Base Offering Circular – Multifamily 50 balances of those mortgage loans, such Trust REMIC will be considered to have acquired such mortgage loans at a premium equal to the amount of such excess.  As stated above, such Trust REMIC’s basis in the mortgage loans underlying its Ginnie Mae Multifamily Certificates will equal the fair market value of such mortgage loans immediately after the transfer to the Trust REMIC or at such time prior to their transfer as is provided in Treasury regulations yet to be issued.  As described above under “Tax Treatment of Regular Securities—Amortizable Premium,” such a Trust REMIC that holds its qualified mortgages as capital assets generally may elect under Code section 171 to amortize premium on the underlying mortgage loans under a constant interest method, to the extent such mortgage loans were originated, or treated as originated, after September 27, 1985, which will include all mortgage loans underlying the Ginnie Mae Multifamily Certificates eligible for inclusion in a Trust.  All Pooling REMIC Regular Interests acquired by an Issuing REMIC will be treated as a single newly issued debt instrument in the hands of the Issuing REMIC, including for purposes of determining the amortization of premium, if any, by the Issuing REMIC. REMIC-Level Taxes A Trust REMIC may be subject to a number of taxes, including a 100% tax on its net income from any “prohibited transactions” and a 100% tax on certain contributions to the Trust REMIC after the closing date.  The imposition of taxes on a Trust REMIC that could affect distributions to Holders is not anticipated. REMIC Qualification The Trust or one or more designated pools of the assets of the Trust will qualify under the Code as a REMIC in which the Regular Securities and Residual Securities will constitute the “regular interests” and “residual interests,” respectively, if a REMIC election is in effect and certain tests concerning (i) the composition of the Trust REMIC’s assets and (ii) the nature of the Holders’ interests in the Trust REMIC are met on a continuing basis.  A loss of REMIC status could have a number of consequences for Holders.  If, as the result of REMIC disqualification, the Trust were treated as an association taxable as a corporation, distributions on the Securities could be recharacterized in part as dividends from a non-includible corporation and in part as returns of capital.  Alternatively, distributions on a Regular Security could continue to be treated as comprised of interest and principal notwithstanding REMIC disqualification, in which case a cash-basis Holder might not be required to continue to recognize interest and market discount with respect to the Security on the accrual basis.  Under the first alternative, a loss of REMIC status would, and under the second alternative, a loss of REMIC status could cause the Securities and the associated distributions not to be qualified assets and income for the various purposes of DB&Ls and REITs described in the last paragraph under “Certain Federal Income Tax Consequences—General” above, although such a loss would not affect the status of the Securities as “government securities” for REITs.  The Securities should continue to qualify as “government securities” for RICs, regardless of whether REMIC status is lost.