the holding period for the Residual Securities.  Those financial institutions include banks, mutual savings banks, cooperative banks, domestic building and loan institutions, savings and loan institutions, and similar institutions. Disposition of Residual Securities A Residual Holder will recognize gain or loss on the disposition of his Residual Secur ity equal to the difference between the amount of proceeds (or the fair market value of any property) received and his adjusted basis in the Residual Security.  If the Holder has held the Residual Security for more than the applicable holding period, such  gain or loss generally will be characterized as long-term capital gain or loss.  In the case of banks, Thrift Institutions, and certain other financial institutions, however, gain or loss on the disposition of a Residual Security will be treated as ordinary gain or loss, regardless of the length of the holding period.  See “— Gain or Loss on Disposition” and “—Limitations on Offset or Exemption of REMIC Income— Special Considerations for Certain Types of Investors.” A special version of the wash sale rules will apply to dispositions of Residual Securities.   Under that version, losses on dispositions of Residual Securities generally will be disallowed where, within six months before or after the disposition, the seller of such Securities acquires any residual interest in a REMIC or any interest in a taxable mortgage pool.  Regulations providing for appropriate exceptions to the application of the wash sale rules have been authorized, but have not yet been promulgated. Liquidation of the REMIC A REMIC may liquidate without the imposition of entity-level tax only in a “qualified liquidation.”  A liquidation is considered a qualified liquidation if the REMIC (i) adopts a plan of complete liquidation, (ii) sells all of its non-cash assets within 90 days of the date on which it adopts the plan, and (iii) credits or distributes in liquidation all of the sale proceeds plus its cash (other than amounts retained to meet claims against it) to its Holders within the 90-day period.   Under the REMIC Regulations, a plan of liquidation need not be in any special form.   Furthermore, if a REMIC specifies the first day in the 90-day liquidation period in a statement attached to its final tax return, the REMIC will be considered to have adopted a plan of liquidation on that date. Treatment by the Trust REMIC of Original Issue Discount, Market Discount, and Amortizable Premium Original Issue Discount.  Generally, a Trust REMIC’s deductions for OID expense on its Regular Securities will be determined in the same manner as for determining the OID income of the Holders of such Securities as described in “Tax Treatment of Regular Securities—Original Issue Discount” above, without regard to the de minimis rule described in that section. Market Discount.  In general, a Pooling REMIC or, in the case of a Series involving only a single Trust REMIC, that Trust REMIC (a “Single Trust REMIC”) will be considered to have acquired the mortgage loans underlying its Trust Assets with market discount if the basis of the Trust REMIC in such mortgage loans is exceeded by their adjusted issue prices by more than a statutory de minimis amount.  The Trust REMIC’s aggregate initial basis in such mortgage loans Base Offering Circular – Multifamily 46 RICHMOND 801041v3