Federal Excise Taxes on Excess Inclusions of REMIC Residual Interests
Extracted from PDF file 2018-federal-form-8831.pdf, last modified April 2018
Excise Taxes on Excess Inclusions of REMIC Residual Interests8831 Excise Taxes on Excess Inclusions of REMIC Residual Interests Form (Rev. April 2018) Department of the Treasury Internal Revenue Service Name Please Type or Print ▶ Go OMB No. 1545-1379 to www.irs.gov/Form8831 for the latest information. Identifying number Number, street, and room or suite no. (If a P.O. box, see instructions.) City or town, state or province, country, and ZIP or foreign postal code Part I Transfers to Disqualified Organizations. File a separate Form 8831 for each transfer of a residual interest. Section A—Information on the Transfer 1 2 3 Enter the date the residual interest was transferred to a disqualified organization . . . . . ▶ Within a reasonable time after discovering this transfer was subject to tax under section 860E(e)(1), were steps taken so that the residual interest you transferred is no longer held by a disqualified organization? ▶ Yes No If you answered “Yes” to question 2, enter the date the disqualified organization disposed of the residual interest . . . . . . . . . . . . . . . . . . . . . . . . . . . ▶ If you answered “Yes” to question 2, the tax due under section 860E(e)(1) will be waived if you pay the amount due under Regulations section 1.860E-2(a)(7)(ii). Skip Section B and go to Section C to figure the amount due. If you answered “No” to question 2, use Section B to figure the tax due under section 860E(e)(1). Do not complete Section C. Section B—Tax Due Under Section 860E(e)(1). Complete this section only if you answered “No” to question 2. 4 Enter the present value of the excess inclusions allocable to the residual interest you transferred that are expected to accrue in each calendar quarter (or part thereof) following the transfer of that interest to the disqualified organization (see instructions) . . . . . . . . . . . . . . 5 Tax due. Multiply line 4 by the highest rate of tax specified in section 11 (see instructions) . . . 4 5 Section C—Amount Due Under Regulations Section 1.860E-2(a)(7)(ii). Complete this section only if you answered “Yes” to question 2. 6 Enter the amount of excess inclusions allocable to the residual interest you transferred that accrued during the period the disqualified organization held that interest . . . . . . . . . 7 Amount due. Multiply line 6 by the highest rate of tax specified in section 11 (see instructions) Part II 8 9 10 6 7 Tax on Pass-Through Entities With Interests Held by Disqualified Organizations. File a separate Form 8831 for Part II if you owe tax in Part I. Enter the ending date of the pass-through entity’s tax year for which this return is being filed . . . . . . . . . . . . . . ▶ Enter the amount of excess inclusions allocable to interests in the pass-through entity for which the record holder is a disqualified organization . . . . . . . . . . . . . . . . . Tax due. Multiply line 9 by the highest rate of tax specified in section 11 (see instructions) . Part III 11 12 13 14 . . . 9 10 . . . . . . . . 11 12 13 14 Tax and Payments Enter the amount from line 5, 7, or 10, whichever applies Amount paid with Form 7004 . . . . . . . . . Amount due. Enter the excess of line 11 over line 12 . Overpayment. Enter the excess of line 12 over line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. ▶ ▶ Signature Date Paid Preparer Use Only Print/Type preparer’s name Preparer’s signature ▶ Title (if any) Date Check if self-employed Firm’s name ▶ Firm’s EIN Firm’s address ▶ Phone no. For Privacy Act and Paperwork Reduction Act Notice, see instructions. Cat. No. 13377A PTIN ▶ Form 8831 (Rev. 4-2018) [This page left blank intentionally.] Page 3 Form 8831 (Rev. 4-2018) Section references are to the Internal Revenue Code unless otherwise noted. Future Developments For the latest information about developments related to Form 8831 and its instructions, such as legislation enacted after they were published, go to www.irs.gov/Form8831. General Instructions Purpose of Form Use Form 8831 to report and pay: • The excise tax due under section 860E(e)(1) on any transfer of a residual interest in a REMIC to a disqualified organization, • The amount due under Regulations section 1.860E-2(a)(7)(ii) if the tax under section 860E(e)(1) is to be waived, or • The excise tax due under section 860E(e)(6) on pass-through entities with interests held by disqualified organizations. All interests in an electing large partnership are treated as held by disqualified organizations (see section 774(e) for details). Definitions A disqualified organization is: • The United States, any state or political subdivision thereof, any foreign government, any international organization, or any of their agencies or instrumentalities (except for certain taxable instrumentalities described in section 168(h)(2)(D) and the Federal Home Loan Mortgage Corporation); • Any tax-exempt organization (other than a farmers’ cooperative described in section 521), unless that organization is subject to the unrelated business income tax; and • Any cooperative described in section 1381(a)(2)(C). A pass-through entity is a regulated investment company, real estate investment trust, common trust fund, partnership, trust, estate, or a cooperative described in section 1381. A person holding an interest in a pass-through entity as a nominee for another person is also treated as a pass-through entity. Who Must File You must file Form 8831 if you are liable for the excise tax in Part I under section 860E(e)(1) (or the amount due under Regulations section 1.860E-2(a)(7)(ii)) because you transferred a residual interest in a REMIC to a disqualified organization after March 31, 1988 (unless the transfer was made under a binding contract in effect on that date). File a separate Form 8831 for each transfer of a residual interest. You will be relieved of the liability for the tax if you obtain an affidavit from the transferee signed under penalties of perjury that either furnishes the transferee’s social security number or states that the transferee is not a disqualified organization, provided you do not have actual knowledge at the time of the transfer that the affidavit is false. A pass-through entity must file Form 8831 if it is liable for the tax in Part II under section 860E(e)(6). The entity must pay this tax if, at any time during the entity’s tax year, excess inclusions from a residual interest in a REMIC are allocable to an interest in the entity for which the record holder is a disqualified organization. The tax applies to excess inclusions for periods after March 31, 1988, but only to the extent the inclusions are allocable either to an interest in the pass-through entity acquired after March 31, 1988, or to a residual interest acquired by the passthrough entity after March 31, 1988. Any interest acquired under a binding contract in effect on March 31, 1988, is treated as acquired before that date. A real estate investment trust, regulated investment company, common trust fund, or publicly traded partnership is subject to the tax due under section 860E(e)(6) only for tax years beginning after 1988. Generally, a pass-through entity is not subject to the excise tax under section 860E(e)(6) if it obtains an affidavit from the record holder signed under penalties of perjury that either furnishes the record holder’s social security number or states that the record holder is not a disqualified organization. The affidavit provides relief for any period during which the pass-through entity does not have actual knowledge that the affidavit is false. However, this relief does not apply to electing large partnerships. A pass-through entity that owes both the excise tax in Part I under section 860E(e)(1) (or the amount due under Regulations section 1.860E-2(a)(7)(ii)) and the excise tax in Part II under section 860E(e)(6) must file a separate form for each tax. When To File For the excise tax due under section 860E(e)(1), file Form 8831 and pay the tax by April 15 of the year following the calendar year in which the residual interest is transferred to a disqualified organization. A pass-through entity must file Form 8831 and pay the tax due under section 860E(e)(6) by the 15th day of the 4th month following the close of its tax year in which the disqualified person is a record holder. If the due date falls on a Saturday, Sunday, or legal holiday, file on the next day that is not a Saturday, Sunday, or legal holiday. If more time is needed, use Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns, to request an extension of time to file Form 8831. However, Form 7004 does not extend the time for payment of tax. Where To File Send Form 8831 to the following address. Department of the Treasury Internal Revenue Service Cincinnati, OH 45999 Rounding Off to Whole Dollars You may round off cents to whole dollars on your returns and schedules. If you do round to whole dollars, you 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 you have to add two or more amounts to figure the amount to enter on a line, include cents when adding the amounts and round off only the total. Amended Return To amend a previously filed Form 8831, file a corrected Form 8831 marked “Amended” at the top of the form. Signature See the instructions for the “Signature” section of your federal income tax return. Paid Preparer Use Only A paid preparer must sign Form 8831 and provide the information in the Paid Preparer Use Only section at the end of the form if the preparer was paid to prepare the form and is not an employee of the filing entity. The preparer must give you a copy of the form in addition to the copy to be filed with the IRS. If you are a paid preparer, enter your Preparer Tax Identification Number (PTIN) in the space provided. Include your complete address. If you work for a firm, you also must enter the firm’s name and the EIN of the firm in place of your PTIN. Form 8831 (Rev. 4-2018) You can apply for a PTIN online or by filing Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application and Renewal. For more information about applying for a PTIN online, visit the IRS website at www.irs.gov/PTIN. Interest and Penalties Interest. Interest is charged on taxes not paid by the due date. Interest is also charged on certain penalties. The interest charged is figured at a rate determined under section 6621. Late filing penalty. Generally, a penalty of 5% a month or part of a month, up to a maximum of 25%, is imposed on the net amount of tax due if the excise tax return is not filed when due. Late payment penalty. Generally, the penalty for not paying tax when due is 1/2 of 1% of the unpaid tax, up to a maximum of 25%, for each month or part of a month the tax remains unpaid. Blended tax rate for fiscal year filers. Effective for tax years beginning after December 31, 2017, a corporation’s tax is figured by multiplying taxable income by 21%. However, under section 15, corporations with fiscal tax years beginning before January 1, 2018, and ending after December 31, 2017, figure and apportion their tax by blending the rates in effect before January 1, 2018, with the rate in effect after December 31, 2017. Specific Instructions Name and Address Enter the name shown on your most recently filed federal income tax return. Include the suite, room, apartment, or other unit number after the street address. If the Post Office does not deliver mail to the street address and you have a P.O. box, show the box number instead of the street address. Identifying Number If you are an individual, enter your social security number. Other filers, enter your employer identification number. Part I Line 4. The excess inclusions expected to accrue must be determined as of the date the residual interest is transferred and must be based on events that have occurred up to the time of the transfer, the prepayment and reinvestment assumptions adopted under section 1272(a)(6) (or that would have been adopted if the REMIC’s regular interests had been issued with original issue discount), and any required or permitted clean-up calls, or required qualified liquidation provided under the REMIC’s organizational documents. Page The present value of the excess inclusions expected to accrue is determined by discounting all remaining excess inclusions expected to accrue on the residual interest from the end of each calendar quarter in which those inclusions are expected to accrue to the date the disqualified organization acquired the residual interest. The discount rate to be used in this computation is the applicable federal rate under section 1274(d)(1) that would apply to a debt instrument issued on the date the disqualified organization acquired the residual interest and with a term that ends on the last day of the last quarter in which excess inclusions are expected to accrue for the interest. The REMIC must furnish the information needed to figure the amount on line 4 upon your request. The information must be furnished within 60 days of the request. The REMIC may charge a fee for this information. Line 6. Enter the amounts reported on Schedule Q (Form 1066), Quarterly Notice to Residual Interest Holder of REMIC Taxable Income or Net Loss Allocation, line 2c, to the disqualified organization for the period it held the residual interest. Part II Line 9. Enter the amounts reported on Schedule Q (Form 1066), line 2c, for the tax year of the pass-through entity that are allocable to all disqualified organizations that held an interest in the entity. Line 10. In general, deduct the amount on line 10 to figure the ordinary income of the pass-through entity. For example, a real estate investment trust deducts the tax to figure its real estate investment trust taxable income under section 857(b)(2). However, an electing large partnership excludes the amount subject to tax (line 9) instead of deducting the tax (line 10) from its income. Part III Line 12. If you filed Form 7004, enter the amount paid, if any, when you filed that form. Line 13. You must pay the full amount reported on line 13. You may make your payment using the Electronic Federal Tax Payment System (EFTPS). To do so, you must be enrolled in EFTPS. To enroll in or get more information about EFTPS, visit www.eftps.gov. You may also send us a check or money order. If so, make your check or money order payable to “United States Treasury.” Write your name, address, identifying number, and “Form 8831” on the check or money order. 4 Line 14. The IRS will refund the amount on line 14 if you owe no other taxes. Privacy Act and Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the United States. We need it to figure and collect the right amount of tax. This form is used to determine the amount of taxes you owe as imposed by section 860E. Section 6011 requires you to provide the requested information if the tax is applicable to you. Section 6109 requires you to provide your identification number. Routine uses of this information include giving it to the Department of Justice for civil and criminal litigation and to cities, states, and the District of Columbia, and U.S. commonwealths and possessions for use in administering their tax laws. We may also disclose this information to other countries under a tax treaty, to federal and state agencies to enforce federal nontax criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism. If you fail to provide this information in a timely manner, you may be subject to penalties. You are 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 will vary depending on individual circumstances. The estimated average time is: Recordkeeping, 4 hr., 32 min.; Learning about the law or the form, 1 hr., 29 min.; Preparing, copying, assembling, and sending the form to the IRS, 1 hr., 37 min. If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be happy to hear from you. You can send comments through www.irs.gov/FormComments. Or you can write to: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. NW, IR-6526 Washington, DC 20224 Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Do not send the tax form to this address. Instead, see Where To File, earlier.
Form 8831 (Rev. April 2018)
More about the Federal Form 8831 Other TY 2018
We last updated the Excise Taxes on Excess Inclusions of REMIC Residual Interests in December 2018, so this is the latest version of Form 8831, fully updated for tax year 2018. You can download or print current or past-year PDFs of Form 8831 directly from TaxFormFinder. You can print other Federal tax forms here.
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The Internal Revenue Service usually releases income tax forms for the current tax year between October and January, although changes to some forms can come even later. We last updated Federal Form 8831 from the Internal Revenue Service in December 2018.
Historical Past-Year Versions of Federal Form 8831
We have a total of seven past-year versions of Form 8831 in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:
Form 8831 (Rev. April 2018)
Form 8831 (Rev. December 2013)
Form 8831 (Rev. December 2013)
Form 8831 (Rev. December 2013)
Form 8831 (Rev. December 2013)
Form 8831 (Rev. January 2012)
Form 8831 (Rev. January 2012)
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