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to those interests, the administrative

foreclosure property, real estate taxes,

Item G — Consolidated REMIC

proceedings. Generally, the tax

costs associated with servicing that

and fees charged by an independent

class outweigh the benefits of

contractor to manage foreclosure

treatment of REMIC items is

maintaining the class. It does not

property. Do not deduct general

determined at the REMIC level in a

include the redemption of a class in

overhead and administrative expenses.

consolidated REMIC proceeding, rather

order to profit from a change in interest

than in separate proceedings with

Line 10 — Tax on net income from

rates.

individual residual interest holders.

foreclosure property. The REMIC is

Line 1a — Gain from certain

Check the box for item G if any of

allowed a deduction for the amount of

dispositions of qualified mortgages.

the following apply.

tax shown on this line. Include this

•

Enter the amount of gain from the

The REMIC had more than 10

amount in computing the deduction for

disposition of any qualified mortgage

residual interest holders at any time

taxes entered on Form 1066, page 1,

transferred to the REMIC other than a

during the tax year (a husband and wife

Section I, line 11.

disposition from:

count as one holder).

•

Part III—Tax on Contributions

•

The substitution of a qualified

Any residual interest holder was a

After the Startup Day

replacement mortgage for a qualified

nonresident alien, or was other than an

mortgage or the repurchase in lieu of

individual, a C corporation, or an

Do not complete this part if the startup

substitution of a defective obligation;

estate, unless there was at no time

day was before July 1, 1987. For this

•

The foreclosure, default, or imminent

during the tax year more than one

purpose, startup day means any day

default of the mortgage;

holder of the residual interest.

selected by a REMIC that is on or

•

The bankruptcy or insolvency of the

The REMIC has elected to be subject

before the first day on which interests in

REMIC; or

to the rules for consolidated REMIC

the REMIC are issued.

•

A qualified liquidation.

proceedings.

Line 11 — Tax. Enter the amount of

See section 860F(a) for details and

“Small REMICs,” as defined in

contributions received during the

exceptions.

sections 860F(e), 6231(a)(1)(B), and

calendar year after the startup day (as

the regulations of both, are not subject

Line 1b — Income from nonpermitted

defined in the prior paragraph). Do not

to the rules for consolidated REMIC

assets. Enter the amount of any

include cash contributions described

proceedings, but may make an election

income received or accrued during the

next.

•

to be covered by them. This election

year attributable to any asset other than

Any contribution to facilitate a

can be revoked only with the consent of

a qualified mortgage or permitted

clean-up call or a qualified liquidation.

•

the Commissioner.

investment. See section 860G(a) for

Any payment in the nature of a

definitions.

Item H — Foreign financial accounts.

guarantee.

•

Any contribution during the 3-month

Check the “Yes” box if either 1 or 2

Line 1c — Compensation for

period beginning on the startup day.

below applies to the REMIC. Otherwise,

services. Enter the receipt by the

•

Any contribution to a qualified

check the “No” box.

REMIC of any amount representing a

reserve fund by any holder of a residual

fee or other compensation for services.

1. At any time during the 2010

interest in the REMIC.

calendar year, the REMIC had a

Line 1d — Gain from the disposition

financial interest in or signature or other

of cash flow investments (except

Attach a schedule showing your

authority over any foreign financial

from a qualified liquidation). Enter

computation.

account, including bank, securities, or

the amount of gain from the disposition

Designation of Tax Matters

other types of financial accounts in a

of any cash flow investment except

foreign country (see Form TD F

from a qualified liquidation. A “cash flow

Person (TMP)

90-22.1, Report of Foreign Bank and

investment” is any investment of

A REMIC may designate a TMP in the

Financial Accounts); and

amounts received under qualified

same manner that a partnership may

a. The combined value of the

mortgages for a temporary period (not

designate a tax matters partner under

accounts was more than $10,000 at

more than 13 months) before

Regulations section 301.6231(a)(7)-1.

any time during the calendar year and

distribution to holders of interests in the

When applying that section, treat all

b. The account was not with a U.S.

REMIC. See section 860F(a)(4) for the

holders of a residual interest in the

military banking facility operated by a

definition of a qualified liquidation.

REMIC as general partners. The

U.S. financial institution.

Part II—Tax on Net Income

designation may be made by

2. The REMIC owns more than 50%

completing the Designation of Tax

From Foreclosure Property

of the stock in any corporation that

Matters Person section on Form 1066,

For a definition of foreclosure property,

would answer “Yes” to item 1 above.

page 4.

see instructions on page 7 for Schedule

If the “Yes” box is checked:

L, line 1c. Net income from foreclosure

Additional Information

property must also be included in the

•

Enter the name of the foreign country

Be sure to answer the questions and

computation of taxable income (or net

or countries. Attach a separate sheet if

provide other information in items E

loss) shown on Form 1066, page 1,

more space is needed.

through L.

•

Section I.

File Form TD F 90-22.1 by June 30,

Item E — Type of entity. Check the

Line 6 — Gross income from

2011, with the Department of the

box for the entity type of the REMIC

foreclosure property. Do not include

Treasury at the address shown on the

recognized under state or local law. If

on line 6 amounts described in section

form. Because TD F 90-22.1 is not a

the REMIC is not a separate entity

856(c)(3)(A), (B), (C), (D), (E), or (G).

tax form, do not file it with Form 1066.

under state or local law, check the box

You can order Form TD F 90-22.1 by

Line 8 — Deductions. Only those

for “Segregated Pool of Assets,” and

calling 1-800-TAX-FORM

expenses that are directly connected

state the name and type of entity that

(1-800-829-3676) or you can download

with the production of the income

owns the assets in the spaces

it from the IRS website at

shown on line 7 may be deducted to

provided.

figure net income from foreclosure

Item I — Foreign trust. The REMIC

Item F — Number of residual interest

property. Allowable deductions include

may be required to file Form 3520,

depreciation on foreclosure property,

holders. Enter the number of persons

Annual Return To Report Transactions

interest accrued on debt of the REMIC

who were residual interest holders at

With Foreign Trusts and Receipt of

attributable to the carrying of

any time during the tax year.

Certain Foreign Gifts, if:

-6-

Instructions For Form 1066 - U.s. Real Estate Mortgage Investment Conduit (Remic) Income Tax Return - 2010 Page 6

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