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attributable to any asset other than a

above). Do not include cash contributions

“Small REMICs,” as defined in

qualified mortgage or permitted

described below:

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

investment. See section 860G(a) for

regulations of both, are not subject to the

1. Any contribution to facilitate a

definitions.

rules for consolidated REMIC

clean-up call or a qualified liquidation.

proceedings but may make an election to

2. Any payment in the nature of a

Line 1c — Compensation for services.

be covered by them. This election can be

guarantee.

Enter the amount of fees or other

revoked only with the consent of the

3. Any contribution during the 3-month

compensation for services received or

Commissioner.

period beginning on the startup day.

accrued during the year.

4. Any contribution to a qualified

Item H — Foreign financial accounts.

Line 1d — Gain from the disposition of

reserve fund by any holder of a residual

Check the “Yes” box if either 1 or 2 below

cash flow investments (except from a

interest in the REMIC.

applies to the REMIC. Otherwise, check

qualified liquidation). Enter the amount

the “No” box:

of gain from the disposition of any “cash

Attach a schedule showing your

1. At any time during the 2003

flow investment” except from a qualified

computation.

calendar year, the REMIC had an interest

liquidation. A cash flow investment is any

in or signature or other authority over a

investment of amounts received under

Designation of Tax Matters

bank, securities, or other financial

qualified mortgages for a temporary

Person (TMP)

account in a foreign country; and

period (not more than 13 months) before

•

A REMIC may designate a tax matters

distribution to holders of interests in the

The combined value of the accounts

person in the same manner that a

was more than $10,000 at any time

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

partnership may designate a tax matters

during the calendar year; and

definition of a qualified liquidation.

•

partner under Regulations section

The account was not with a U.S.

Part II — Tax on Net Income From

301.6231(a)(7)-1. When applying that

military banking facility operated by a U.S.

section, treat all holders of a residual

Foreclosure Property

financial institution.

interest in the REMIC as general

2. The REMIC owns more than 50%

For a definition of foreclosure property,

partners. The designation may be made

of the stock in any corporation that would

see instructions on page 7 for Schedule

by completing the Designation of Tax

answer the question “Yes” to item 1

L, line 1c. Net income from foreclosure

Matters Person section on page 4 of

above.

property must also be included in the

Form 1066.

computation of taxable income (or net

Get Form TD F 90-22.1, Report of

loss) shown in Section I, page 1, Form

Additional Information

Foreign Bank and Financial Accounts, to

1066.

Be sure to answer the questions and

see if the REMIC is considered to have

Line 6 — Gross income from

provide other information in items E

an interest in or signature or other

foreclosure property. Do not include on

through L.

authority over a financial account in a

line 6 amounts described in section

foreign country.

Item E — Type of entity. Check the box

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

for the entity type of the REMIC

If you checked “Yes” for item H, file

Line 8 — Deductions. Only those

recognized under state or local law. If the

Form TD F 90-22.1 by June 30, 2004,

expenses that are directly connected with

REMIC is not a separate entity under

with the Department of the Treasury at

the production of the income shown on

state or local law, check the box for

the address shown on the form. Form TD

line 7 may be deducted to figure net

“Segregated Pool of Assets,” and state

F 90-22.1 is not a tax return. Do not file it

income from foreclosure property.

the name and type of entity that owns the

with Form 1066.

Allowable deductions include depreciation

assets in the spaces provided.

on foreclosure property, interest accrued

The REMIC can get Form TD F

Item F — Number of residual interest

on debt of the REMIC attributable to the

90-22.1 from an IRS Distribution Center

holders. Enter the number of persons

carrying of foreclosure property, real

or by calling 1-800-TAX-FORM

who were residual interest holders at any

estate taxes, and fees charged by an

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

time during the tax year.

independent contractor to manage

from the IRS website at

foreclosure property. Do not deduct

Item G — Consolidated REMIC

Also, if “Yes” is checked for this

general overhead and administrative

proceedings. Generally, the tax

question, enter the name of the foreign

expenses.

treatment of REMIC items is determined

country or countries. Attach a separate

at the REMIC level in a consolidated

Line 10 — Tax on net income from

sheet if more space is needed.

REMIC proceeding, rather than in

foreclosure property. The REMIC is

separate proceedings with individual

Item I — Foreign trust. The REMIC may

allowed a deduction for the amount of tax

be required to file Form 3520, Annual

residual interest holders.

shown on this line. Include this amount in

Return To Report Transactions With

computing the deduction for taxes

Check the box for item G if any of the

Foreign Trusts and Receipt of Certain

entered on line 11, Section I, page 1,

following applies:

Foreign Gifts, if:

•

Form 1066.

The REMIC had more than 10 residual

•

It directly or indirectly transferred

interest holders at any time during the tax

Part III —Tax on Contributions

property or money to a foreign trust. For

year (a husband and wife count as one

After the Startup Day

this purpose, any U.S. person who

holder).

created a foreign trust is considered a

•

Do not complete this part if the startup

Any residual interest holder was a

transferor.

day was before July 1, 1987. For this

nonresident alien or was other than an

•

It is treated as the owner of any part of

purpose “startup day” means any day

individual, a C corporation, or an estate,

the assets of a foreign trust under the

selected by a REMIC that is on or before

unless there was at no time during the

grantor trust rules.

the first day on which interests in the

tax year more than one holder of the

•

It received a distribution from a foreign

REMIC are issued.

residual interest.

trust.

•

Line 11 — Tax. Enter the amount of

The REMIC has elected to be subject

contributions received during the calendar

to the rules for consolidated REMIC

For more information, see the

year after the startup day (as defined

proceedings.

Instructions for Form 3520.

-6-

Instructions For Form 1066 - U.s. Real Estate Mortgage Investment Conduit (Remic) Income Tax Return - 2003 Page 6

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