45 / 111
44
If a mark-to-market election is made, the excess distribution regime will not apply to amounts received
with respect to our common shares from and after the effective time of the election, and any mark-to-market gains or
gains on disposition will be treated as ordinary income. Mark-to-market losses and losses on disposition will be
treated as ordinary losses to the extent of the U.S. Holder’s unrecovered prior net mark-to-market gains. Losses in
excess of prior net mark-to-market gains will generally not be recognized. The mark-to-market election must be
made by the due date (as may be extended) for filing the U.S. Holder’s federal income tax return for the first year in
which the election is to take effect. A mark-to-market election applies to all future years of an electing U.S. Holder
during which the stock is regularly traded on a qualifying exchange, unless revoked with the IRS’s consent.
The QEF election and mark-to-market election rules are complex. U.S. Holders should consult their tax
advisor regarding the availability and procedure for making these elections.
Special adverse rules apply to U.S. Holders of our common shares for any year in which we are a PFIC and
own or dispose of shares in another corporation that is also a PFIC (a “lower-tier PFIC”). A U.S. Holder who
owned our common shares while we were a PFIC will be taxable under the excess distribution rules described above
with respect to any gain that we recognize from a disposition of shares in a lower-tier PFIC, or if the U.S. Holder
disposes of all or part of its common shares. Moreover, a QEF election or mark-to-market election that is made for
our common shares would not apply to a lower-tier PFIC. While a separate QEF election may be made for a lower-
tier PFIC, we may not be in possession of and thus may not be able to provide the financial information to U.S.
Holders that would allow them to make a QEF election for any lower-tier PFIC. A mark-to-market election
generally may not be made with respect to a lower-tier PFIC.
A U.S. Holder who makes a QEF election for our common shares will be taxable under the excess
distribution regime on gain that we recognize on the sale of shares of a lower-tier PFIC, but will not also be taxable
on such gain under the QEF rules. However, any U.S. Holder who makes a mark-to-market or deemed sale election
for our common shares could be subject to the PFIC rules with respect to income of the lower-tier PFIC, even
though the value of the lower-tier PFIC already was subject to tax via mark-to-market or deemed sale adjustments.
The IRS has issued proposed regulations that, subject to certain exceptions, would treat as taxable certain
transfers of PFIC stock by a U.S. Holder that has not made a timely QEF election or mark-to-market election that
are generally not otherwise taxed, such as gifts, exchanges pursuant to corporate reorganizations, and transfers at
death. Generally, in such cases, the basis of our common shares in the hands of the transferee and the basis of any
property received in the exchange for those shares would be increased by the amount of gain recognized. The
specific tax effect to the U.S. Holder and the transferee may vary based on the manner in which the common shares
are transferred. Each U.S. Holder should consult a tax advisor with respect to how the PFIC rules affect their tax
situation prior to transferring PFIC shares.
Special adverse rules that impact certain estate planning goals could apply to our common shares if we are
a PFIC. Special rules apply with respect to the calculation of the amount of the foreign tax credit with respect to
excess distributions by a PFIC.
Each U.S. Holder that has a direct or indirect interest in our common shares generally must file IRS
Form 8621 reporting distributions received and gain realized with respect to our common shares. Each U.S.
Holder should consult its tax advisor regarding these and any other applicable information or other reporting
requirements.
If we are a PFIC in the taxable year in which we pay a dividend or the immediately preceding taxable year,
dividends on our common shares will not be “qualified dividend income,” and such dividends received by individual
U.S. Holders generally will be taxed at ordinary income tax rates, subject to the tax rules that apply to excess
distributions from PFICs, as discussed above.
Sale or Other Disposition of Our Common Shares
The tax treatment of a sale or other disposition of our common shares by a U.S. Holder will differ based
upon whether the PFIC rules apply and whether the U.S. Holder has made any of the elections described above.