Looking for a Form 1066 Templates? Download it for free!

•

Foreign or U.S. possession income

Losses on worthless securities. If any

stock in a mutual fund with a reinvestment

taxes;

securities that are capital assets become

right.

•

Taxes not imposed on the REMIC; or

worthless during the tax year, the loss is a

Increase the cost or other basis by any

•

Taxes, including state or local sales

loss from the sale or exchange of capital

expense of sale, such as broker’s fee,

taxes, that are paid or incurred in

assets as of the last day of the tax year.

commission, and option premium, before

connection with an acquisition or

Losses from wash sales. The REMIC

making an entry in column (e), unless the

disposition of property (such taxes must

cannot deduct losses from a wash sale of

REMIC reported net sales price in column

be treated as a part of the cost of the

stock or securities. A wash sale occurs if

(d).

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

Note: If you have to pay tax on net

securities within 6 months before or after

Schedule J

income from foreclosure property, you

the date of the sale or exchange. See

should include this tax (from line 10 of

section 860F(d) for details.

Part I —Tax on Net Income from

Schedule J) here on line 11.

Prohibited Transactions

Installment sales. If the REMIC sold

See section 164(d) for apportionment

property (except publicly traded stock or

Do not net losses from prohibited

of taxes on real property between the

securities) at a gain and will receive any

transactions against income or gains from

seller and purchaser.

payment in a tax year after the year of

prohibited transactions in determining the

sale, it must use the installment method

Line 12 — Depreciation. See the

amounts to enter on lines 1a through 1d.

and Form 6252, Installment Sale Income,

instructions for Form 4562, Depreciation

These losses are not deductible in

unless it elects not to use the installment

and Amortization, or Pub. 946, How To

computing net income from prohibited

method.

Depreciate Property, to figure the amount

transactions.

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 2002, 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

depreciation on any car or other listed

the election, it may make the election on

from a default on one or more qualified

property.

an amended return filed not later than 6

mortgages, or to facilitate a clean-up call.

Line 13 — Other deductions. Attach a

months after the due date of the return

A clean-up call is the redemption of a

schedule, listing by type and amount, any

(excluding extensions). Write “Filed

class of regular interests when, by reason

other allowable deductions for which no

pursuant to section 301.9100-2” at the top

of prior payments with respect to those

line is provided on Form 1066. If there is

of the amended return.

interests, the administrative costs

only one item of other deductions,

associated with servicing that class

Specific Instructions

describe it in parentheses to the left of the

outweigh the benefits of maintaining the

entry on line 13 instead of attaching a

Column (d) — Sales price. Enter either

class. It does not include the redemption

schedule.

the gross sales price or the net sales

of a class in order to profit from a change

price from the sale. On sales of stocks

Schedule D

in interest rates.

and bonds, report the gross amount as

Line 1a — Gain from certain

reported to the REMIC by the REMIC’s

General Instructions

dispositions of qualified mortgages.

broker on Form 1099-B, Proceeds From

Enter the amount of gain from the

Purpose of schedule. For a REMIC with

Broker and Barter Exchange

disposition of any qualified mortgage

a startup day before November 12, 1991,

Transactions, or similar statement.

transferred to the REMIC other than a

use Schedule D to report the sale or

However, if the broker advised the

disposition from:

exchange of capital assets. To report

REMIC that gross proceeds (gross sales

sales or exchanges of property other than

1. The substitution of a qualified

price) minus commissions and option

capital assets, see Form 4797 and its

replacement mortgage for a qualified

premiums were reported to the IRS, enter

instructions.

mortgage (or the repurchase in lieu of

that net amount in column (d).

substitution of a defective obligation).

A REMIC with a startup day after

Column (e) — Cost or other basis. In

2. The foreclosure, default, or

November 11, 1991, must use Form 4797

general, the cost or other basis is the cost

imminent default of the mortgage.

instead of Schedule D because all of its

of the property plus purchase

3. The bankruptcy or insolvency of the

gains and losses from the sale or

commissions and improvements, minus

REMIC.

exchange of any property are treated as

depreciation. If the REMIC got the

4. A qualified liquidation.

ordinary gains and losses.

property in a tax-free exchange,

Report every sale or exchange of

involuntary conversion, or wash sale of

See section 860F(a) for details and

property in detail, even though there is no

stock, it may not be able to use the actual

exceptions.

gain or loss.

cash cost as the basis. If the REMIC uses

Line 1b — Income from nonpermitted

a basis other than cash cost, attach an

For details, see Pub. 544, Sales and

assets. Enter the amount of any income

explanation.

Other Dispositions of Assets.

received or accrued during the year

When selling stock, adjust the basis by

attributable to any asset other than a

Capital gain distributions. On line 7,

subtracting all the nontaxable distributions

qualified mortgage or permitted

report the sum of: (a) capital gain

received before the sale. This includes

investment. See section 860G(a) for

distributions, and (b) the REMIC’s share

nontaxable dividends from utility company

definitions.

of the undistributed capital gain from a

stock and mutual funds. Also, adjust the

mutual fund or other regulated investment

Line 1c — Compensation for services.

basis for any stock splits.

company.

Enter the amount of fees or other

For details, see Pub. 564, Mutual

See section 852(f) for the treatment of

compensation for services received or

Fund Distributions.

certain load charges incurred in acquiring

accrued during the year.

-5-

Instructions For Form 1066 - U.s. Real Estate Mortgage Investment Conduit (Remic) Income Tax Return - 2002 Page 5

Related Articles

Related forms

Related Categories