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Deductions — (Lines 7 through 14).

placed property in service during 2009,

REMIC filed its original return on time

Include only deductible amounts on

claims a section 179 expense

without making the election, it may

lines 7 through 14. A REMIC is not

deduction, or claims depreciation on

make the election on an amended

allowed any of the following deductions

any car or other listed property.

return filed not later than 6 months after

in computing its taxable income.

the due date of the return (excluding

Line 13 — Other deductions. Attach a

•

The net operating loss deduction.

extensions). Write “Filed pursuant to

schedule, listing by type and amount,

•

The deduction for taxes paid or

section 301.9100-2” at the top of the

any other allowable deductions for

accrued to foreign countries and U.S.

amended return.

which no line is provided on Form

possessions.

1066. If there is only one item of other

Specific Instructions

•

The deduction for charitable

deductions, describe it in parentheses

contributions.

Column (d) — Sales price. Enter

to the left of the entry on line 13 instead

•

The deduction for depletion under

either the gross sales price or the net

of attaching a schedule.

section 611 for oil and gas wells.

sales price from the sale. On sales of

•

Schedule D

Losses or deductions allocable to

stocks and bonds, report the gross

prohibited transactions.

amount as reported to the REMIC by

General Instructions

the REMIC’s broker on Form 1099-B,

Line 9 — Amount accrued to regular

Proceeds From Broker and Barter

interest holders in the REMIC that is

Purpose of schedule. For a REMIC

Exchange Transactions, or similar

deductible as interest. Regular

with a startup day before November 12,

statement. However, if the broker

interests in the REMIC are treated as

1991, use Schedule D to report the sale

advised the REMIC that gross proceeds

indebtedness for federal income tax

or exchange of capital assets. To report

(gross sales price) minus commissions

purposes. Enter the amount of interest,

sales or exchanges of property other

and option premiums were reported to

including original issue discount,

than capital assets, see Form 4797 and

the IRS, enter that net amount in

accruing to regular interest holders for

its instructions.

column (d).

the tax year. Do not deduct any

A REMIC with a startup day after

Column (e) — Cost or other basis. In

amounts paid or accrued for residual

November 11, 1991, must use Form

general, the cost or other basis is the

interests in the REMIC.

4797 instead of Schedule D because all

cost of the property plus purchase

Line 10 — Other interest. Do not

of its gains and losses from the sale or

commissions and improvements, minus

include interest deducted on line 9 or

exchange of any property are treated

depreciation. If the REMIC got the

interest on indebtedness incurred or

as ordinary gains and losses.

property in a tax-free exchange,

continued to purchase or carry

Report every sale or exchange of

involuntary conversion, or wash sale of

obligations on which the interest is

property in detail, even though there is

stock, it may not be able to use the

wholly exempt from income tax. You

no gain or loss.

actual cash cost as the basis. If the

may elect to include amortization of

REMIC uses a basis other than cash

For details, see Pub. 544, Sales and

bond premium on taxable bonds

cost, attach an explanation.

Other Dispositions of Assets.

acquired before 1988 unless you

When selling stock, adjust the basis

elected to offset amortizable bond

Capital gain distributions. On line 7,

by subtracting all the nontaxable

premium against the interest accrued

report the sum of capital gain

distributions received before the sale.

on the bond (see the Section I, line 1,

distributions and the REMIC’s share of

This includes nontaxable dividends

instructions). Do not include any

the undistributed capital gain from a

from utility company stock and mutual

amount attributable to a tax-exempt

mutual fund or other regulated

funds. Also, adjust the basis for any

bond.

investment company.

stock splits.

Line 11 — Taxes. If you have to pay

For details, see Pub. 564, Mutual

See section 852(f) for the treatment

tax on net income from foreclosure

Fund Distributions.

of certain load charges incurred in

property, you should include this tax

Losses on worthless securities. If

acquiring stock in a mutual fund with a

(from Schedule J, line 10) on line 11.

any securities that are capital assets

reinvestment right.

Note. See section 164(d) for

become worthless during the tax year,

Increase the cost or other basis by

apportionment of taxes on real property

the loss is a loss from the sale or

any expense of sale, such as broker’s

between the seller and purchaser.

exchange of capital assets as of the

fee, commission, and option premium,

last day of the tax year.

Enter taxes accrued during the tax

before making an entry in column (e),

Losses from wash sales. The

year but do not include the following:

unless the REMIC reported net sales

•

REMIC cannot deduct losses from a

Federal income taxes (except the tax

price in column (d).

wash sale of stock or securities. A

on net income from foreclosure

For details, see Pub. 551, Basis of

wash sale occurs if the REMIC acquires

property);

•

Assets.

(by purchase or exchange), or has a

Foreign or U.S. possession income

contract or option to acquire,

taxes;

Schedule J

•

substantially identical stock or

Taxes not imposed on the REMIC; or

•

securities within 6 months before or

Taxes, including state or local sales

Part I—Tax on Net Income from

after the date of the sale or exchange.

taxes, that are paid or incurred in

Prohibited Transactions

See section 860F(d) for details.

connection with an acquisition or

disposition of property. Such taxes

Installment sales. If the REMIC sold

Losses not included. Do not net

must be treated as a part of the cost of

property (except publicly traded stock

losses from prohibited transactions

the acquired property or, in the case of

or securities) at a gain and will receive

against income or gains from prohibited

a disposition, as a reduction in the

any payment in a tax year after the year

transactions in determining the

amount realized on the disposition.

of sale, it must use the installment

amounts to enter on lines 1a through

method and Form 6252, Installment

1d. These losses are not deductible in

Line 12 — Depreciation. See the

Sale Income, unless it elects not to use

computing net income from prohibited

instructions for Form 4562,

the installment method.

transactions.

Depreciation and Amortization, or Pub.

946, How To Depreciate Property, to

If the REMIC wants to elect out of

For purposes of lines 1a and 1d, the

figure the amount of depreciation to

the installment method, it must report

term “prohibited transactions” does not

enter on this line. You must complete

the full amount of the gain on a timely

include any disposition that is required

and attach Form 4562 if the REMIC

filed return (including extensions). If the

to prevent default on a regular interest

-5-

Instructions For Form 1066 - U.s. Real Estate Mortgage Investment Conduit (Remic) Income Tax Return - 2009 Page 5

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