Instructions For Form 1066 - 2016 (Page 8 of 9) in pdf

However, if a residual interest holder is

estate investment trust that holds a

Line 3—Complete lines 3a and 3b

an IRA, enter the identifying number of

residual interest the information

only for residual interest holders

the IRA trust. Don't enter the SSN (or

specified in Regulations section

who are individuals or other

ITIN) of the individual for whom the IRA

1.860F-4(e)(1)(ii)(B). However, if a

pass-through interest holders (as

is maintained.

REMIC is an “eligible REMIC” as

defined in Temporary Regulations

defined in Notice 2012-5, and a

section 1.67-3T).

Item A—What type of entity is this

percentage of its assets represented by

residual interest holder? State on

Line 3a—Section 212 expenses of

either of the categories of assets

this line whether the residual interest

the REMIC for the calendar quarter.

described under REMIC assets, earlier,

holder is an individual, a corporation, an

Enter the REMIC's allocable section 212

was less than 95% but at least 80%,

estate, a trust, a partnership, an exempt

expenses for the calendar quarter. The

then the REMIC need only specify in

organization, a nominee (custodian), or

term “allocable section 212 expenses”

Item C that the percentage for that

another REMIC. If the residual interest

means the aggregate amount of the

category was at least 80%. For more

holder is a nominee, use the following

expenses paid or accrued in the

information, see Notice 2012-5 available

codes to indicate in parentheses the

calendar quarter for which a deduction

on page 291 of Internal Revenue

type of entity the nominee represents:

is allowable under section 212 in

Bulletin 2012-3 at

I – Individual, C – Corporation, F –

determining the taxable income of the

irbs/irb12-03_IRB/ar11.html.

Estate or Trust, P – Partnership, E –

REMIC for the calendar quarter.

Exempt Organization, R – REMIC, or

Item F—Reconciliation of residual

Section 212 expenses generally

IRA – Individual Retirement

interest holder's capital account.

include operational expenses such as:

Arrangement.

See the instructions for Schedule M,

Rent,

earlier.

Item B—Residual interest holder's

Salaries,

percentage of ownership. Enter in

Line 1a—Taxable income (net loss)

Legal fees,

item B2 the percentage at the end of the

of the REMIC for the calendar quar-

Accounting fees,

calendar quarter. However, if a residual

ter. Enter the REMIC's taxable income

Litigation expenses, and

interest holder's percentage of

(net loss) for the calendar quarter. The

The cost of preparing and distributing

ownership changed during the quarter,

sum of the totals for the 4 quarters in the

reports and notices to interest holders.

enter in item B1 the percentage

calendar year must equal the amount

Line 3b—Your share of section 212

immediately before the change. If there

shown on Form 1066, Section I, line 15.

expenses for the calendar quarter.

are multiple changes in the percentage

Line 1b—Your share of the taxable

Enter the residual interest holder's share

of ownership during the quarter, attach

income (net loss) for the calendar

of the amount shown on line 3a.

a statement giving the date and

quarter. Enter the residual interest

percentage before each change.

holder's share of the taxable income

Paperwork Reduction Act Notice.

Item C—REMIC assets. Enter in item

(net loss) shown on line 1a (determined

We ask for the information on this form

C the percentage of the REMIC's assets

by adding the holder's daily portions

to carry out the Internal Revenue laws of

during the calendar quarter represented

under section 860C(a)(2) for each day

the United States. You're required to

by each of the following categories of

in the quarter the holder held the

give us the information. We need it to

assets:

residual interest). If line 1a is a loss,

ensure that you are complying with

Real estate assets under section

enter the residual interest holder's full

these laws and to allow us to figure and

856(c)(5)(B), and

share of the loss, without regard to the

collect the right amount of tax.

Assets described in section 7701(a)

adjusted basis of the residual interest

You’re not required to provide the

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

holder's interest in the REMIC.

information requested on a form that is

domestic building and loan association).

Line 2a—Sum of the daily accruals

subject to the Paperwork Reduction Act

These percentages must be

under section 860E for all residual

unless the form displays a valid OMB

computed using the average adjusted

interests for the calendar quarter.

control number. Books or records

basis of the assets held during the

Enter the product of the sum of the

relating to a form or its instructions must

calendar quarter. To do this, the REMIC

adjusted issue prices of all residual

be retained as long as their contents

must make the appropriate computation

interests at the beginning of the quarter

may become material in the

as of the close of each month, week, or

and 120% of the long-term federal rate

administration of any Internal Revenue

day and then average the monthly,

(determined on the basis of

law. Generally, tax returns and return

weekly, or daily percentages for the

compounding at the end of each quarter

information are confidential, as required

quarter. The monthly, weekly, or daily

and properly adjusted for the length of

by section 6103.

computation period must be applied

such quarter). See section 860E(c) for

The time needed to complete and file

uniformly during the calendar quarter to

details.

this form and related schedule will vary

both categories of assets, and may not

Line 2b—Sum of the daily accruals

depending on individual circumstances.

be changed in succeeding calendar

under section 860E for your interest.

The estimated burden for business

quarters without IRS consent. If the

Enter zero if line 2a is zero. Otherwise,

taxpayers filing this form and the related

percentage of the REMIC's assets for

divide the amount shown on line 2a by

schedule is approved under OMB

either category is at least 95%, the

the number of days in the quarter.

control number 1545–0123 and is

REMIC may show “95 or more” for that

Multiply the result by the residual

included in the estimates shown in the

category in item C.

interest holder's percentage of

instructions for their business income

If less than 95% of the assets of the

ownership for each day in the quarter

tax return.

REMIC are real estate assets (as

that the residual interest holder owned

If you have comments concerning the

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

the interest. Total the daily amounts and

accuracy of the time estimates or

REMIC must also report to any real

enter the result.

suggestions for making this form and

-8-

Instructions For Form 1066 - 2016 Page 8

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