sale or exchange of Shares. For purposes of determining the gain recognized on a distribution from a partnership, a marketable security
distributed to a partner is generally treated as money. This treatment, however, does not apply to distributions to “eligible partners”
of an “investment partnership,” as those terms are defined in the Code.

Tax Consequences of Disposition
of Shares

If a Shareholder sells its Shares,
it will recognize gain or loss equal to the difference between the amount realized and its adjusted tax basis for the Shares sold. A Shareholder’s
amount realized will be the sum of the cash or the fair market value of other property received plus its share of the Fund’s liabilities.

Gain or loss recognized by a Shareholder
on the sale or exchange of Shares held for more than one year will generally be taxable as long-term capital gain or loss; otherwise,
such gain or loss will generally be taxable as short-term capital gain or loss. A special election is available under the Treasury Regulations
that allows Shareholders to identify and use the actual holding periods for the Shares sold for purposes of determining whether the gain
or loss recognized on a sale of Shares will give rise to long-term or short-term capital gain or loss. It is expected that most Shareholders
will be eligible to elect, and generally will elect, to identify and use the actual holding period for Shares sold. If a Shareholder who
has differing holding periods for its Shares fails to make the election or is not able to identify the holding periods of the Shares sold,
the Shareholder will have a split holding period in the Shares sold. Under such circumstances, a Shareholder will be required to determine
its holding period in the Shares sold by first determining the portion of its entire interest in the Fund that would give rise to long-term
capital gain or loss if its entire interest were sold and the portion that would give rise to short-term capital gain or loss if the entire
interest were sold. The Shareholder would then treat each Share sold as giving rise to long-term capital gain or loss and short-term capital
gain or loss in the same proportions as if it had sold its entire interest in the Fund.

Under Section 751 of the Code, a portion
of a Shareholder’s gain or loss from the sale of Shares (regardless of the holding period for such Shares), will be separately computed
and taxed as ordinary income or loss to the extent attributable to “unrealized receivables” or “inventory” owned
by the Fund. The term “unrealized receivables” includes, among other things, market discount bonds and short-term debt instruments
to the extent such items would give rise to ordinary income if sold by the Fund. Such amounts of ordinary income allocated to a Shareholder
may be less than, equal to or more than the amount of such gain or loss that otherwise would have recognized by such Shareholder on such
sale of Shares.

If some or all of a Shareholder’s
Shares are lent by its broker or other agent to a third party — for example, for use by the third party in covering a short sale
— the Shareholder may be considered as having made a taxable disposition of the loaned Shares, in which case:

•	the Shareholder may recognize taxable gain or loss to the same extent as if it had sold the Shares for
cash;

•	any of the income, gain, loss, deduction or credit allocable to those Shares during the period of the
loan is not reportable by the Shareholder for U.S. federal income tax purposes; and

•	any distributions the Shareholder receives with respect to the Shares under the loan agreement will be
fully taxable to the Shareholder, most likely as ordinary income for U.S. federal income tax purposes.

Shareholders desiring to avoid these
and other possible consequences of a deemed disposition of their Shares should consider modifying any applicable brokerage account agreements
to prohibit the lending of their Shares.

Other U.S. Federal Income Tax Matters