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Line 2a — Sum of the daily accruals

of a domestic building and loan

under section 860E for all residual

association).

Paperwork Reduction Act Notice. We

interests for the calendar quarter.

ask for the information on this form to

These percentages must be computed

Enter the product of the sum of the

carry out the Internal Revenue laws of the

using the average adjusted basis of the

adjusted issue prices of all residual

United States. You are required to give us

assets held during the calendar quarter.

interests at the beginning of the quarter

the information. We need it to ensure that

To do this, the REMIC must make the

and 120% of the long-term Federal rate

you are complying with these laws and to

appropriate computation as of the close of

(determined on the basis of compounding

allow us to figure and collect the right

each month, week, or day and then

at the end of each quarter and properly

amount of tax.

average the monthly, weekly, or daily

adjusted for the length of such quarter).

You are not required to provide the

percentages for the quarter. The monthly,

See section 860E(c) for details.

information requested on a form that is

weekly, or daily computation period must

Line 2b — Sum of the daily accruals

subject to the Paperwork Reduction Act

be applied uniformly during the calendar

under section 860E for your interest.

unless the form displays a valid OMB

quarter to both categories of assets, and

Enter zero if line 2a is zero. Otherwise,

control number. Books or records relating

may not be changed in succeeding

divide the amount shown on line 2a by

to a form or its instructions must be

calendar quarters without IRS consent. If

the number of days in the quarter.

retained as long as their contents may

the percentage of the REMIC’s assets for

Multiply the result by the residual interest

become material in the administration of

either category is at least 95%, the

holder’s percentage of ownership for each

any Internal Revenue law. Generally, tax

REMIC may show “95 or more” for that

day in the quarter that the residual

returns and return information are

category in item C.

interest holder owned the interest. Total

confidential, as required by section 6103.

Note: If less than 95% of the assets of

the daily amounts and enter the result.

The time needed to complete and file

the REMIC are real estate assets (as

Line 3 — Complete lines 3a and 3b only

this form and related schedule will vary

defined in section 856(c)(5)(B)), the

for residual interest holders who are

depending on individual circumstances.

REMIC must also report to any real estate

individuals or other pass-through

The estimated average times are:

investment trust that holds a residual

interest holders (as defined in

interest the information specified in

Schedule Q

Temporary Regulations section

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

Form 1066

(Form 1066)

1.67-3T).

Item F — Reconciliation of residual

Line 3a — Section 212 expenses of the

Recordkeeping 31 hr., 49 min.

6 hr., 28 min.

interest holder’s capital account. See

REMIC for the calendar quarter. Enter

Learning about

the instructions for Schedule M on page

the REMIC’s allocable section 212

the law or the

expenses for the calendar quarter. The

form . . . . . . .

8 hr., 27 min.

1 hr., 41 min.

Line 1a — Taxable income (net loss) of

Preparing the

term “allocable section 212 expenses”

the REMIC for the calendar quarter.

form . . . . . . .

12 hr., 8 min.

1 hr., 52 min.

means the aggregate amount of the

Enter the REMIC’s taxable income (net

Copying,

expenses paid or accrued in the calendar

assembling,

loss) for the calendar quarter. The sum of

quarter for which a deduction is allowable

and sending the

the totals for the 4 quarters in the

under section 212 in determining the

form to the IRS

48 min.

calendar year must equal the amount

taxable income of the REMIC for the

shown on line 15, Section I of Form 1066.

If you have comments concerning the

calendar quarter.

Line 1b — Your share of the taxable

accuracy of these time estimates or

Section 212 expenses generally

income (net loss) for the calendar

suggestions for making this form and

include operational expenses such as

quarter. Enter the residual interest

related schedule simpler, we would be

rent, salaries, legal and accounting fees,

holder’s share of the taxable income (net

happy to hear from you. You can write to

the cost of preparing and distributing

loss) shown on line 1a (determined by

the Tax Forms Committee, Western Area

reports and notices to interest holders,

adding the holder’s daily portions under

Distribution Center, Rancho Cordova, CA

and litigation expenses.

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

95743-0001. Do not send the tax form to

Line 3b — Your share of section 212

quarter the holder held the residual

this office. Instead, see Where To File on

expenses for the calendar quarter.

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

page 2.

Enter the residual interest holder’s share

residual interest holder’s full share of the

of the amount shown on line 3a.

loss, without regard to the adjusted basis

of the residual interest holder’s interest in

the REMIC.

-8-

Instructions For Form 1066 - U.s. Real Estate Mortgage Investment Conduit (Remic) Income Tax Return - 2002 Page 8

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