Base Offering Circular - Multifamily 482090 49 less than the income that would have been recognized if the yield on such interest were 110% of the applicable federal rate under section 1274(d) of the Code. If an investor exchanges a Regular Class for several MX Classes and then sells one of such MX Classes, the sale will subject the investor to the coupon stripping rules of section 1286 of the Code.  The investor must allocate its basis in the exchanged Regular Class between the part of the Regular Class underlying the MX Class sold and the part of the Regular Class underlying the MX Classes retained in proportion to their relative fair market values as of the date of such sale.  The investor is treated as purchasing the interest retained for the amount of basis allocated to such interest.  The investor must calculate original issue discount with respect to the retained interest as described above. Although the matter is not free from doubt, an investor that acquires in one transaction a combination of MX Classes that may be exchanged for a Regular Class should be treated as owning the Regular Class. Exchanges of MX Classes and Regular Classes An exchange, as described under “Description of Securities—Modification and Exchange” herein, by a Beneficial Owner of (i) REMIC Securities for MX Securities, (ii) MX Securities for the related REMIC Securities or (iii) MX Securities for other MX Securities will not be a taxable exchange.  Such Beneficial Owner will be treated as continuing to own after the exchange the same combination of interests in the related REMIC Securities that it owned immediately prior to the exchange. Taxation of Foreign Holders of REMIC Securities and MX Securities Regular Securities and MX Securities Interest, including OID, paid on a Regular Security or MX Security to a Non-U.S. Person generally will be treated as “portfolio interest” and, therefore, will not be subject to any United States withholding tax, provided that (i) such interest is not effectively connected with a trade or business in the United States of the Holder, and (ii) the Trustee (or other person who would otherwise be required to withhold tax) is provided with appropriate certification that the beneficial owner of the Security is a Non-U.S. Person (“Foreign Person Certification”).  If Foreign Person Certification is not provided, interest (including OID) paid on such a Security may be subject to either a 30 percent withholding tax or 31 percent backup withholding.  See “Backup Withholding.” Final regulations dealing with withholding tax on income paid to foreign persons, backup withholding and related matters (the “New Withholding Regulations”) were issued by the Treasury Department on October 6, 1997.  The New Withholding Regulations generally attempt to unify certification requirements and modify reliance standards.  The New Withholding Regulations generally are effective for payments made after December 31, 2000, subject to certain transition rules.  Prospective investors are strongly urged to consult their own tax advisors with respect to the New Withholding Regulations.