JPMorgan - KASE

Certain Tax Considerations
Certain U.S. Federal Income Tax Considerations
The following discussion is a summary of the principal U.S. federal income tax consequences of
the ownership and disposition of the notes to a U.S. holder (as defined below) who purchases
notes pursuant to this offering at the price set forth on the cover page. This discussion is based
upon existing U.S. federal income tax law, including the Internal Revenue Code of 1986, as
amended (the “Internal Revenue Code”), administrative pronouncements, judicial decisions and
Treasury Regulations, as in effect as of the date hereof, all of which are subject to change,
possibly with retroactive effect.
This summary assumes that each of the notes are held as a capital asset as defined in Section
1221 of the Internal Revenue Code, in the hands of U.S. holders at all relevant times. This
summary does not discuss all aspects of U.S. federal income taxation that may be applicable to
holders of notes, nor does it address any aspects of foreign, state or local taxation. Furthermore,
this summary does not discuss all the tax consequences that may be relevant to a U.S. holder in
light of such holder’s particular circumstances, nor to U.S. holders subject to special rules
including certain financial institutions, regulated investment companies, insurance companies,
dealers in securities or currencies, tax-exempt organizations, persons who hold notes as part of a
position in a “straddle” or “appreciated financial position” or as part of a “hedging” or
“conversion” transaction or other integrated transaction, persons engaged in a trade or business
in the U.S. or persons who have ceased to be U.S. citizens or to be taxed as resident aliens, and
U.S. holders whose functional currency is not the U.S. dollar.
As used herein, “U.S. holder” means a holder of notes who or that is for U.S. federal income tax
purposes (i) a citizen or resident of the United States, (ii) a corporation or other entity taxable as
a corporation organized under the laws of the United States or any political subdivision thereof
(including the States and the District of Columbia), (iii) an estate the income of which is subject
to U.S. federal income taxation regardless of its source, (iv) a trust if a court within the U.S. is
able to exercise primary jurisdiction over its administration and one or more U.S. persons have
authority to control all substantial decisions of the trust, or (v) any other person that is subject to
U.S. federal income tax on its worldwide income. This summary does not discuss any U.S. federal
income tax consequences to holders that are not U.S. holders.
The following discussion is for general information only and is not intended to be, nor should it
be construed to be, legal or tax advice to any holder or prospective holder of notes and no
opinion or representation with respect to the U.S. federal income tax consequences to any such
holder or prospective holder is made. Holders of notes are urged to consult their tax advisors
with respect to the U.S. federal, state and local tax consequences, the foreign tax consequences
and the non-tax consequences of the acquisition, ownership and disposition of notes.
Payment of Interest
Interest paid on a note generally will be taxable to a U.S. holder as ordinary interest income at
the time it accrues or is received in accordance with the U.S. holder’s method of accounting for
U.S. federal income tax purposes. In addition to interest on the notes, a U.S. holder will be
required to include in income any additional amounts and certain foreign taxes withheld from
interest payments, notwithstanding that the U.S. holder does not in fact receive such withheld
taxes. A U.S. holder may be entitled to deduct or credit withholding tax withheld by the issuer
and paid over to the applicable taxing authorities or for any of those taxes paid directly to the
applicable taxing authorities, subject to applicable limitations in the Internal Revenue Code. The
rules governing the foreign tax credit are complex. Potential holders are urged to consult their
tax advisors regarding the availability of the foreign tax credit in their particular circumstances.
Interest income on a note generally will constitute foreign source income and generally will be
considered “passive” income or “financial services” income (or, if withholding tax at a rate of 5%
or more were to be imposed, as “high withholding tax interest”), which are treated separately
from other types of income in computing the foreign tax credit allowable to U.S. holders under
the Internal Revenue Code.
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