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Title 26 — Internal Revenue CodeRelease 119-73

§860D REMIC defined

Title 26 › Subtitle Subtitle A— - Income Taxes › Chapter CHAPTER 1— - NORMAL TAXES AND SURTAXES › Subchapter Subchapter M— - Regulated Investment Companies and Real Estate Investment Trusts › Part PART IV— - REAL ESTATE MORTGAGE INVESTMENT CONDUITS › § 860D

Last updated Apr 6, 2026|Official source

Summary

An entity is a REMIC when it meets several rules. It must choose to be treated as a REMIC for its current year and past years. All ownership interests must be either regular or residual. There can be one (and only one) class of residual interests, and any payments to those interests must be pro rata. By the end of the third month after the startup day and after that, substantially all assets must be qualified mortgages and permitted investments. The tax year must be a calendar year. The entity must have arrangements to keep residual interests out of disqualified organizations and to provide the information needed under section 860E(e). An entity that meets these rules can elect REMIC status on its first-year tax return. The election applies to that year and later years unless the entity stops being a REMIC. If it stops during a year, it is not a REMIC for that year or later years. The IRS can allow relief if the stop was inadvertent, the entity fixes the problem within a reasonable time, and the entity and its holders agree to required tax adjustments.

Full Legal Text

Title 26, §860D

Internal Revenue Code — Source: USLM XML via OLRC

(a)For purposes of this title, the terms “real estate mortgage investment conduit” and “REMIC” mean any entity—
(1)to which an election to be treated as a REMIC applies for the taxable year and all prior taxable years,
(2)all of the interests in which are regular interests or residual interests,
(3)which has 1 (and only 1) class of residual interests (and all distributions, if any, with respect to such interests are pro rata),
(4)as of the close of the 3rd month beginning after the startup day and at all times thereafter, substantially all of the assets of which consist of qualified mortgages and permitted investments,
(5)which has a taxable year which is a calendar year, and
(6)with respect to which there are reasonable arrangements designed to ensure that—
(A)residual interests in such entity are not held by disqualified organizations (as defined in section 860E(e)(5)), and
(B)information necessary for the application of section 860E(e) will be made available by the entity.
(b)(1)An entity (otherwise meeting the requirements of subsection (a)) may elect to be treated as a REMIC for its 1st taxable year. Such an election shall be made on its return for such 1st taxable year. Except as provided in paragraph (2), such an election shall apply to the taxable year for which made and all subsequent taxable years.
(2)(A)If any entity ceases to be a REMIC at any time during the taxable year, such entity shall not be treated as a REMIC for such taxable year or any succeeding taxable year.
(B)If—
(i)an entity ceases to be a REMIC,
(ii)the Secretary determines that such cessation was inadvertent,
(iii)no later than a reasonable time after the discovery of the event resulting in such cessation, steps are taken so that such entity is once more a REMIC, and
(iv)such entity, and each person holding an interest in such entity at any time during the period specified pursuant to this subsection, agrees to make such adjustments (consistent with the treatment of such entity as a REMIC or a C corporation) as may be required by the Secretary with respect to such period,

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

1990—Subsec. (a). Pub. L. 101–508 inserted closing parenthesis before period at end. 1988—Subsec. (a). Pub. L. 100–647, § 1006(t)(19), inserted at end “In the case of a qualified liquidation (as defined in section 860F(a)(4)(A)), paragraph (4) shall not apply during the liquidation period (as defined in section 860F(a)(4)(B).” Subsec. (a)(4). Pub. L. 100–647, § 1006(t)(2)(A)(i), substituted “3rd month beginning after” for “4th month ending after”. Pub. L. 100–647, § 1006(t)(2)(A)(ii), substituted “and at all times thereafter” for “and each quarter ending thereafter”. Subsec. (a)(6). Pub. L. 100–647, § 1006(t)(16)(A), added par. (6).

Statutory Notes and Related Subsidiaries

Effective Date

of 1988 Amendment Pub. L. 100–647, title I, § 1006(t)(2)(B), Nov. 10, 1988, 102 Stat. 3419, provided that: “The amendment made by subparagraph (A)(ii) [amending this section] shall take effect on January 1, 1988.” Pub. L. 100–647, title I, § 1006(t)(16)(D)(i), Nov. 10, 1988, 102 Stat. 3425, provided that: “The

Amendments

made by subparagraph (A) [amending this section] shall apply in the case of any REMIC where the start-up day (as defined in section 860G(a)(9) of the 1986 Code, as in effect on the day before the date of the enactment of this Act [Nov. 10, 1988]) is after March 31, 1988; except that such

Amendments

shall not apply in the case of a REMIC formed pursuant to a binding written contract in effect on such date.” Amendment by section 1006(t)(2)(A)(i), (19) of Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.

Reference

Citations & Metadata

Citation

26 U.S.C. § 860D

Title 26 — Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73