Instructions for Form 1066

2025

Instructions for Form 1066

U.S. Real Estate Mortgage Investment Conduit

(REMIC) Income Tax Return

Section references are to the Internal Revenue Code

unless otherwise noted.

Future Developments

For the latest information about developments related to

Form 1066 and its instructions, such as legislation

enacted after they were published, go to IRS.gov/

Form1066.

What’s New

Increased failure-to-file penalty. The minimum penalty

under section 6651(a) for the failure to file Form 1066

within 60 days of the due date has increased to the

smaller of the tax due or $525. The penalty under section

6698 that the IRS may charge when no tax is due has

increased to $255 for each person who was a residual

interest holder in the REMIC at any time during the year

for each month or part of a month the return is late, for up

to 12 months. For more information, see Late filing

penalty, later.

Direct deposit. If you have access to U.S. banking

services or electronic payment systems, you should use

direct deposit for any refunds by completing Section II,

lines 4b, 4c, and 4d.

Reminders

Bipartisan Budget Act. The Bipartisan Budget Act of

2015 (BBA) created a new centralized partnership audit

regime that applies to a REMIC for tax years beginning

after 2017. Under the centralized partnership audit

regime, any adjustments to the partnership-related items

of a REMIC are determined at the REMIC level.

Partnership representative (PR). Under the centralized

partnership audit regime, a REMIC is required to

designate a PR if it had more than one residual interest

holder at any time during the tax year and it didn’t elect out

of the centralized partnership audit regime. The PR will

have the sole authority to act on behalf of the REMIC

under the centralized partnership audit regime. The

person designated by the REMIC as the PR must have a

substantial presence in the United States. For more

information, see Designation of Partnership

Representative, later.

Total assets at end of the tax year. If there are no

assets at the end of the year enter -0-.

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can help bring these children home by looking at the

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(1-800-843-5678) if you recognize a child.

How To Get Forms and Publications

Internet. You can access the IRS website at IRS.gov 24

hours a day, 7 days a week to:

• Download forms, including talking tax forms,

instructions, and publications;

• Use the online Internal Revenue Code, regulations, or

other official guidance;

• Get information on starting and operating a small

business;

• Order IRS products online;

• Research your tax questions online;

• Search publications online by topic or keyword;

• View Internal Revenue Bulletins (IRBs) published in the

last few years; and

• Sign up to receive local and national tax news by email.

General Instructions

Purpose of Form

File Form 1066 to report the income, deductions, and

gains and losses from the operation of a REMIC. In

addition, the form is filed by the REMIC to report and pay

the taxes on net income from prohibited transactions, net

income from foreclosure property, and contributions after

the startup day.

Who Must File

An entity must file Form 1066 if it elected to be treated as

a REMIC for its first tax year (and the election is still in

effect) and it meets the section 860D(a) requirements

listed below.

A REMIC is any entity that:

• Elects to be treated as a REMIC for the tax year and all

prior tax years;

• All of the interests are regular interests or residual

interests;

• Has one (and only one) class of residual interests and

all distributions, if any, with respect to such interests are

pro rata;

• Substantially all of the assets consist of qualified

mortgages and permitted investments as of the close of

the third month beginning after the startup day (defined in

the instructions for Item B—Date REMIC started, later)

and at all times thereafter;

• Has a calendar tax year; and

• For which reasonable arrangements have been

designed to ensure that residual interests aren’t held by

Instructions for Form 1066 (2025) Catalog Number 64231R

Department of the Treasury Internal Revenue Service www.irs.gov

disqualified organizations (as defined in section 860E(e)

(5)), and information needed to apply section 860E(e) will

be made available by the entity.

Caution: The last item in the above list doesn’t apply to

REMICs with a startup day before April 1, 1988 (or those

formed under a binding contract in effect on March 31,

1988).

See section 860G for definitions and special rules. See

section 860D(a) regarding qualification as a REMIC

during a qualified liquidation.

Making the Election

The election to be treated as a REMIC is made by timely

filing, for the first tax year of its existence, a Form 1066

and having it signed by an authorized person. Once the

election is made, it stays in effect for all years until it is

terminated.

First Tax Year

For the first tax year of a REMIC’s existence, the REMIC

must furnish the following in a separate statement

attached to the REMIC’s initial return.

• Information concerning the terms of the regular

interests and the designated residual interest of the

REMIC, or a copy of the offering circular or prospectus

containing such information.

• A description of the prepayment and reinvestment

assumptions made in accordance with section 1272(a)(6)

and its regulations, including documentation supporting

the selection of the prepayment assumption.

Termination of Election

If the entity ceased to qualify as a REMIC under the

requirements of section 860D(a) in 2025, the election to

be a REMIC is terminated for 2025 and all future years.

For 2025 and all future years, you must file the tax form for

similarly organized entities (corporations, partnerships,

trusts, etc.).

When To File

Generally, REMICs must file the 2025 Form 1066 by

March 15, 2026. However, if the entity will file its final

return in 2025, Form 1066 is due by the 15th day of the

3rd month following the date the REMIC ceased to exist.

If you need more time to file Form 1066, file Form 7004,

Application for Automatic Extension of Time To File

Certain Business Income Tax, Information, and Other

Returns, to request an automatic extension. You must file

Form 7004 by the regular due date of Form 1066.

Period Covered

File the 2025 return for:

1. Calendar year 2025;

2. Short tax years beginning and ending in 2025; or

3. Short tax years beginning and ending in 2026, if the

2026 Form 1066 isn’t available by the time the REMIC is

required to file its 2026 return. Even though the REMIC is

filing the 2026 tax return on a 2025 Form 1066, any tax

law changes effective after December 31, 2025, have to

be applied on the tax return.

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Caution: In the case of (2) or (3) above, fill in the dates

for the short tax year at the top of the form.

Private Delivery Services (PDSs)

REMICs can use certain PDSs designated by the IRS to

meet the “timely mailing as timely filing” rule for tax

returns. Go to IRS.gov/PDS for the current list of PDSs.

The PDS can tell you how to get written proof of the

mailing date.

For the IRS mailing address to use if you’re using a

PDS, go to IRS.gov/PDSstreetAddresses.

Caution: PDSs can’t deliver items to P.O. boxes. You

must use the U.S. Postal Service to mail any item to an

IRS P.O. box address.

Where To File

If the REMIC’s principal business, office, or agency is

located in the United States, then file the return at:

Department of the Treasury

Internal Revenue Service

Ogden, UT 84201-0007

If the REMIC’s principal business, office, or agency is

located in a foreign country or U.S. territory, then file the

return at:

Internal Revenue Service

P.O. Box 409101

Ogden, UT 84409

Accounting Method

A REMIC must compute its taxable income (or net loss)

using the accrual method of accounting. See section

860C(b). For more information about the accrual method

of accounting, see Pub. 538.

Rounding Off to Whole Dollars

The REMIC may round off cents to whole dollars on its

returns and schedules. If the REMIC does round to whole

dollars, it must round all amounts. To round, drop amounts

under 50 cents and increase amounts from 50 to 99 cents

to the next dollar (for example, $1.39 becomes $1 and

$2.50 becomes $3).

If two or more amounts must be added to figure the

amount on a line, include cents when adding the amounts

and round off only the total.

Recordkeeping

The REMIC’s records must be kept as long as their

contents may be material in the administration of any

Internal Revenue law. Copies of the filed tax returns

should also be kept as part of the REMIC’s records. See

Pub. 583, Starting a Business and Keeping Records, for

more information.

Final Return

If the REMIC ceases to exist during the year, check the

box on Form 1066, page 1, item D(1).

Instructions for Form 1066 (2025)

The box on Schedule Q (Form 1066), item E(1), should

also be checked to indicate when the schedule is for the

final quarter of the year.

Amended Return or Administrative

Adjustment Request (AAR)

If the REMIC files its return and later becomes aware of

changes it must make to income, deductions, or other

items, the REMIC should then file a Form 1065-X,

Amended Return or AAR.

REMICs not subject to BBA that are filing an amended

return must file amended Schedules Q with Form 1065-X

and furnish the amended Schedules Q to the residual

interest holders. If the REMIC is subject to BBA and is

filing an AAR, it must file and furnish Forms 8986 to the

residual interest holders, and not Schedules Q, if the

adjustments result in an imputed underpayment (IU) and

the REMIC is making an election under section 6227(b)(2)

to have the adjustments taken into account by the

reviewed year residual interest holders, or if the

adjustments do not result in an IU.

If the REMIC’s federal return is changed for any reason,

it may affect its state return. This would include changes

made as a result of an examination of the REMIC’s return

by the IRS. Contact the state tax agency where the state

return is filed for more information.

Assembling the Return

If you need more space to report items shown on the

forms or schedules, attach separate sheets reporting the

items. Use the same size and format as on the printed

forms. But show the totals on the printed forms. Be sure to

enter the REMIC’s name and employer identification

number (EIN) on each sheet.

You must complete every applicable entry space on

Form 1066. If you attach statements, don’t enter “See

Attached” instead of completing the entry spaces on this

form.

Other Forms and Returns That May

Be Required

Form 1096, Annual Summary and Transmittal of U.S.

Information Returns. Use this form to summarize and

send information returns to the IRS.

Form 1098, Mortgage Interest Statement. This form is

used to report the receipt from any individual of $600 or

more of mortgage interest and points in the course of the

REMIC’s trade or business.

Forms 1099-A, B, C, INT, LTC, MISC, NEC, OID, R, S,

and SA. Use these information returns to report

acquisitions or abandonments of secured property;

proceeds from broker and barter exchange transactions;

cancellation of debt; interest income; certain payments

made under a long-term care insurance contract and

certain accelerated death benefits; miscellaneous

information; nonemployee compensation; original issue

discount; distributions from pensions, annuities,

retirement or profit-sharing plans, individual retirement

arrangements (IRAs), insurance contracts, etc.; proceeds

from real estate transactions; and distributions from an

Instructions for Form 1066 (2025)

HSA, Archer MSA, or Medicare Advantage MSA. Also,

use these returns to report amounts that were received as

a nominee on behalf of another person.

Generally, a REMIC must file Forms 1099-INT and

1099-OID, as appropriate, to report accrued income of

$10 or more of regular interest holders. See Regulations

section 1.6049-7. Also, every REMIC must file Forms

1099-MISC if it makes payments of rents, commissions, or

other fixed or determinable income (see section 6041)

totaling $600 or more to any one person in the course of

its trade or business during the calendar year.

For more details, see the General Instructions for

Certain Information Returns.

Form 8275, Disclosure Statement; and Form 8275-R,

Regulation Disclosure Statement. Use these forms to

disclose items or positions taken on a tax return that aren’t

otherwise adequately disclosed on the return or that are

contrary to Treasury regulations (to avoid parts of the

accuracy-related penalty or certain preparer penalties).

Form 8300, Report of Cash Payments Over $10,000

Received in a Trade or Business. Generally, this form is

used to report the receipt of more than $10,000 in cash or

foreign currency in one transaction or a series of related

transactions.

Form 8811, Information Return for Real Estate Mortgage Investment Conduits (REMICs) and Issuers of

Collateralized Debt Obligations. A REMIC uses this

form to provide the information required by Regulations

section 1.6049-7(b)(1)(ii). This information will be

published in Pub. 938, Real Estate Mortgage Investment

Conduits (REMICs) Reporting Information. This

publication contains a directory of REMICs.

Pub. 938 isn’t printed. Instead, it is available on the IRS

website. For more information about Pub. 938, go to

IRS.gov/Pub938.

Form 8822-B, Change of Address or Responsible

Party—Business. This form is used to inform the IRS of

a new REMIC address if the change is made after filing

Form 1066.

Payment of Tax Due

The REMIC must pay the tax due (page 1, Section II,

line 3) in full by the 15th day of the 3rd month following the

end of the tax year.

Electronic deposit requirement. REMICs must use

electronic funds transfer (EFT) to make all federal tax

deposits (such as deposits of employment tax, excise tax,

and income tax). Generally, an EFT is made using the

Electronic Federal Tax Payment System (EFTPS). If you

don’t want to use EFTPS, you can arrange for your tax

professional, financial institution, payroll service, or other

trusted third party to make electronic deposits on your

behalf.

To get more information about EFTPS or to enroll in

EFTPS, go to EFTPS.gov or call 800-555-4477. Additional

information about EFTPS is also available in Pub. 966.

Same-day wire payment option. If the REMIC fails to

submit a deposit transaction on EFTPS by 8:00 p.m.

Eastern time the day before the date a deposit is due, it

can still make its deposit on time by using the Federal Tax

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Collection Service (FTCS) to make a same-day wire

payment. To use the same-day wire payment method, the

REMIC will need to make arrangements with its financial

institution ahead of time. Please check with the financial

institution regarding availability, deadlines, and costs.

Financial institutions may charge a fee for payments made

this way. To learn more about the information required by a

financial institution to make a same-day wire payment, go

to IRS.gov/SameDayWire.

Interest and Penalties

Interest. Interest is charged on taxes not paid by the due

date, even if an extension of time to file is granted. Interest

is also charged on penalties imposed for failure to file,

negligence, fraud, substantial valuation misstatements,

substantial understatements of tax, and reportable

transaction understatements from the due date (including

extensions) to the date of payment. The interest charge is

figured at a rate determined under section 6621.

Late filing penalty. A penalty may be charged if the

return is filed after the due date (including extensions) or

the return doesn’t show all the information required,

unless each failure is due to reasonable cause and not

due to willful neglect.

If you receive a notice about a penalty after you file this

return, reply to the notice with an explanation of why the

return was late. We will determine if you meet the

reasonable-cause criteria. Don’t attach an explanation

when you file your return.

If taxes are due, we will charge a section 6651 penalty

of 5% of the unpaid tax for each month or part of a month

the return is late, up to a maximum of 25% of the unpaid

tax; or, if the return is 60 days or more late, $525 or the

balance of the tax due on the return, whichever is smaller.

If no tax is due, we may charge a section 6698 penalty of

$255 for each person who was a residual interest holder in

the REMIC at any time during the year for each month or

part of a month the return is late, for up to 12 months.

Although we can charge both the section 6651 and

section 6698 penalties when taxes are due, we will

generally charge only one of the penalties, whichever is

greater.

Late payment penalty. The penalty for not paying the

tax when due is usually 1/2 of 1% of the unpaid tax for

each month or part of a month the tax is unpaid. The

penalty can’t exceed 25% of the unpaid tax. The penalty

won’t be charged if you can show reasonable cause for

not paying on time.

Other penalties. Penalties can also be imposed for

negligence, substantial understatements of tax, reportable

transaction understatements, and fraud. See sections

6662, 6662A, and 6663.

Contributions to the REMIC

Generally, no gain or loss is recognized by the REMIC or

any of the regular or residual interest holders when

property is transferred to the REMIC in exchange for an

interest in the REMIC. The adjusted basis of the interest

received equals the adjusted basis of the property

transferred to the REMIC.

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The basis to the REMIC of property transferred by a

regular or residual interest holder is its fair market value

immediately after its transfer.

If the transferor holds a regular interest and if the issue

price of the regular interest is more than its adjusted basis,

the excess is included in income by the regular interest

holder for the applicable tax years as if the excess were

market discount on a bond and the holder had made an

election under section 1278(b) to include this market

discount currently. If the transferor holds a residual interest

and if the issue price of the residual interest is more than

its adjusted basis, the excess is amortized and included in

the residual interest holder’s income ratably over the

anticipated weighted average life of the REMIC (as

defined in Regulations section 1.860E-1(a)(3)(iv)).

If the transferor holds a regular interest and if the

adjusted basis of the regular interest is more than its issue

price, the regular interest holder treats the excess as

amortizable bond premium subject to the rules of section

171. If the transferor holds a residual interest and if the

adjusted basis of the residual interest is more than its

issue price, the excess is deductible ratably over the

anticipated weighted average life of the REMIC (as

defined in Regulations section 1.860E-1(a)(3)(iv)).

Payments Subject to Withholding at

Source

If there are any nonresident alien individuals, foreign

partnerships, or foreign corporations as regular interest

holders or residual interest holders, and the REMIC has

items of gross income from sources within the United

States (see sections 861 through 865), see Form 1042,

Annual Withholding Tax Return for U.S. Source Income of

Foreign Persons.

Who Must Sign

Startup day after November 9, 1988. For a REMIC with

a startup day after November 9, 1988, Form 1066 may be

signed by any person who could sign the return of the

entity in the absence of the REMIC election. Thus, the

return of a REMIC that is a corporation or trust would be

signed by a corporate officer or a trustee, respectively. For

REMICs with only segregated pools of assets, the return

would be signed by any person who could sign the return

of the entity owning the assets of the REMIC under

applicable state law.

Paid preparer’s information. If someone is paid to

prepare the return, the preparer must sign the return and

complete the “Paid Preparer Use Only” area.

The paid preparer must:

• Have a valid Preparer Tax Identification Number (PTIN),

• Complete the required preparer information,

• Sign the return in the space provided for the preparer’s

signature, and

• Give the REMIC a copy of the return.

Note: A paid preparer may sign original returns, amended

returns, or requests for filing extensions by rubber stamp,

mechanical device, or computer software program.

Instructions for Form 1066 (2025)

Paid Preparer Authorization

If the REMIC wants to allow the IRS to discuss its 2025 tax

return with the paid preparer who signed it, check the

“Yes” box in the signature area of the return. This

authorization applies only to the individual whose

signature appears in the “Paid Preparer Use Only” section

of the REMIC’s return. It doesn’t apply to the firm, if any,

shown in that section.

If the “Yes” box is checked, the REMIC is authorizing

the IRS to call the paid preparer to answer any questions

that may arise during the processing of its return. The

REMIC is also authorizing the paid preparer to:

• Give the IRS any information that is missing from the

return;

• Call the IRS for information about the processing of the

return or the status of any related refund or payment(s);

and

• Respond to certain IRS notices that the REMIC has

shared with the preparer about math errors, offsets, and

return preparation.

The REMIC isn’t authorizing the paid preparer to

receive any refund check, bind the REMIC to anything

(including any additional tax liability), or otherwise

represent the REMIC before the IRS.

The authorization can’t be revoked. However, the

authorization will automatically end no later than the due

date (excluding extensions) for filing the REMIC’s 2026 tax

return. If the REMIC wants to expand the paid preparer’s

authorization or revoke the authorization before it ends,

see Pub. 947, Practice Before the IRS and Power of

Attorney.

Specific Instructions

General Information

Name, address, and EIN. Enter the REMIC’s legal name

and address on the appropriate lines. Include the suite,

room, or other unit number after the street address. If the

Post Office doesn’t deliver mail to the street address and

the REMIC has a P.O. box, show the box number instead.

If the REMIC receives its mail in care of a third party (such

as an accountant or attorney), enter on the street address

line “C/O” followed by the third party’s name and street

address or P.O. box. If the REMIC has changed its

address since it last filed a return (including a change to

an “in care of” address), check the box for item D(3),

Address change.

Note: If a change in address or responsible party occurs

after the return is filed, use Form 8822-B to notify the IRS

of the change.

Enter the REMIC’s EIN on Form 1066, page 1, item A. If

the REMIC doesn’t have its own EIN, it must apply for one.

A REMIC may apply for an EIN by one of the methods

discussed below.

• Online by going to IRS.gov/EIN. The EIN is issued

immediately once the application information is validated.

• By mailing or faxing Form SS-4 to the IRS.

If the REMIC hasn’t received its EIN by the time the return

is due, write “Applied for” in the space for the EIN. For

more details, see Pub. 583.

Instructions for Form 1066 (2025)

Item B—Date REMIC started. Enter the “startup day”

selected by the REMIC.

The startup day is the day on which the REMIC issued

all of its regular and residual interests. However, a sponsor

may contribute property to a REMIC in exchange for

regular and residual interests over any period of 10

consecutive days, and the REMIC may designate any 1 of

those 10 days as the startup day. The day so designated

is then the startup day, and all interests are treated as

issued on that day.

Item C—Total assets at end of tax year. Enter the total

assets of the REMIC. If there are no assets at the end of

the tax year, enter zero.

Section I

Income—(Lines 1 Through 6)

Line 1—Taxable interest. Enter the total taxable

interest. Taxable interest is interest that is included in

ordinary income from all sources except interest exempt

from tax and interest on tax-free covenant bonds. You may

elect to reduce the amount of interest accrued on taxable

bonds by the amount of amortizable bond premium on

those bonds attributable to the current tax year. See

sections 171(c) and 171(e) for details.

Line 2—Accrued market discount under section

860C(b)(1)(B). Enter the amount of market discount

attributable to the current tax year determined on the basis

of a constant interest rate under the rules of section

1276(b)(2).

Line 4—Ordinary gain or (loss). Enter the net gain or

(loss) from Form 4797, Sales of Business Property, Part II.

Line 5—Other income. Attach a statement listing by

type and amount any other taxable income not reported

on lines 1 through 4. If there is only one item of other

income, describe it in parentheses to the left of the entry

space on line 5 instead of attaching a statement.

If the REMIC issued regular interests at a premium, the

net amount of the premium is income that must be

prorated over the term of these interests. Include this

income on line 5.

Generally, cancellation of REMIC debt (for example,

cancellation of unpaid principal and accrued but unpaid

interest owed to a REMIC regular interest holder) should

be recognized as income and reported on line 5. Attach a

supporting statement to line 5 to separately disclose

income from cancellation of REMIC debt.

For REMICs with a startup date before November 12,

1991, enter any capital gain or (loss) on line 5. The

REMIC can use the Schedule D, included in the 2011

Form 1066, or a statement showing the same information

as it appears on the Schedule D, included in the 2011

Form 1066, to figure the capital gain (loss). Attach the

schedule or statement to Form 1066.

Deductions—(Lines 7 Through 14)

Include only deductible amounts on lines 7 through 14. A

REMIC isn’t allowed any of the following deductions in

computing its taxable income.

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• The net operating loss deduction.

• The deduction for taxes paid or accrued to foreign

countries and U.S. territories.

• The deduction for charitable contributions.

• The deduction for depletion under section 611 for oil

and gas wells.

• Losses or deductions allocable to prohibited

transactions.

Line 9—Amount accrued to regular interest holders

in the REMIC that is deductible as interest. Regular

interests in the REMIC are treated as indebtedness for

federal income tax purposes. Enter the amount of interest,

including original issue discount, accruing to regular

interest holders for the tax year. Don’t deduct any amounts

paid or accrued for residual interests in the REMIC.

Line 10—Other interest. Don’t include interest

deducted on line 9 or interest on indebtedness incurred or

continued to purchase or carry obligations on which the

interest is wholly exempt from income tax. You may elect

to include amortization of bond premium on taxable bonds

acquired before 1988 unless you elected to offset

amortizable bond premium against the interest accrued on

the bond (see the Section I, line 1, instructions). Don’t

include any amount attributable to a tax-exempt bond.

Line 11—Taxes. If you have to pay tax on net income

from foreclosure property, you should include this tax

(from Schedule J, line 10) on line 11 of Form 1066.

Note: See section 164(d) for apportionment of taxes on

real property between the seller and purchaser.

Enter taxes accrued during the tax year but don’t

include the following.

• Federal income taxes (except the tax on net income

from foreclosure property).

• Foreign or U.S. territory income taxes.

• Taxes not imposed on the REMIC.

• Taxes, including state or local sales taxes, that are paid

or incurred in connection with an acquisition or disposition

of property. Such taxes must be treated as a part of the

cost of the acquired property or, in the case of a

disposition, as a reduction in the amount realized on the

disposition.

Line 12—Depreciation. See the Instructions for Form

4562, Depreciation and Amortization, or Pub. 946, How To

Depreciate Property, to figure the amount of depreciation

to enter on this line. You must complete and attach Form

4562 if the REMIC placed property in service during 2025,

claims a section 179 expense deduction, or claims

depreciation on any car or other listed property.

Line 13—Other deductions. Attach a statement listing

by type and amount any other allowable deductions (such

as bad debt deductions) for which no line is provided on

Form 1066. If there is only one item of other deductions,

describe it in parentheses to the left of the entry on line 13

instead of attaching a statement.

Section II

Line 3—Tax due. If you have tax due, see Payment of

Tax Due, earlier, for information on how to make a

payment.

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Line 4—Overpayment. To the extent permitted by law,

the Secretary of the Treasury will cease issuing paper

checks for all federal disbursements. Direct deposit is

available for this form. If there is an overpayment when

filing your return, complete lines 4b, 4c, and 4d to input

your direct deposit information. If you qualify for an

exception, an alternative payment option (paper check)

may be permitted. See Non-electronic federal

disbursement exceptions, later for more information.

Why use direct deposit? You get your refund faster by

direct deposit than you do by check. Payment is more

secure. There is no check that can get lost or stolen. It is

more convenient. You don't have to make a trip to the bank

to deposit your check. It saves tax dollars. It costs the

government less to refund by direct deposit. It's proven

itself. Nearly 90% of social security and veterans benefits

are sent electronically using direct deposit.

Account must be in your name. Don't request a

deposit of your refund to an account that isn't in your

name. The number of refunds that can be directly

deposited to a single account or prepaid debit card is

limited to three a year. After this limit is reached, paper

checks will be sent instead. Learn more at IRS.gov/

DepositLimit.

Line 4a. If line 4a is under $1, we will send a refund only

on written request.

Line 4b. The routing number must be nine digits. The first

two digits must be 01 through 12 or 21 through 32. Ask

your financial institution for the correct routing number to

enter on line 4b if:

• The routing number on a deposit slip is different from

the routing number on your checks,

• Your deposit is to a savings account that doesn't allow

you to write checks, or

• Your checks state they are payable through a financial

institution different from the one at which you have your

checking account.

Line 4c. Check the appropriate box for the type of

account. Don't check more than one box. You must check

the correct box to ensure your deposit is accepted.

Line 4d. The account number can be up to 17 characters

(both numbers and letters). Include hyphens but omit

spaces and special symbols. Enter the number from left to

right and leave any unused boxes blank. Don't include the

check number.

If the direct deposit to your account is different from the

amount you expected, you will receive an explanation in

the mail about 2 weeks after your refund is deposited.

Reasons your direct deposit will be rejected. If any

of the following apply, your direct deposit request will be

rejected and a check will be sent instead.

• You're asking to have a joint refund deposited to an

individual account, and your financial institution(s) won't

allow this. The IRS isn't responsible if a financial institution

rejects a direct deposit.

• The name on your account doesn't match the name on

the refund, and your financial institution(s) won't allow a

refund to be deposited unless the name on the refund

matches the name on the account.

• Three direct deposits of tax refunds have already been

made to the same account or prepaid debit card.

Instructions for Form 1066 (2025)

• You haven't given a valid account number.

• Any numbers or letters on lines 4b through 4d are

crossed out or whited out.

Note: The IRS isn't responsible for a lost refund if you

enter the wrong account information. Check with your

financial institution to get the correct routing and account

numbers and to make sure your direct deposit will be

accepted.

Non-electronic federal disbursement exceptions. If

you qualify for one of the exceptions below, a paper check

may still be permitted as a federal disbursement option.

1. Individuals who don't have access to banking

services or electronic payment systems.

2. Certain emergency payments where electronic

disbursement would cause undue hardship, as

contemplated in 31 CFR Part 208.

3. National security- or law enforcement-related

activities where non-EFT transactions are necessary or

desirable.

4. Other circumstances as determined by the

Secretary of the Treasury, as reflected in regulations or

other guidance.

Note: If you don't qualify for one of the exceptions above,

the direct deposit information must be entered on lines 4b,

4c, and 4d. If you do qualify for an exception above, leave

lines 4b, 4c, and 4d blank.

Schedule J

Part I—Tax on Net Income From Prohibited

Transactions

Losses not included. Don’t net losses from prohibited

transactions against income or gains from prohibited

transactions in determining the amounts to enter on lines

1a through 1d. These losses aren’t deductible in

computing net income from prohibited transactions.

For purposes of lines 1a and 1d, the term “prohibited

transactions” doesn’t include any disposition that is

required to prevent default on a regular interest where the

threatened default resulted from a default on one or more

qualified mortgages, or to facilitate a clean-up call. A

clean-up call is the redemption of a class of regular

interests when, by reason of prior payments with respect

to those interests, the administrative costs associated with

servicing that class outweigh the benefits of maintaining

the class. It doesn’t include the redemption of a class in

order to profit from a change in interest rates.

Line 1a—Gain from certain dispositions of qualified

mortgages. Enter the amount of gain from the

disposition of any qualified mortgage transferred to the

REMIC other than a disposition from:

• The substitution of a qualified replacement mortgage for

a qualified mortgage or the repurchase in lieu of

substitution of a defective obligation;

• The foreclosure, default, or imminent default of the

mortgage;

• The bankruptcy or insolvency of the REMIC; or

• A qualified liquidation.

See section 860F(a) for details and exceptions.

Instructions for Form 1066 (2025)

Line 1b—Income from nonpermitted assets. Enter the

amount of any income received or accrued during the year

attributable to any asset other than a qualified mortgage

or permitted investment. See section 860G(a) for

definitions.

Line 1c—Compensation for services. Enter the receipt

by the REMIC of any amount representing a fee or other

compensation for services.

Line 1d—Gain from the disposition of cash flow investments (except from a qualified liquidation). Enter

the amount of gain from the disposition of any cash flow

investment except from a qualified liquidation. A cash flow

investment is any investment of amounts received under

qualified mortgages for a temporary period (not more than

13 months) before distribution to holders of interests in the

REMIC. See section 860F(a)(4) for the definition of a

qualified liquidation.

Part II—Tax on Net Income From Foreclosure

Property

For a definition of foreclosure property, see the

instructions for Schedule L, line 1c, later. Net income from

foreclosure property must also be included in the

computation of taxable income (or net loss) shown on

Form 1066, page 1, Section I.

Line 6—Gross income from foreclosure property.

Don’t include on line 6 amounts described in section

856(c)(3)(A), (B), (C), (D), (E), or (G).

Line 8—Deductions. Only those expenses that are

directly connected with the production of the income

shown on line 7 may be deducted to figure net income

from foreclosure property. Allowable deductions include

depreciation on foreclosure property, interest accrued on

debt of the REMIC attributable to the carrying of

foreclosure property, real estate taxes, and fees charged

by an independent contractor to manage foreclosure

property. Don’t deduct general overhead and

administrative expenses.

Line 10—Tax on net income from foreclosure property. The REMIC is allowed a deduction for the amount of

tax shown on this line. Include this amount in computing

the deduction for taxes entered on Form 1066, page 1,

Section I, line 11.

Part III—Tax on Contributions After the Startup

Day

Don’t complete this part if the startup day was before July

1, 1987. For this purpose, startup day means any day

selected by a REMIC that is on or before the first day on

which interests in the REMIC are issued.

Line 11—Tax. Enter the amount of contributions received

during the calendar year after the startup day (as defined

in the prior paragraph). See section 860G(d). Don’t

include cash contributions described next.

• Any contribution to facilitate a clean-up call or a

qualified liquidation.

• Any payment in the nature of a guarantee.

• Any contribution during the 3-month period beginning

on the startup day.

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• Any contribution to a qualified reserve fund by any

holder of a residual interest in the REMIC.

Attach a statement showing your computation.

Additional Information

Be sure to answer the questions and provide other

information in items E through L.

Item E—Type of entity. Check the box for the entity type

of the REMIC recognized under state or local law. If the

REMIC isn’t a separate entity under state or local law,

check the box for “Segregated Pool of Assets” and state

the name and type of entity that owns the assets in the

spaces provided.

Item F—Number of residual interest holders. Enter

the number of persons who were residual interest holders

at any time during the tax year.

Item G—Electing out of the centralized partnership

audit regime. A REMIC with only one residual interest

holder at all times during the tax year doesn’t need to

complete item G because the REMIC isn’t subject to the

centralized partnership audit regime. If the REMIC had

more than one residual interest holder at any time during

the tax year, it may be eligible to elect out of the

centralized partnership audit regime for the tax year if it

has 100 or fewer residual interest holders in that year,

each of which is either an individual, a C corporation, a

foreign entity that would be treated as a C corporation if it

was domestic, an S corporation, or an estate of a

deceased residual interest holder. The election is made

annually by checking the box on item G of a timely filed

Form 1066. If the REMIC makes this election, it must also

attach Schedule B-2 (Form 1065) to Form 1066 and

provide all of the information requested on the

Schedule B-2 for each residual interest holder and the

shareholders of any S corporation residual interest

holders. The REMIC must notify each residual interest

holder of the election within 30 days of making the

election.

If the REMIC had more than one residual interest

holder at any time during the tax year and didn’t elect out

of the centralized partnership audit regime, it must

complete the Designation of Partnership Representative

on page 4 of Form 1066. For more information, see

Designation of Partnership Representative, later.

Item H—Foreign financial accounts. Check the “Yes”

box if either (1) or (2) below applies to the REMIC.

Otherwise, check the “No” box.

1. At any time during the 2025 calendar year, the

REMIC had a financial interest in or signature or other

authority over any foreign financial account, including

bank, securities, or other types of financial accounts in a

foreign country (see FinCEN Form 114, Report of Foreign

Bank and Financial Accounts (FBAR)); and

a. The combined value of the accounts was more than

$10,000 at any time during the calendar year, and

b. The account wasn’t with a U.S. military banking

facility operated by a U.S. financial institution.

2. The REMIC owns more than 50% of the stock in any

corporation that would answer “Yes” to item 1 above.

8

If the “Yes” box is checked, do the following.

• Enter the name of the foreign country or countries

where the foreign account(s) is held in the space provided

on the form. Attach a separate sheet if more space is

needed.

• Electronically file FinCEN Form 114, also referred to as

FBAR, with the Department of the Treasury using the

FinCEN’s BSA E-Filing System. Because FinCEN Form

114 isn’t a tax form, don’t file it with Form 1066.

Go to FinCEN.gov for more information.

Item I—Foreign trust. The REMIC may be required to

file Form 3520, Annual Return To Report Transactions

With Foreign Trusts and Receipt of Certain Foreign Gifts,

if:

• It directly or indirectly transferred money or property to a

foreign trust (for this purpose, any U.S. person who

created a foreign trust is considered a transferor);

• It is treated as the owner of any part of the assets of a

foreign trust under the grantor trust rules; or

• It received a distribution from a foreign trust.

For more information, see the Instructions for Form

3520.

Note: An owner of a foreign trust must ensure that the

trust files an annual information return on Form 3520-A,

Annual Information Return of Foreign Trust With a U.S.

Owner. For details, see the Instructions for Form 3520-A.

To report information required under section 6038B, the

REMIC may be required to file Form 926, Return by a U.S.

Transferor of Property to a Foreign Corporation; or Form

8865, Return of U.S. Persons With Respect to Certain

Foreign Partnerships. See the instructions for these forms

for more information.

Item L—Sum of the daily accruals. Enter the total of

the daily accruals for all residual interests for the calendar

year. See section 860E(c)(2) for details.

Schedule L, Balance Sheets per

Books

The amounts shown should agree with the REMIC’s

books and records. Attach a statement explaining any

differences.

Line 1a—Cash flow investments. These are any

investments of amounts received under qualified

mortgages for a temporary period (not more than 13

months) before distribution to holders of interests in the

REMIC.

Line 1b—Qualified reserve assets. The term “qualified

reserve asset” means any intangible property that is held

for investment and as part of a qualified reserve fund. For

a definition of qualified reserve fund, including exceptions,

see sections 860G(a)(7)(B) and (C).

Line 1c—Foreclosure property. This is any real

property (including interests in real property), and any

personal property incident to such real property, acquired

by the REMIC as a result of the REMIC’s having bid in the

property at foreclosure, or having otherwise reduced the

property to ownership or possession by agreement or

process of law, after there was a default or imminent

default on a qualified mortgage held by the REMIC.

Instructions for Form 1066 (2025)

Generally, this property ceases to be foreclosure property

at the close of the third tax year following the tax year in

which the REMIC acquired the property. See sections

860G(a)(8) and 856(e), and Regulations section 1.856-6

for more details.

Note: Solely for purposes of section 860D(a), the

determination of whether any property is foreclosure

property will be made without regard to section 856(e)(4).

Line 7—Regular interests. These are interests in the

REMIC that are issued on the startup day with fixed terms

and that are designated as regular interests, if:

1. Such interest unconditionally entitles the holder to

receive a specified principal amount or other similar

amounts; and

2. Interest payments (or similar amounts), if any, with

respect to the interest at or before maturity are payable

based on a fixed rate (or at a variable rate described in

Regulations section 1.860G-1(a)(3)), or consist of a

specified portion of the interest payments on qualified

mortgages and this portion doesn’t vary during the period

that the interest is outstanding.

The interest will meet the requirements of (1) even if the

timing (but not the amount) of the principal payments (or

other similar amounts) is contingent on the extent of

prepayments on qualified mortgages and the amount of

income from permitted investments.

An interest will still qualify as a regular interest even if

the specified principal amount of the regular interest (or

the amount of interest accrued on the regular interest) can

be reduced as a result of the nonoccurrence of one or

more contingent payments with respect to any reverse

mortgage loan held by the REMIC if, on the startup day for

the REMIC, the sponsor reasonably believes that all

principal and interest due under the regular interest will be

paid at or prior to the liquidation of the REMIC.

Schedule M, Reconciliation of

Residual Interest Holders’ Capital

Accounts

Show what caused the changes in the residual interest

holders’ capital accounts during the tax year.

The amounts shown should agree with the REMIC’s

books and records and the balance sheet amounts.

Attach a statement explaining any differences.

Include in column (d):

• Tax-exempt interest income,

• Other tax-exempt income,

• Income from prohibited transactions,

• Income recorded on the REMIC’s books but not

included on this return, and

• Allowable deductions not charged against book income

this year.

Include in column (e):

• Capital losses over the $3,000 limitation (for a REMIC

with a startup day before November 12, 1991),

• Other nondeductible amounts (such as losses from

prohibited transactions and expenses connected with the

production of tax-exempt income),

• Deductions allocable to prohibited transactions,

Instructions for Form 1066 (2025)

• Expenses recorded on books not deducted on this

return, and

• Taxable income not recorded on the books this year.

Designation of Partnership

Representative (PR)

Unless the REMIC has made a valid election out of the

centralized partnership audit regime or had only one

residual interest holder at all times during the tax year, the

REMIC must designate a PR. The PR can be any person

with a substantial presence in the United States. The PR

will have the sole authority to act on behalf of the REMIC.

If an entity is designated as PR, the REMIC must also

appoint an individual to act on the entity’s behalf (a

designated individual (DI)). The DI must also have a

substantial presence in the United States.

How to designate. An original designation of a PR must

be made on the REMIC’s Form 1066 filed for each

respective REMIC tax year.

PR authority. The REMIC and all its residual interest

holders (and any other person whose tax liability is

determined in whole or in part by taking into account

directly or indirectly adjustments determined under the

centralized partnership audit regime) are bound by the

actions of the PR in dealings with the IRS. A designation

for a partnership tax year remains in effect until the

designation is terminated by:

• Valid resignation of the PR,

• Valid revocation of the PR, or

• Determination by the IRS that the designation isn’t in

effect.

Substantial presence. In order for either a PR or a DI to

have substantial presence in the United States, they must:

• Make themselves available to meet in person with the

IRS in the United States at a reasonable time and place,

as determined by the IRS;

• Have a street address that is in the United States;

• Have a telephone number with a U.S. area code; and

• Have a U.S. taxpayer identification number.

Schedule Q, Quarterly Notice to

Residual Interest Holder of REMIC

Taxable Income or Net Loss

Allocation

Purpose of Schedule

Schedule Q (Form 1066) shows each residual interest

holder’s share of the REMIC’s quarterly taxable income (or

net loss), the excess inclusion for the residual interest

holder’s interest, and the residual interest holder’s share of

the REMIC’s section 212 expenses for the quarter.

Although the REMIC isn’t subject to income tax (except

on net income from prohibited transactions, net income

from foreclosure property, and contributions made after

the startup day), the residual interest holders are liable for

tax on their shares of the REMIC’s taxable income,

whether or not distributed, and must include their shares

on their tax returns.

9

Note: Schedule Q (Form 1066) is a separate tax form that

isn’t part of Form 1066.

General Instructions

For each calendar quarter, complete Schedule Q (Form

1066) for each person who was a residual interest holder

at any time during the quarter. File Schedule Q with Form

1066. Give one copy to the residual interest holder by the

last day of the month following the month in which the

calendar quarter ends. Keep one copy with a copy of

Form 1066 as part of the REMIC’s records.

Specific Instructions

On each Schedule Q, enter the name, address, and

identifying number for each residual interest holder and

REMIC. For each residual interest holder that is an

individual, you must enter the residual interest holder’s

social security number (SSN) (or individual taxpayer

identification number (ITIN) for a resident or nonresident

alien). For all other residual interest holders, you must

enter the residual interest holder’s EIN. However, if a

residual interest holder is an IRA, enter the identifying

number of the IRA trust. Don’t enter the SSN (or ITIN) of

the individual for whom the IRA is maintained.

Item A—What Type of Entity Is This Residual

Interest Holder?

State on this line whether the residual interest holder is an

individual, a corporation, an estate, a trust, a partnership,

an exempt organization, a nominee (custodian), or

another REMIC. If the residual interest holder is a

nominee, use the following codes to indicate in

parentheses the type of entity the nominee represents.

• I—Individual.

• C—Corporation.

• F—Estate or Trust.

• P—Partnership.

• E—Exempt Organization.

• R—REMIC.

• IRA—Individual Retirement Arrangement.

Item B—Residual Interest Holder’s Percentage of

Ownership

Enter in item B2 the percentage at the end of the calendar

quarter. However, if a residual interest holder’s percentage

of ownership changed during the quarter, enter in item B1

the percentage immediately before the change. If there

are multiple changes in the percentage of ownership

during the quarter, attach a statement giving the date and

percentage before each change.

Item C—REMIC Assets

Enter in item C the percentage of the REMIC’s assets

during the calendar quarter represented by each of the

following categories of assets.

• Real estate assets under section 856(c)(5)(B).

• Assets described in section 7701(a)(19)(C) (relating to

the definition of a domestic building and loan association).

10

These percentages must be computed using the

average adjusted basis of the assets held during the

calendar quarter. To do this, the REMIC must make the

appropriate computation as of the close of each month,

week, or day and then average the monthly, weekly, or

daily percentages for the quarter. The monthly, weekly, or

daily computation period must be applied uniformly during

the calendar quarter to both categories of assets, and may

not be changed in succeeding calendar quarters without

IRS consent. If the percentage of the REMIC’s assets for

either category is at least 95%, the REMIC may show “95

or more” for that category in item C.

If less than 95% of the assets of the REMIC are real

estate assets (as defined in section 856(c)(5)(B)), the

REMIC must also report to any real estate investment trust

that holds a residual interest the information specified in

Regulations section 1.860F-4(e)(1)(ii)(B). However, if a

REMIC is an “eligible REMIC,” as defined in Notice

2012-5, and a percentage of its assets represented by

either of the categories of assets described under REMIC

assets, earlier, was less than 95% but at least 80%, then

the REMIC need only specify in item C that the

percentage for that category was at least 80%. For more

information, see Notice 2012-5, available on page 291 of

Internal Revenue Bulletin 2012-3 at IRS.gov/irb/

2012-03_IRB#NOT-2012-5.

Item F—Reconciliation of Residual Interest

Holder’s Capital Account

See the instructions for Schedule M, earlier.

Line 1a—Taxable income (net loss) of the REMIC for

the calendar quarter. Enter the REMIC’s taxable income

(net loss) for the calendar quarter. The sum of the totals

for the four quarters in the calendar year must equal the

amount shown on Form 1066, Section I, line 15.

Line 1b—Your share of the taxable income (net loss)

for the calendar quarter. Enter the residual interest

holder’s share of the taxable income (net loss) shown on

line 1a (determined by adding the holder’s daily portions

under section 860C(a)(2) for each day in the quarter the

holder held the residual interest). If line 1a is a loss, enter

the residual interest holder’s full share of the loss, without

regard to the adjusted basis of the residual interest

holder’s interest in the REMIC.

Line 2a—Sum of the daily accruals under section

860E for all residual interests for the calendar quarter. Enter the product of the sum of the adjusted issue

prices of all residual interests at the beginning of the

quarter and 120% of the long-term federal rate

(determined on the basis of compounding at the end of

each quarter and properly adjusted for the length of such

quarter). See section 860E(c) for details.

Line 2b—Sum of the daily accruals under section

860E for your interest. Enter zero if line 2a is zero.

Otherwise, divide the amount shown on line 2a by the

number of days in the quarter. Multiply the result by the

residual interest holder’s percentage of ownership for

each day in the quarter that the residual interest holder

owned the interest. Total the daily amounts and enter the

result.

Instructions for Form 1066 (2025)

Line 3. Complete lines 3a and 3b only for residual

interest holders who are individuals or other pass-through

interest holders (as defined in Temporary Regulations

section 1.67-3T).

Line 3a—Section 212 expenses of the REMIC for the

calendar quarter. Enter the REMIC’s allocable section

212 expenses for the calendar quarter. The term

“allocable section 212 expenses” means the aggregate

amount of the expenses paid or accrued in the calendar

quarter for which a deduction is allowable under section

212 in determining the taxable income of the REMIC for

the calendar quarter.

Section 212 expenses generally include operational

expenses such as:

• Rent,

• Salaries,

• Legal fees,

• Accounting fees,

• Litigation expenses, and

• The cost of preparing and distributing reports and

notices to interest holders.

Line 3b—Your share of section 212 expenses for the

calendar quarter. Enter the residual interest holder’s

share of the amount shown on line 3a.

Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the

United States. You’re required to give us the information. We need it to ensure that you are complying with these laws and

to allow us to figure and collect the right amount of tax.

You’re not required to provide the information requested on a form that is subject to the Paperwork Reduction Act

unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be

retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax

returns and return information are confidential, as required by section 6103.

The time needed to complete and file this form and related schedule will vary depending on individual circumstances.

The estimated burden for business taxpayers filing this form and the related schedule is approved under OMB control

number 1545-0123 and is included in the estimates shown in the instructions for their business income tax return.

If you have comments concerning the accuracy of the time estimates or suggestions for making this form and related

schedule simpler, we would be happy to hear from you. You can send us comments through IRS.gov/FormComments.

Or, you can write to Internal Revenue Service, Tax Forms and Publications, 1111 Constitution Ave. NW, IR-6526,

Washington, DC 20224. Don’t send tax questions, tax returns, or payments to the above address. Instead, see Where To

File, earlier.

Instructions for Form 1066 (2025)

11