Base Offering Circular - Multifamily 482090 46 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 (and any other assets transferred to the Trust REMIC on the Startup Day) equals the aggregate of the issue prices of the regular and residual interests in the Trust REMIC.  That basis is allocated among the Trust REMIC’s assets based on their relative fair market values.  Any market discount that accrues on the mortgage loans underlying the Trust REMIC’s Ginnie Mae Multifamily Certificates will be recognized currently as an item of Trust REMIC ordinary income.  The amount of market discount income to be recognized in any period is determined in a manner generally similar to that used in the determination of OID, as if the mortgage loans had been issued (i) on the date they were acquired by the Trust REMIC and (ii) for a price equal to the Trust REMIC’s initial basis in the mortgage loans.  The Pricing Prepayment Assumptions will be used to compute the yield to maturity of the mortgage loans underlying a Trust REMIC’s Ginnie Mae Multifamily Certificates.  Pooling REMIC Regular Interests are acquired by Issuing REMICs at original issue, and thus the market discount rules do not apply to them. Premium.  Generally, if the basis of a Pooling REMIC or a Single Trust REMIC in the mortgage loans underlying its Ginnie Mae Multifamily Certificates exceeds the unpaid principal 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 percent tax on its net income from any “prohibited transactions” and a 100 percent 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