Source: http://taxtv.com/code/00595-USCODE-2011-title26-subtitleA-chap1-subchapM-partIV-sec860E/
Timestamp: 2017-11-20 05:42:49
Document Index: 695978913

Matched Legal Cases: ['§860', '§860', '§671', '§1006', '§1616', '§1616', '§1616', '§1616', '§1006', '§1006']

IRC §860E. Treatment of income in excess of daily accruals on residual interests - TaxTV.com
IRC §860E. Treatment of income in excess of daily accruals on residual interests
If the holder of any residual interest in a REMIC is an organization subject to the tax imposed by section 1, the excess inclusion of such holder for any taxable year shall be treated as unrelated business taxable income of such holder for purposes of section 1.
The term “excess inclusion” means, with respect to any residual interest in a REMIC for any calendar quarter, the excess (if any) of—
For purposes of this paragraph, the term “Federal long-term rate” means the Federal long-term rate which would have applied to the residual interest under section 1274(d) (determined without regard to paragraph (2) thereof) if it were a debt instrument.
For purposes of this section, the term “disqualified organization” means—
(B) any organization (other than a cooperative described in section 521) which is exempt from tax imposed by this chapter unless such organization is subject to the tax imposed by section 1, and
(ii) the highest rate of tax specified in section 11(b)(1).
For purposes of this paragraph, the term “pass-thru entity” means—
(Added Pub. L. 99– 4, title VI, §671(a), Oct. 22, 1986, 100 Stat. 2311; amended Pub. L. 100–647, title I, §1006(t)(13), (15), (16)(B), (17), (23), (26), (27), Nov. 10, 1988, 102 Stat. 3423, 3426, 3427; Pub. L. 104–188, title I, §§1616(b)(10), 1704(h)(1), Aug. 20, 1996, 110 Stat. 1857, 1881.)
1996—Subsec. (a)(1). Pub. L. 104–188, §1616(b)(10)(A), substituted “The” for “Except as provided in paragraph (2), the”.
Subsec. (a)(2). Pub. L. 104–188, §1616(b)(10)(B), (C), redesignated par. (3) as (2), struck out “, except that paragraph (2) shall be applied separately with respect to each corporation which is a member of such group and to which section 593 applies” after “of this subsection”, and struck out former par. (2) which read as follows: “Exception for certain financial institutions.—Paragraph (1) shall not apply to any organization to which section 593 applies. The Secretary may by regulations provide that the preceding sentence shall not apply where necessary or appropriate to prevent avoidance of tax imposed by this chapter.”
Subsec. (a)(4). Pub. L. 104–188, §1616(b)(10)(B), (D), redesignated par. (6) as (4), struck out at end “The preceding sentence shall not apply to any organization to which section 593 applies, except to the extent provided in regulations prescribed by the Secretary under paragraph (2).”, and struck out former par. (4) which related to certain subsidiaries being treated as single corporations to which section 593 applied.
Subsec. (c)(2)(B). Pub. L. 100–647, §1006(t)(13), (17), substituted “issue price of the residual interest (adjusted for contributions)” for “issue price of residual interest” in introductory text, and in cl. (ii) inserted “(but not below zero)” after “decreased”.
Subsec. (d). Pub. L. 100–647, §1006(t)(23), inserted at end “Rules similar to the rules of the preceding sentence shall apply also in the case of regulated investment companies, common trust funds, and organizations to which part I of subchapter T applies.”
Section 1704(h)(2) of Pub. L. 104–188 provided that: “The amendment made by paragraph (1) [amending this section] shall take effect as if included in the amendments made by section 671 of the Tax Reform Act of 1986 [Pub. L. 99– 4] unless the taxpayer elects to apply such amendment only to taxable years beginning after the date of the enactment of this Act [Aug. 20, 1996].”
Section 1006(t)(16)(D)(ii)–(iv) of Pub. L. 100–647 provided that:
Amendment by section 1006(t)(13), (15), (17), (23), (26), (27) 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– 4, 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.