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during the calendar quarter represented

of the residual interest holder’s interest in

by each of the following categories of

the REMIC.

Privacy Act and Paperwork Reduction

assets:

Act Notice. We ask for the information

Line 2a — Sum of the daily accruals

•

Real estate assets under section

on this form to carry out the Internal

under section 860E for all residual

856(c)(5)(B), and

Revenue laws of the United States. You

interests for the calendar quarter.

•

Assets described in section

are required to give us the information.

Enter the product of the sum of the

7701(a)(19)(C) (relating to the definition

We need it to ensure that you are

adjusted issue prices of all residual

of a domestic building and loan

complying with these laws and to allow us

interests at the beginning of the quarter

association).

to figure and collect the right amount of

and 120% of the long-term federal rate

tax. Section 6109 requires return

(determined on the basis of compounding

These percentages must be computed

preparers to provide their identifying

using the average adjusted basis of the

at the end of each quarter and properly

numbers on the return.

adjusted for the length of such quarter).

assets held during the calendar quarter.

To do this, the REMIC must make the

See section 860E(c) for details.

You are not required to provide the

appropriate computation as of the close of

information requested on a form that is

Line 2b — Sum of the daily accruals

each month, week, or day and then

subject to the Paperwork Reduction Act

under section 860E for your interest.

average the monthly, weekly, or daily

unless the form displays a valid OMB

Enter zero if line 2a is zero. Otherwise,

percentages for the quarter. The monthly,

control number. Books or records relating

divide the amount shown on line 2a by

weekly, or daily computation period must

to a form or its instructions must be

the number of days in the quarter.

be applied uniformly during the calendar

retained as long as their contents may

Multiply the result by the residual interest

quarter to both categories of assets, and

become material in the administration of

holder’s percentage of ownership for each

may not be changed in succeeding

any Internal Revenue law. Generally, tax

day in the quarter that the residual

calendar quarters without IRS consent. If

returns and return information are

interest holder owned the interest. Total

the percentage of the REMIC’s assets for

confidential, as required by section 6103.

the daily amounts and enter the result.

either category is at least 95%, the

The time needed to complete and file

Line 3 — Complete lines 3a and 3b only

REMIC may show “95 or more” for that

this form and related schedule will vary

for residual interest holders who are

category in item C.

depending on individual circumstances.

individuals or other pass-through

If less than 95% of the assets of the

The estimated average times are:

interest holders (as defined in

REMIC are real estate assets (as defined

Temporary Regulations section

Schedule Q

in section 856(c)(5)(B)), the REMIC must

1.67-3T).

Form 1066

(Form 1066)

also report to any real estate investment

Line 3a — Section 212 expenses of the

trust that holds a residual interest the

REMIC for the calendar quarter. Enter

Recordkeeping

32 hr., 3 min.

6 hr., 27 min.

information specified in Regulations

Learning about

the REMIC’s allocable section 212

section 1.860F-4(e)(1)(ii)(B).

the law or the

expenses for the calendar quarter. The

form . . . . . . .

8 hr., 51 min.

1 hr., 40 min.

Item F — Reconciliation of residual

term “allocable section 212 expenses”

Preparing the

interest holder’s capital account. See

means the aggregate amount of the

form . . . . . . . 12 hr., 33 min.

1 hr., 52 min.

the instructions for Schedule M on page

expenses paid or accrued in the calendar

Copying,

quarter for which a deduction is allowable

assembling,

under section 212 in determining the

Line 1a — Taxable income (net loss) of

and sending the

taxable income of the REMIC for the

the REMIC for the calendar quarter.

form to the IRS

48 min.

calendar quarter.

Enter the REMIC’s taxable income (net

If you have comments concerning the

loss) for the calendar quarter. The sum of

Section 212 expenses generally

accuracy of these time estimates or

the totals for the 4 quarters in the

include operational expenses such as:

suggestions for making this form and

•

calendar year must equal the amount

rent,

related schedule simpler, we would be

•

shown on Form 1066, Section I, line 15.

salaries,

happy to hear from you. You can write to

•

legal fees,

Line 1b — Your share of the taxable

the Internal Revenue Service, Tax

•

income (net loss) for the calendar

accounting fees,

Products Coordinating Committee,

•

litigation expenses, and

quarter. Enter the residual interest

SE:W:CAR:MP:T:T:SP, 1111 Constitution

•

holder’s share of the taxable income (net

the cost of preparing and distributing

Ave. NW, IR-6406, Washington, DC

reports and notices to interest holders.

loss) shown on line 1a (determined by

20224. Do not send the tax form to this

adding the holder’s daily portions under

Line 3b — Your share of section 212

office. Instead, see Where To File on

section 860C(a)(2) for each day in the

expenses for the calendar quarter.

page 2.

quarter the holder held the residual

Enter the residual interest holder’s share

interest). If line 1a is a loss, enter the

of the amount shown on line 3a.

residual interest holder’s full share of the

loss, without regard to the adjusted basis

-8-

Instructions For Form 1066 - U.s. Real Estate Mortgage Investment Conduit (Remic) Income Tax Return - 2005 Page 8

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