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Estate or Trust; P – Partnership; E –

the totals for the 4 quarters in the

the cost of preparing and distributing

Exempt Organization; R – REMIC; or IRA

calendar year must equal the amount

reports and notices to interest holders,

– Individual Retirement Arrangement.

shown on line 15, Section I of Form 1066.

and litigation expenses.

Item B — Residual interest holder’s

Line 1b — Your share of the taxable

Line 3b — Your share of section 212

percentage of ownership. Enter in item

income (net loss) for the calendar

expenses for the calendar quarter.

B2 the percentage at the end of the

quarter. Enter the residual interest

Enter the residual interest holder’s share

calendar quarter. However, if a residual

holder’s share of the taxable income (net

of the amount shown on line 3a.

interest holder’s percentage of ownership

loss) shown on line 1a (determined by

changed during the quarter, enter in item

adding the holder’s daily portions under

Paperwork Reduction Act Notice. We

B1 the percentage immediately before the

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

ask for the information on this form to

change. If there are multiple changes in

quarter the holder held the residual

carry out the Internal Revenue laws of the

the percentage of ownership during the

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

United States. You are required to give us

quarter, attach a statement giving the

residual interest holder’s full share of the

the information. We need it to ensure that

date and percentage before each change.

loss, without regard to the adjusted basis

you are complying with these laws and to

of the residual interest holder’s interest in

Item C — REMIC assets. Enter in item C

allow us to figure and collect the right

the REMIC.

the percentage of the REMIC’s assets

amount of tax.

during the calendar quarter represented

Line 2a — Sum of the daily accruals

You are not required to provide the

by each of the following categories of

under section 860E for all residual

information requested on a form that is

assets:

interests for the calendar quarter.

subject to the Paperwork Reduction Act

Enter the product of the sum of the

1. Real estate assets under section

unless the form displays a valid OMB

adjusted issue prices of all residual

856(c)(5)(B); and

control number. Books or records relating

interests at the beginning of the quarter

2. Assets described in section

to a form or its instructions must be

and 120% of the long-term Federal rate

7701(a)(19)(C) (relating to the definition

retained as long as their contents may

(determined on the basis of compounding

of a domestic building and loan

become material in the administration of

at the end of each quarter and properly

association).

any Internal Revenue law. Generally, tax

adjusted for the length of such quarter).

returns and return information are

These percentages must be computed

See section 860E(c) for details.

confidential, as required by section 6103.

using the average adjusted basis of the

Line 2b — Sum of the daily accruals

The time needed to complete and file

assets held during the calendar quarter.

under section 860E for your interest.

this form and related schedule will vary

To do this, the REMIC must make the

Enter zero if line 2a is zero. Otherwise,

depending on individual circumstances.

appropriate computation as of the close of

divide the amount shown on line 2a by

The estimated average times are:

each month, week, or day and then

the number of days in the quarter.

average the monthly, weekly, or daily

Multiply the result by the residual interest

Schedule Q

percentages for the quarter. The monthly,

holder’s percentage of ownership for each

Form 1066

(Form 1066)

weekly, or daily computation period must

day in the quarter that the residual

be applied uniformly during the calendar

interest holder owned the interest. Total

Recordkeeping

32 hr., 3 min.

6 hr., 27 min.

quarter to both categories of assets, and

Learning about

the daily amounts and enter the result.

may not be changed in succeeding

the law or the

Line 3 — Complete lines 3a and 3b only

form . . . . . . .

8 hr., 51 min.

1 hr., 40 min.

calendar quarters without IRS consent. If

for residual interest holders who are

Preparing the

the percentage of the REMIC’s assets for

individuals or other pass-through

form . . . . . . . 12 hr., 33 min.

1 hr., 52 min.

either category is at least 95%, the

interest holders (as defined in

Copying,

REMIC may show “95 or more” for that

Temporary Regulations section

assembling,

category in item C.

and sending the

1.67-3T).

Note: If less than 95% of the assets of

form to the IRS

48 min.

Line 3a — Section 212 expenses of the

the REMIC are real estate assets (as

REMIC for the calendar quarter. Enter

If you have comments concerning the

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

the REMIC’s allocable section 212

accuracy of these time estimates or

REMIC must also report to any real estate

expenses for the calendar quarter. The

suggestions for making this form and

investment trust that holds a residual

term “allocable section 212 expenses”

related schedule simpler, we would be

interest the information specified in

means the aggregate amount of the

happy to hear from you. You can write to

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

expenses paid or accrued in the calendar

the Tax Products Coordinating

Item F — Reconciliation of residual

quarter for which a deduction is allowable

Committee, Western Area Distribution

interest holder’s capital account. See

under section 212 in determining the

Center, Rancho Cordova, CA

the instructions for Schedule M on page

taxable income of the REMIC for the

95743-0001. Do not send the tax form to

calendar quarter.

this office. Instead, see Where To File on

Line 1a — Taxable income (net loss) of

page 2.

Section 212 expenses generally

the REMIC for the calendar quarter.

include operational expenses such as

Enter the REMIC’s taxable income (net

rent, salaries, legal and accounting fees,

loss) for the calendar quarter. The sum of

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Instructions For Form 1066 - U.s. Real Estate Mortgage Investment Conduit (Remic) Income Tax Return - 2003 Page 8

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