Skip to main content
Find a Lawyer

Code of Federal Regulations Title 26. Internal Revenue § 26.1.860C–1 Taxation of holders of residual interests

Current as of October 02, 2022 | Updated by FindLaw Staff

(a) Pass-thru of income or loss. Any holder of a residual interest in a REMIC must take into account the holder's daily portion of the taxable income or net loss of the REMIC for each day during the taxable year on which the holder owned the residual interest.

(b) Adjustments to basis of residual interests—(1) Increase in basis. A holder's basis in a residual interest is increased by—

(i) The daily portions of taxable income taken into account by that holder under section 860C(a) with respect to that interest;  and

(ii) The amount of any contribution described in section 860G(d)(2) made by that holder.

(2) Decrease in basis. A holder's basis in a residual interest is reduced (but not below zero) by—

(i) First, the amount of any cash or the fair market value of any property distributed to that holder with respect to that interest;  and

(ii) Second, the daily portions of net loss of the REMIC taken into account under section 860C(a) by that holder with respect to that interest.

(3) Adjustments made before disposition. If any person disposes of a residual interest, the adjustments to basis prescribed in paragraph (b) (1) and (2) of this section are deemed to occur immediately before the disposition.

(c) Counting conventions. For purposes of determining the daily portion of REMIC taxable income or net loss under section 860C(a)(2), any reasonable convention may be used. An example of a reasonable convention is “30 days per month/90 days per quarter/360 days per year.”

(d) For rules on the proper accounting for income from inducement fees, see § 1.446–6.

Back to chapter list
Previous part of code Next part of code
Back to chapter list

Cite this article: FindLaw.com - Code of Federal Regulations Title 26. Internal Revenue § 26.1.860C–1 Taxation of holders of residual interests - last updated October 02, 2022 | https://codes.findlaw.com/cfr/title-26-internal-revenue/cfr-sect-26-1-860c-1/

Read this complete Code of Federal Regulations Title 26. Internal Revenue § 26.1.860C–1 Taxation of holders of residual interests on Westlaw

FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. Please verify the status of the code you are researching with the state legislature or via Westlaw before relying on it for your legal needs.

Was this helpful?

Search all Codes

Welcome to FindLaw's Cases & Codes

A free source of state and federal court opinions, state laws, and the United States Code. For more information about the legal concepts addressed by these cases and statutes, visit FindLaw's Learn About the Law.

Go to Learn About the Law

Latest Blog Posts

For Legal Professionals

Learn About the Law

Get help with your legal needs

FindLaw’s Learn About the Law features thousands of informational articles to help you understand your options. And if you’re ready to hire an attorney, find one in your area who can help.

Go to Learn About the Law

Need to find an attorney?

Search our directory by legal issue

Enter information in one or both fields (Required)

    More Options
    Copied to clipboard