Base Offering Circular - Multifamily 482090 42 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 Class RR Security, all interests in the electing large partnership are treated as held by disqualified organizations for purposes of the tax imposed upon a pass-through entity by section 860E(e) of the Code.  An exception to this tax, otherwise available to a pass-through entity that is furnished certain affidavits by record holders of interests in the entity and that does not know such affidavits are false, is not available to an electing large partnership. The Code and the REMIC Regulations also require that reasonable arrangements be made with respect to each REMIC to enable the REMIC to provide the Treasury and the transferor with information necessary for the application of the one-time tax described above.  Consequently, the applicable Trust Agreement will provide for the Tax Administrator to perform such information services as may be required for the application of the one-time tax.  If a Residual Holder transfers an interest in a Residual Security in violation of the relevant transfer restrictions and triggers the information requirement, the Tax Administrator may charge such Residual Holder a reasonable fee for providing the information. Special Considerations for Certain Types of Investors Dealers in Securities.  Residual Holders that are dealers in securities should be aware that the Service has issued final regulations (the “Mark to Market Regulations”) under section 475 of the Code relating to the requirement that a securities dealer mark to market securities held for sale to customers.  This mark-to-market requirement applies to all securities of a dealer, except to the extent that the dealer has specifically identified a security as held for investment.  The Mark to Market Regulations provide that, for purposes of this mark-to-market requirement, a Residual Security is not treated as a security and thus may not be marked to market.  The Mark to Market Regulations apply to all Residual Securities acquired on or after January 4, 1995. Tax-exempt entities.  Any excess inclusion income with respect to a Residual Security held by a tax-exempt entity, including a qualified profit-sharing, pension, or other employee benefit plan, will be treated as UBTI.  Although the legislative history and statutory provisions imply otherwise, the Treasury conceivably could take the position that, under pre-existing Code provisions, substantially all income on a Residual Security (including non-excess inclusion income) is to be treated as UBTI.  See “—Tax Treatment of Residual Securities—Taxation of Residual Holders.” Individuals and Pass-Through Entities.  A Residual Holder who is an individual, trust, or estate will be able to deduct its allocable share of the fees or expenses relating to servicing the assets assigned to a Trust REMIC or administering the Trust REMIC under section 212 of the