
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC860B]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
Subchapter M--Regulated Investment Companies and Real Estate Investment 
                                 Trusts
 
            PART IV--REAL ESTATE MORTGAGE INVESTMENT CONDUITS
 
Sec. 860B. Taxation of holders of regular interests


(a) General rule

    In determining the tax under this chapter of any holder of a regular 
interest in a REMIC, such interest (if not otherwise a debt instrument) 
shall be treated as a debt instrument.

(b) Holders must use accrual method

    The amounts includible in gross income with respect to any regular 
interest in a REMIC shall be determined under the accrual method of 
accounting.

(c) Portion of gain treated as ordinary income

    Gain on the disposition of a regular interest shall be treated as 
ordinary income to the extent such gain does not exceed the excess (if 
any) of--
        (1) the amount which would have been includible in the gross 
    income of the taxpayer with respect to such interest if the yield on 
    such interest were 110 percent of the applicable Federal rate (as 
    defined in section 1274(d) without regard to paragraph (2) thereof) 
    as of the beginning of the taxpayer's holding period, over
        (2) the amount actually includible in gross income with respect 
    to such interest by the taxpayer.

(d) Cross reference

            For special rules in determining inclusion of original issue 
        discount on regular interests, see section 1272(a)(6).

(Added Pub. L. 99-514, title VI, Sec. 671(a), Oct. 22, 1986, 100 Stat. 
2309.)

                  Section Referred to in Other Sections

    This section is referred to in section 6049 of this title.
