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

•

It directly or indirectly transferred

Note. Solely for purposes of section

Capital losses over the $3,000

money or property to a foreign trust (for

860D(a), the determination of whether

limitation (for a REMIC with a startup

this purpose, any U.S. person who

any property is foreclosure property will

day before November 12, 1991),

•

created a foreign trust is considered a

be made without regard to section

Other nondeductible amounts (such

transferor);

856(e)(4).

as losses from prohibited transactions

•

It is treated as the owner of any part

and expenses connected with the

Line 7 — Regular interests. These

of the assets of a foreign trust under

production of tax-exempt income),

are interests in the REMIC that are

•

the grantor trust rules; or

Deductions allocable to prohibited

issued on the startup day with fixed

•

It received a distribution from a

transactions,

terms and that are designated as

•

foreign trust.

Expenses recorded on books not

regular interests, if:

deducted on this return, and

For more information, see the

•

1. Such interest unconditionally

Taxable income not recorded on the

Instructions for Form 3520.

entitles the holder to receive a specified

books this year.

Note. An owner of a foreign trust must

principal amount or other similar

ensure that the trust files an annual

amounts; and

information return on Form 3520-A,

2. Interest payments (or similar

Schedule Q

Annual Information Return of Foreign

amounts), if any, with respect to the

Quarterly Notice to

Trust With a U.S. Owner. For details,

interest at or before maturity are

see the Instructions for Form 3520-A.

payable based on a fixed rate (or at a

Residual Interest Holder

variable rate described in Regulations

To report information required under

section 1.860G-1(a)(3)), or consist of a

of REMIC Taxable

section 6038B the REMIC may be

specified portion of the interest

required to file Form 926, Return by a

Income or Net Loss

payments on qualified mortgages and

U.S. Transferor of Property to a Foreign

this portion does not vary during the

Allocation

Corporation, or Form 8865, Return of

period that the interest is outstanding.

U.S. Persons With Respect to Certain

Foreign Partnerships. See the

Purpose of Schedule

The interest will meet the

instructions for these forms for more

requirements of 1 even if the timing (but

Schedule Q (Form 1066) shows each

information.

not the amount) of the principal

residual interest holder’s share of the

Item L — Sum of the daily accruals.

payments (or other similar amounts) is

REMIC’s quarterly taxable income (or

Enter the total of the daily accruals for

contingent on the extent of

net loss), the excess inclusion for the

all residual interests for the calendar

prepayments on qualified mortgages

residual interest holder’s interest, and

year. See section 860E(c)(2) for details.

and the amount of income from

the residual interest holder’s share of

permitted investments.

the REMIC’s section 212 expenses for

Schedule L

the quarter.

An interest will still qualify as a

Balance Sheets per Books

regular interest even if the specified

Although the REMIC is not subject to

The amounts shown should agree with

principal amount of the regular interest

income tax (except on net income from

the REMIC’s books and records. Attach

(or the amount of interest accrued on

prohibited transactions, net income

a statement explaining any differences.

the regular interest) can be reduced as

from foreclosure property, and

Line 1a — Cash flow investments.

a result of the nonoccurrence of one or

contributions made after the startup

These are any investments of amounts

more contingent payments with respect

day), the residual interest holders are

received under qualified mortgages for

to any reverse mortgage loan held by

liable for tax on their shares of the

a temporary period (not more than 13

the REMIC if, on the startup day for the

REMIC’s taxable income, whether or

months) before distribution to holders of

REMIC, the sponsor reasonably

not distributed, and must include their

interests in the REMIC.

believes that all principal and interest

shares on their tax returns.

due under the regular interest will be

Line 1b — Qualified reserve assets.

General Instructions

paid at or prior to the liquidation of the

The term “qualified reserve asset”

REMIC.

means any intangible property which is

For each calendar quarter, complete

held for investment and as part of a

Schedule Q (Form 1066) for each

Schedule M

qualified reserve fund. For a definition

person who was a residual interest

Reconciliation of Residual

of qualified reserve fund, including

holder at any time during the quarter.

exceptions, see sections 860G(a)(7)(B)

Interest Holders’ Capital

File Schedule Q with Form 1066. Give

and (C).

one copy to the residual interest holder

Accounts

by the last day of the month following

Line 1c — Foreclosure property. This

Show what caused the changes in the

the month in which the calendar quarter

is any real property (including interests

residual interest holders’ capital

ends. Keep one copy with a copy of

in real property), and any personal

accounts during the tax year.

Form 1066 as part of the REMIC’s

property incident to such real property,

records.

acquired by the REMIC as a result of

The amounts shown should agree

the REMIC’s having bid in the property

with the REMIC’s books and records

Specific Instructions

at foreclosure, or having otherwise

and the balance sheet amounts. Attach

reduced the property to ownership or

a statement explaining any differences.

On each Schedule Q, enter the name,

possession by agreement or process of

address, and identifying number for

Include in column (d):

law, after there was a default or

each residual interest holder and

•

Tax-exempt interest income,

imminent default on a qualified

REMIC. For each residual interest

•

Other tax-exempt income,

mortgage held by the REMIC.

holder that is an individual, you must

•

Income from prohibited transactions,

Generally, this property ceases to be

enter the residual interest holder’s

•

Income recorded on the REMIC’s

foreclosure property at the close of the

social security number (SSN) (or

books but not included on this return,

third tax year following the tax year in

individual taxpayer identification

and

which the REMIC acquired the

number (ITIN) for a resident or

•

Allowable deductions not charged

property. See sections 860G(a)(8),

nonresident alien). For all other residual

against book income this year.

856(e), and Regulations section

interest holders, you must enter the

1.856-6 for more details.

Include in column (e):

residual interest holder’s EIN. However,

-7-

Instructions For Form 1066 - U.s. Real Estate Mortgage Investment Conduit (Remic) Income Tax Return - 2010 Page 7

Related Articles

Related forms

Related Categories