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These percentages must be computed using the average adjusted
Instructions for REMIC basis of the assets held during the calendar quarter. In computing the
(Section references are to the Internal Revenue Code unless otherwise average adjusted basis of the assets held during each calendar quarter,
noted.) the REMIC must make the appropriate computation as of the close of
each month, week, or day and then average the monthly, weekly, or daily
Purpose percentages for the quarter. The monthly, weekly, or daily computation
Schedule Q (Form N-66) shows each residual interest holder's share of period must be applied uniformly during the calendar quarter to both
the REMIC's quarterly taxable income (or net loss), the excess inclusion categories of assets, and may not be changed in succeeding calendar
with respect to the residual interest holder's interest, and the residual quarters without Department of Taxation consent. If the percentage of the
interest holder's share of the REMIC's section 212 expenses for the REMIC's assets for either category is at least 95%, the REMIC may show
quarter. "95 or more" for that category in item C.
Although the REMIC is not subject to income tax, the residual interest Note:If less than 95% of the assets of the REMIC are real estate assets
holders are liable for tax on their share of the REMIC's taxable income, (as defined in section 856(c)(5)(B)), the REMIC must also report to any
whether or not distributed, and must include their share on their tax real estate investment trust that holds a residual interest the information
returns. specified in IRC Regulations section 1.860F-4(e)(1)(ii)(B).
Item E. Reconciliation of residual interest holder's capital
General Instructions account.—See the instructions for Schedule M of Form N-66.
Complete Schedule Q (Form N-66) for each person who was a residual Line 1a. Taxable income (net loss) of the REMIC for the calendar
interest holder at any time during the calendar quarter. File Copy A with quarter.—Enter the REMIC's taxable income (or net loss) for the calendar
Form N-66. Give Copy B to the residual interest holder by the last day of quarter. The sum of the totals for the four quarters in the calendar year
the month following the month in which the calendar quarter ends. Keep must equal the amounts shown on line 15, section I of Form N-66.
Copy C with a copy of Form N-66 as part of the REMIC's records.
Line 1b. Your share of the taxable income (net loss) for the calendar
quarter.—Enter the residual interest holder's share of the taxable income
Specific Instructions (or net loss) shown on line 1a (determined by adding such holder's daily
On each Schedule Q, enter the names, addresses, and identifying portions under section 860C(a)(2) for each day in the quarter such holder
numbers of the residual interest holder and REMIC. For each residual held the residual interest). If line 1a is a loss, enter the residual interest
interest holder that is an individual, you must enter the residual interest holder's full share of the loss, without regard to the adjusted basis of the
holder's social security number. If the individual is an alien who does not residual holder's interest in the REMIC.
have, and is not eligible to obtain, a social security number, the alien must
enter the individual taxpayer identification number (ITIN) issued to the Line 2a. Sum of the daily accruals under section 860E for all residual
alien by the Internal Revenue Service. If the individual has applied for an interests for the calendar quarter.—Enter the product of the sum of the
ITIN but the IRS has not yet issued the ITIN, write “Applied For”. For all adjusted issue prices of all residual interests at the beginning of the
other residual interest holders you must enter the residual interest holder's quarter and 120% of the long-term Federal rate (determined on the basis
employer identification number. (However, if a residual interest holder is of compounding at the end of each quarter and properly adjusted for the
an individual retirement arrangement (IRA), enter the identifying number of length of such quarter). See section 860E(c) for details.
the IRA trust. Do not enter the social security number of the individual for Line 2b. Sum of the daily accruals under section 860E with respect
whom the IRA is maintained.) to your interest.—Enter zero if line 2a is zero. Otherwise, divide the
Item A. What type of entity is this residual interest holder?—State on amount shown on line 2a by the number of days in the quarter. Multiply
this line whether the residual interest holder is an individual, a corporation,the result by the residual interest holder's percentage of ownership for
a fiduciary, a partnership, an exempt organization, a nominee (custodian), each day in the quarter that the residual interest holder owned the interest.
or another REMIC. If the residual interest holder is a nominee, use the Total the daily amounts and enter the result.
following codes to indicate in parentheses the type of entity the nominee Line 3. Complete lines 3a and 3b only for residual interest holders
represents: I - Individual; C - Corporation; F - Fiduciary; P - Partnership; who are individuals or other pass-through interest holders (as
E - Exempt Organization; R - REMIC; or IRA - Individual Retirement defined in IRC Temporary Regulations section 1.67-3T).
Arrangement Line 3a. Section 212 expenses of the REMIC for the calendar
Item B. Residual interest holder's percentage of ownership.—Enter in quarter.—Enter the REMIC's allocable section 212 expenses for the
item B(ii) the percentage existing at the end of the calendar quarter. calendar quarter. The term "allocable section 212 expenses" means the
However, if a residual interest holder's percentage of ownership changed aggregate amount of the expenses paid or accrued in the calendar quarter
during the quarter, enter in item B(i) the percentage that existed for which a deduction is allowable under section 212 in determining the
immediately before the change. If there are multiple changes in the taxable income of the REMIC for the calendar quarter.
percentage of ownership during the quarter, attach a statement giving the Section 212 expenses generally include operational expenses such
date and percentage before each change. as rent, salaries, legal and accounting fees, the cost of preparing and
Item C. REMIC assets.—Enter in Item C the percentage of the REMIC's distributing reports and notices to interest holders, and litigation expenses.
assets during the calendar quarter represented by each of the following Line 3b. Your share of section 212 expenses for the calendar
categories of assets: quarter.—Enter the residual interest holder's share of the amount shown
(1) Real estate assets under section 856(c)(5)(B); and on line 3a.
(2) Assets described in section 7701(a)(19)(C)(relating to the
definition of a domestic building and loan association).
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