Base Offering Circular – Multifamily 45 Regulations, the anticipated excess inclusions with respect to a transferred residual interest must be based on (i) both actual prior prepayment experience and the prepayment assumptions used in pricing the related REMIC’s interests and (ii) any required or permitted clean up calls or required qualified liquidation provided for in the REMIC’s organizational documents.  The present value of anticipated excess inclusions is determined using a discount rate equal to the applicable federal rate that would apply to a debt instrument that was issued on the date the Disqualified Organization acquired the residual interest and whose term ends on the close of the last quarter in which excess inclusions are expected to accrue with respect to the residual interest.  Where a transferee is acting as an agent for a Disqualified Organization, the transferee is subject to the one-time tax.  Upon the request of such transferee or the transferor, the REMIC must furnish to the requesting party and to the Service information sufficient to permit the computation of the present value of the anticipated excess inclusions.  For that purpose, the term “agent” includes a broker, nominee, or other middleman.  The transferor of a residual interest (including a Residual Security or interest therein) will not be liable for the one-time tax if the transferee furnishes to the transferor an affidavit that states, under penalties of perjury, that the transferee is not a Disqualified Organization, and, as of the time of the transfer, the transferor does not have actual knowledge that such affidavit is false.  The one-time tax must be paid by April 15th of the year following the calendar year in which the residual interest is transferred to a Disqualified Organization.  The one-time tax may be waived by the Secretary of the Treasury if, upon discovery that a transfer is subject to the one-time tax, the Disqualified Organization promptly disposes of the residual interest and the transferor pays such amounts as the Secretary may require. Third, the Code imposes an annual tax on any pass-through entity (i.e., regulated investment company (“RIC”), REIT, common trust fund, partnership, trust, estate or cooperative described in Code section 1381) that owns a direct or indirect interest in a residual interest (including a Residual Security), if record ownership of an interest in the pass-through entity is held by one or more Disqualified Organizations.  The tax imposed equals the highest corporate rate multiplied by the share of any excess inclusion income of the pass-through entity for the taxable year that is allocable to the interest in the pass-through entity held by Disqualified Organizations.  The same tax applies to a nominee who acquires an interest in a residual interest (including a Residual Security) on behalf of a Disqualified Organization.  For example, a broker that holds an interest in a Residual Security in “street name” for a Disqualified Organization is subject to the tax.  The tax due must be paid by the fifteenth day of the fourth month following the close of the taxable year of the pass-through entity in which the Disqualified Organization is a record Holder.  Any such tax imposed on a pass-through entity would be deductible against that entity’s ordinary income in determining the amount of its required distributions.  In addition, dividends paid by a RIC or a REIT are not considered preferential dividends within the meaning of section 562(c) of the Code solely because the RIC or REIT allocates such tax expense only to the shares held by Disqualified Organizations.  A pass-through entity will not be liable for the annual tax if the record Holder of the interest in the pass-through entity furnishes to the pass- through entity an affidavit that states, under penalties of perjury, that the record Holder is not a Disqualified Organization and the pass-through entity does not have actual knowledge that such affidavit is false. If an “electing large partnership” holds a Residual Security, all interests in the electing large partnership are treated as held by disqualified organizations for purposes of the tax imposed