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Returns. Use this form to summarize

938, Real Estate Mortgage Investment

the unpaid tax for each month or part of

and send information returns to the

Conduits (REMICs) Reporting

a month the return is late, up to a

Internal Revenue Service Center.

Information (And Other Collateralized

maximum of 25% of the unpaid tax, or if

Debt Obligations (CDOs)). This

the return is more than 60 days late, a

Form 1098, Mortgage Interest

publication contains a directory of

$135 minimum or the balance of tax

Statement. This form is used to report

REMICs.

due on the return, whichever is smaller.

the receipt from any individual of $600

or more of mortgage interest and points

Pub. 938 is not printed. Instead, it is

Late payment penalty. The penalty

in the course of the REMIC’s trade or

for not paying the tax when due is

available on the IRS website. For more

business.

information about Pub. 938, visit www.

usually

of 1% of the unpaid tax for

each month or part of a month the tax

irs.gov.

Forms 1099-A, B, C, INT, LTC, MISC,

is unpaid. The penalty cannot exceed

OID, R, S, and SA. Use these

Form 8822, Change of Address. This

25% of the unpaid tax. The penalty will

information returns to report

form is used to inform the IRS of a new

not be charged if you can show

acquisitions or abandonments of

REMIC address if the change is made

reasonable cause for not paying on

secured property; proceeds from broker

after filing Form 1066.

time.

and barter exchange transactions;

Payment of Tax Due

cancellation of a debt; interest income;

Other penalties. Penalties can also

certain payments made under a

The REMIC must pay the tax due (page

be imposed for negligence, substantial

long-term care insurance contract and

1, Section II, line 3) in full by the 15th

understatements of tax, reportable

certain accelerated death benefits;

day of the 4th month following the end

transaction understatements, and fraud.

miscellaneous income payments;

of the tax year. Enclose with Form 1066

See sections 6662, 6662A, and 6663.

original issue discount; distributions

a check or money order for the amount

Contributions to the REMIC

from pensions, annuities, retirement or

due payable to the “United States

profit-sharing plans, individual

Treasury.”

Generally, no gain or loss is recognized

retirement arrangement (IRAs),

by the REMIC or any of the regular or

The REMIC may be required to

insurance contracts, etc.; proceeds

residual interest holders when property

deposit its tax using the Electronic

from real estate transactions; and

is transferred to the REMIC in

Federal Tax Payment System (EFTPS).

distributions from an HSA, Archer MSA,

exchange for an interest in the REMIC.

If this requirement applies, use EFTPS

or Medicare Advantage MSA. Also, use

The adjusted basis of the interest

to deposit the tax.

these returns to report amounts that

received equals the adjusted basis of

If the REMIC is not required to

were received as a nominee on behalf

the property transferred to the REMIC.

deposit its tax using EFTPS, it may do

of another person.

The basis to the REMIC of property

so voluntarily. To do this, the REMIC

Generally, a REMIC must file Forms

transferred by a regular or residual

must be enrolled in EFTPS.

1099-INT and 1099-OID, as

interest holder is its fair market value

For information about EFTPS, visit

appropriate, to report accrued income

immediately after its transfer.

or see Publication 966,

of $10 or more of regular interest

If the transferor holds a regular

The Secure Way to Pay Your Federal

holders. See Regulations section

interest and if the issue price of the

Taxes for Business and Individual

1.6049-7. Also, every REMIC must file

regular interest is more than its

Taxpayers-EFTPS.

Forms 1099-MISC if it makes payments

adjusted basis, the excess is included

of rents, commissions, or other fixed or

Interest and Penalties

in income by the regular interest holder

determinable income (see section

for the applicable tax years as if the

Interest. Interest is charged on taxes

6041) totaling $600 or more to any one

excess were market discount on a bond

not paid by the due date, even if an

person in the course of its trade or

and the holder had made an election

extension of time to file is granted.

business during the calendar year.

under section 1278(b) to include this

Interest is also charged on penalties

For more details, see the 2008

market discount currently. If the

imposed for failure to file, negligence,

General Instructions for Forms 1099,

transferor holds a residual interest and

fraud, substantial valuation

1098, 5498, and W-2G.

if the issue price of the regular interest

misstatements, substantial

is more than its adjusted basis, the

Form 8275, Disclosure Statement,

understatements of tax, and reportable

excess is amortized and included in the

and Form 8275-R, Regulation

transaction understatements; the

residual interest holder’s income ratably

Disclosure Statement. Use these

interest is charged from the due date

over the anticipated weighted average

forms to disclose items or positions

(including extensions) to the date of

life of the REMIC (as defined in

taken on a tax return that are not

payment. The interest charge is figured

Regulations section 1.860E-1(a)(3)(iv)).

otherwise adequately disclosed on the

at a rate determined under section

return or that are contrary to Treasury

If the transferor holds a regular

6621.

regulations (to avoid parts of the

interest and if the adjusted basis of the

Late filing penalty. A penalty may be

accuracy-related penalty or certain

regular interest is more than its issue

charged if the return is filed after the

preparer penalties).

price, the regular interest holder treats

due date (including extensions) or the

the excess as amortizable bond

Form 8300, Report of Cash

return does not show all the information

premium subject to the rules of section

Payments Over $10,000 Received in

required, unless each failure is due to

171. If the transferor holds a regular

a Trade or Business. Generally, this

reasonable cause. If the failure is due

interest and if the adjusted basis of the

form is used to report the receipt of

to reasonable cause, attach an

regular interest is more than its issue

more than $10,000 in cash or foreign

explanation to the return. If no taxes

price, the excess is deductible ratably

currency in one transaction or a series

are due, the penalty is $90 for each

over the anticipated weighted average

of related transactions.

month or part of a month (up to 12

life of the REMIC (as defined in

Form 8811, Information Return for

months) the return is late or does not

Regulations section 1.860E-1(a)(3)(iv)).

Real Estate Mortgage Investment

include the required information,

Conduits (REMICs) and Issuers of

multiplied by the total number of

Payments Subject to

Collateralized Debt Obligations. A

persons who were residual interest

Withholding at Source

REMIC uses this form to provide the

holders in the REMIC during any part of

information required by Regulations

the REMIC’s tax year for which the

If there are any nonresident alien

section 1.6049-7(b)(1)(ii). This

return is due. If tax is due, the penalty

individuals, foreign partnerships, or

information will be published in Pub.

is the amount stated above plus 5% of

foreign corporations as regular interest

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Instructions For Form 1066 - U.s. Real Estate Mortgage Investment Conduit (Remic) Income Tax Return - 2009 Page 3

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