Base Offering Circular - Multifamily 482090 32 The method described in the foregoing paragraph for accounting for Interest Weighted Securities and Non-VRDI Securities is consistent with Code section 1272(a)(6) and the legislative history thereto.  Because of the uncertainty with respect to the treatment of such Securities under the OID Regulations, however, there can be no assurance that the Service will not assert successfully that a method less favorable to Holders will apply.  In view of the complexities and the current uncertainties as to income inclusions with respect to Non-VRDI Securities and Interest Weighted Securities, investors should consult their own tax advisors to determine the appropriate amount and method of income inclusion on such Securities for federal income tax purposes. Market Discount A subsequent purchaser of a Regular Security at a discount from its outstanding principal amount (or, in the case of a Regular Security having OID, its adjusted issue price) will acquire such Security with “market discount.”  The purchaser generally will be required to recognize the market discount (in addition to any OID remaining with respect to the Security) as ordinary income.  A person who purchases a Regular Security at a price lower than the remaining outstanding Deemed Principal Payments but higher than its adjusted issue price does not acquire the Security with market discount, but will be required to report OID, appropriately adjusted to reflect the excess of the price paid over the adjusted issue price.  See “—Tax Treatment of Regular Securities—Original Issue Discount.”  A Regular Security will not be considered to have market discount if the amount of such market discount is de minimis, i.e., less than the product of (i) 0.25% of the remaining principal amount of the Security (or, in the case of a Regular Security having OID, the adjusted issue price of such Security), multiplied by (ii) the WAM of the Security (as that term is defined above in “—Tax Treatment of Regular Securities—Original Issue Discount”) remaining after the date of purchase.  Regardless of whether the subsequent purchaser of a Regular Security with more than a de minimis amount of market discount is a cash-basis or an accrual-basis taxpayer, market discount generally will be taken into income as principal payments (including, in the case of a Regular Security having OID, any Deemed Principal Payments) are received, in an amount equal to the lesser of (i) the amount of the principal payment received or (ii) the amount of market discount that has “accrued” (as described below), but that has not yet been included in income.  The purchaser may make an election, which generally applies to all market discount instruments acquired by the purchaser in the taxable year of election or thereafter, to recognize market discount currently on an uncapped accrual basis (the “Current Recognition Election”).  In addition, the purchaser may make a Constant Yield Election with respect to a Regular Security purchased with market discount.  See “—Tax Treatment of Regular Securities—Original Issue Discount.” The relevant legislative history indicates that, until the Treasury promulgates applicable regulations, the purchaser of a Regular Security with market discount generally may elect to accrue the market discount either:  (i) on the basis of a constant interest rate; (ii) in the case of a Regular Security not issued with OID, in the ratio of stated interest payable in the relevant period to the total stated interest remaining to be paid from the beginning of such period; or (iii) in the case of a Regular Security issued with OID, in the ratio of OID accrued for the relevant period to the total remaining OID at the beginning of such period.  Regardless of which computation