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deductions in computing its taxable

depreciation on any car or other listed

the election, it may make the election on

income:

property.

an amended return filed not later than 6

•

The net operating loss deduction,

months after the due date of the return

Line 13 — Other deductions. Attach a

•

The deduction for taxes paid or

(excluding extensions). Write “Filed

schedule, listing by type and amount, any

accrued to foreign countries and U.S.

pursuant to section 301.9100-2” at the top

other allowable deductions for which no

possessions,

of the amended return.

line is provided on Form 1066. If there is

•

The deduction for charitable

only one item of other deductions,

Specific Instructions

contributions,

describe it in parentheses to the left of the

•

The deduction for depletion under

Column (d) — Sales price. Enter either

entry on line 13 instead of attaching a

section 611 for oil and gas wells, and

the gross sales price or the net sales

schedule.

•

Losses or deductions allocable to

price from the sale. On sales of stocks

Schedule D

prohibited transactions.

and bonds, report the gross amount as

reported to the REMIC by the REMIC’s

Line 9 — Amount accrued to regular

General Instructions

broker on Form 1099-B, Proceeds From

interest holders in the REMIC that is

Broker and Barter Exchange

Purpose of schedule. For a REMIC with

deductible as interest. Regular interests

Transactions, or similar statement.

a startup day before November 12, 1991,

in the REMIC are treated as indebtedness

However, if the broker advised the

use Schedule D to report the sale or

for Federal income tax purposes. Enter

REMIC that gross proceeds (gross sales

exchange of capital assets. To report

the amount of interest, including original

price) minus commissions and option

sales or exchanges of property other than

issue discount, accruing to regular

premiums were reported to the IRS, enter

capital assets, see Form 4797 and its

interest holders for the tax year. Do not

that net amount in column (d).

instructions.

deduct any amounts paid or accrued for

Column (e) — Cost or other basis. In

residual interests in the REMIC.

A REMIC with a startup day after

general, the cost or other basis is the cost

November 11, 1991, must use Form 4797

Line 10 — Other interest. Do not include

of the property plus purchase

instead of Schedule D because all of its

interest deducted on line 9 or interest on

commissions and improvements, minus

gains and losses from the sale or

indebtedness incurred or continued to

depreciation. If the REMIC got the

exchange of any property are treated as

purchase or carry obligations on which

property in a tax-free exchange,

ordinary gains and losses.

the interest is wholly exempt from income

involuntary conversion, or wash sale of

Report every sale or exchange of

tax. You may elect to include amortization

stock, it may not be able to use the actual

property in detail, even though there is no

of bond premium on taxable bonds

cash cost as the basis. If the REMIC uses

gain or loss.

acquired before 1988 unless you elected

a basis other than cash cost, attach an

to offset amortizable bond premium

For details, see Pub. 544, Sales and

explanation.

against the interest accrued on the bond

Other Dispositions of Assets.

(see the Section I, line 1, instructions). Do

When selling stock, adjust the basis by

Capital gain distributions. On line 7,

subtracting all the nontaxable distributions

not include any amount attributable to a

report the sum of: (a) capital gain

tax-exempt bond.

received before the sale. This includes

distributions, and (b) the REMIC’s share

nontaxable dividends from utility company

Line 11 — Taxes. Enter taxes accrued

of the undistributed capital gain from a

stock and mutual funds. Also, adjust the

during the tax year but do not include the

mutual fund or other regulated investment

basis for any stock splits.

following:

company.

•

See section 852(f) for the treatment of

Federal income taxes (except the tax

For details, see Pub. 564, Mutual

certain load charges incurred in acquiring

on net income from foreclosure property);

Fund Distributions.

•

stock in a mutual fund with a reinvestment

Foreign or U.S. possession income

Losses on worthless securities. If any

right.

taxes;

securities that are capital assets become

•

Taxes not imposed on the REMIC; or

Increase the cost or other basis by any

worthless during the tax year, the loss is a

•

Taxes, including state or local sales

expense of sale, such as broker’s fee,

loss from the sale or exchange of capital

taxes, that are paid or incurred in

commission, and option premium, before

assets as of the last day of the tax year.

connection with an acquisition or

making an entry in column (e), unless the

Losses from wash sales. The REMIC

disposition of property (such taxes must

REMIC reported net sales price in column

cannot deduct losses from a wash sale of

be treated as a part of the cost of the

(d).

stock or securities. A wash sale occurs if

acquired property or, in the case of a

the REMIC acquires (by purchase or

For details, see Pub. 551, Basis of

disposition, as a reduction in the amount

exchange), or has a contract or option to

Assets.

realized on the disposition).

acquire, substantially identical stock or

Schedule J

Note: If you have to pay tax on net

securities within 6 months before or after

income from foreclosure property, you

the date of the sale or exchange. See

Part I — Tax on Net Income from

should include this tax (from line 10 of

section 860F(d) for details.

Prohibited Transactions

Schedule J) here on line 11.

Installment sales. If the REMIC sold

See section 164(d) for apportionment

Do not net losses from prohibited

property (except publicly traded stock or

of taxes on real property between the

transactions against income or gains from

securities) at a gain and will receive any

seller and purchaser.

prohibited transactions in determining the

payment in a tax year after the year of

sale, it must use the installment method

amounts to enter on lines 1a through 1d.

Line 12 — Depreciation. See the

These losses are not deductible in

and Form 6252, Installment Sale Income,

instructions for Form 4562, Depreciation

computing net income from prohibited

unless it elects not to use the installment

and Amortization, or Pub. 946, How To

transactions.

method.

Depreciate Property, to figure the amount

of depreciation to enter on this line. You

If the REMIC wants to elect out of the

Note: For purposes of lines 1a and 1d,

must complete and attach Form 4562 if

installment method, it must report the full

the term “prohibited transactions” does

the REMIC placed property in service

amount of the gain on a timely filed return

not include any disposition that is required

during 2001, claims a section 179

(including extensions). If the REMIC filed

to prevent default on a regular interest

expense deduction, or claims

its original return on time without making

where the threatened default resulted

-5-

Form 1066 - Instructions For U.s. Real Estate Mortgage Investment Conduit (Remic) Income Tax Return Form Page 5

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