Base Offering Circular - Multifamily
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Temporary Treasury regulations provide that a Holder of a Residual Security is not
required to treat items on its return consistently with their treatment on the Trust REMICs return
if a Holder owns 100% of the Residual Securities for the entire calendar year. Otherwise, each
Holder of a Residual Security is required to treat items on its return consistently with their
treatment on the REMICs return, unless the Holder of the Residual Security either files a
statement identifying the inconsistency or establishes that the inconsistency resulted from
incorrect information received from the REMIC. The Service may assess a deficiency resulting
from a failure to comply with the consistency requirement without instituting an administrative
proceeding at the REMIC level. A Trust REMIC typically will not register as a tax shelter
pursuant to Code section 6111 because it generally will not have a net loss for any of the first
five taxable years of its existence. Any person that holds a Residual Security as a nominee for
another person may be required to furnish the Trust REMIC, in a manner to be provided in
Treasury regulations, with the name and address of such person and other specified information.
Backup Withholding
Under federal income tax law, a Holder may be subject to backup withholding under
certain circumstances. Backup withholding may apply to a Holder who is a United States person
if the Holder, among other things, (i) fails to furnish his social security number or other taxpayer
identification number (TIN) to the Trustee, (ii) furnishes the Trustee an incorrect TIN, (iii) fails
to report properly interest and dividends, or (iv) under certain circumstances, fails to provide the
Trustee or the Holders securities broker with a certified statement, signed under penalties of
perjury, that the TIN provided to the Trustee is correct and that the Holder is not subject to
backup withholding. Backup withholding may apply, under certain circumstances, to a Holder
who is a Foreign Person if the Holder fails to provide the Trustee or the Holders securities
broker with a Foreign Person Certification. Backup withholding applies to reportable
payments, which include interest payments and principal payments to the extent of accrued
OID, as well as distributions of proceeds from the sale of Regular Securities or Residual
Securities. The backup withholding rate is 31%. Backup withholding, however, does not apply
to payments on a Security made to certain exempt recipients, such as tax-exempt organizations,
and to certain Foreign Persons. Holders should consult their tax advisors for additional
information concerning the potential application of backup withholding to payments received by
them with respect to a Security.
DUE TO THE COMPLEXITY OF THE FEDERAL INCOME TAX RULES
APPLICABLE TO HOLDERS AND THE CONSIDERABLE UNCERTAINTY THAT
EXISTS WITH RESPECT TO MANY ASPECTS OF THOSE RULES, POTENTIAL
INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE
TAX TREATMENT OF THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF
THE SECURITIES.
STATE TAX CONSIDERATIONS
In addition to the federal income tax consequences described in Certain Federal Income
Tax Consequences, potential investors should consider the state income tax consequences of the