U.S. Code » 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

26 U.S.C. § 860D

REMIC defined

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(a) General ruleFor 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.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)).(b) Election(1) In general

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) Termination(A) In general

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) Inadvertent terminationsIf—(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,then, notwithstanding such terminating event, such entity shall be treated as continuing to be a REMIC (or such cessation shall be disregarded for purposes of subparagraph (A)) whichever the Secretary determines to be appropriate.(Added Pub. L. 99–514, title VI, § 671(a), Oct. 22, 1986, 100 Stat. 2311; amended Pub. L. 100–647, title I, § 1006(t)(2)(A), (16)(A), (19), Nov. 10, 1988, 102 Stat. 3419, 3423, 3426; Pub. L. 101–508, title XI, § 11704(a)(8), Nov. 5, 1990, 104 Stat. 1388–518.)Editorial NotesAmendments

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 SubsidiariesEffective 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.

Notes of Decisions
Cited in 14 cases (3 in the last 5 years), 2002–2026 · leading case: State of New York Ex Rel. Jacobson v. Wells Fargo Nat'l Bank, N.A., 824 F.3d 308 (2d Cir. 2016).
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State of New York Ex Rel. Jacobson v. Wells Fargo Nat'l Bank, N.A., 824 F.3d 308 (2d Cir. 2016). · cites it 4× “A REMIC is exempt from federal income taxation only “as long as the mortgages deposited in the REMIC are ‘qualified mortgages’ under federal tax law and regulation” (Complaint ¶ 1); see 26 U.S.C. § 860D(a)(4). A “ ‘qualified mortgage’ ” is defined in the Internal Revenue Code,…”
SC Note Acquisitions, LLC v. Wells Fargo Bank, N.A., 548 F. App'x 741 (2d Cir. 2014). · cites it 4× “Even assuming, arguendo, moreover, that the Trust’s ownership interest in these limited liability companies could cause the Trust to lose its REMIC status by operation of law, 26 U.S.C. § 860D(b)(2) vests the Secretary of the Treasury with the discretion to continue to recognize…”
Mendoza v. JPMorgan Chase Bank, N.A., 6 Cal. App. 5th 802 (Cal. Ct. App. 2016). “Moreover, defendants aptly point out that plaintiff’s selective extraction of tax code provisions leaves out the important distinction that not all transfers must be qualified to retain the favorable tax exemptions and thus the late transfer of plaintiff’s mortgage may not…”
Nomura Asset Capital Corp. v. Cadwalader, Wickersham & Taft, 41 N.E.3d 353 (N.Y. 2015). “For these mortgage loans to be pooled in a REMICqualified trust they had to be in compliance with certain federal Internal Revenue Code requirements, including that substantially all of the assets be “qualified mortgages and permitted investments” within the meaning of the Code…”
Nizan v. Wells Fargo Bank Minnesota Nat., 650 S.E.2d 497 (Va. 2007). “26 U.S.C. § 860D (2000). A mortgage qualifies as a REMIC mortgage if, at the time it was originated or contributed to the trust, it was principally secured by an interest in real property.”
Nomura Asset Capital Corp. v. Cadwalader, Wickersham & Taft LLP, 115 A.D.3d 228 (N.Y. App. Div. 1st Dep't 2014). · cites it 3× “*233 Nomura typically securitized its commercial mortgage loans through REMIC trusts, 1 which enjoy certain federal income tax benefits (see 26 USC § 860D). In order to qualify as a REMIC trust, the pool of mortgages must satisfy a set of stringent tests.”
In Re Shilo Inn, Diamond Bar, LLC, 285 B.R. 726 (Bankr. D. Or. 2002). “See 26 U.S.C. § 860D (defining REMIC). 7 . Also, as the trusts point out in their brief, the different trust classes of certificate holders have widely disparate economic interests and would likely vote to protect those interests.”
Ryan Ex Rel. Ryan v. Nationstar Mortg., LLC, 701 F. App'x 585 (9th Cir. 2017). · cites it 2× “Additionally, even if a trust has more than a de minimis amount of non-permitted assets, the IRS will continue to treat the trust as a REM-IC if the trust takes certain prescribed steps to remedy the inadvertent loss of its REMIC qualifications, 26 U.”
Patricia Beverly v. the Bank of New York Mellon, No. 17-55557 (9th Cir. Oct. 17, 2018). · cites it 2× “” 26 U.S.C. § 860D(a)(4). The Code defines “qualified mortgage” as any obligation principally secured by an interest in real property and which is transferred to or purchased by the REMIC trust within certain specified time frames.”
SC Note v. Wells Fargo, No. 13-1705-cv (2d Cir. Jan. 2, 2014). · cites it 3× “3 Even assuming, arguendo, moreover, that the Trust’s ownership interest in 4 these limited liability companies could cause the Trust to lose its REMIC status by 5 operation of law, 26 U.S.C. § 860D(b)(2) vests the Secretary of the Treasury with the 6 discretion to continue to…”
Nomura Asset Capital Corp. v. Cadwalader, Wickersham & Taft LLP, 115 A.D.3d 228 (N.Y. App. Div. 1st Dep't 2014). · cites it 3× “*233 Nomura typically securitized its commercial mortgage loans through REMIC trusts, 1 which enjoy certain federal income tax benefits (see 26 USC § 860D). In order to qualify as a REMIC trust, the pool of mortgages must satisfy a set of stringent tests.”
David E. Stone v. Comm'r of Internal Revenue Serv., 86 F.4th 1320 (11th Cir. 2023). “The REMIC requirements are set forth in 26 U.S.C. § 860D(a), and one of them is that “substantially all” of the entity’s assets must “consist of qualified mortgages and permitted investments.”
Show all 14 citing cases →
26 U.S.C. § 860D(a): 1 case
David E. Stone v. Comm'r of Internal Revenue Serv., 86 F.4th 1320 (11th Cir. 2023). “The REMIC requirements are set forth in 26 U.S.C. § 860D(a), and one of them is that “substantially all” of the entity’s assets must “consist of qualified mortgages and permitted investments.”
26 U.S.C. § 860D(a)(2): 2 cases
Powell v. Ocwen Fin. Corp., No. 23-999 (2d Cir. Mar. 26, 2026).
Powell v. Ocwen Fin. Corp., No. 23-999 (2d Cir. Apr. 22, 2026).
26 U.S.C. § 860D(a)(4): 4 cases
State of New York Ex Rel. Jacobson v. Wells Fargo Nat'l Bank, N.A., 824 F.3d 308 (2d Cir. 2016). “A REMIC is exempt from federal income taxation only “as long as the mortgages deposited in the REMIC are ‘qualified mortgages’ under federal tax law and regulation” (Complaint ¶ 1); see 26 U.S.C. § 860D(a)(4). A “ ‘qualified mortgage’ ” is defined in the Internal Revenue Code,…”
Mendoza v. JPMorgan Chase Bank, N.A., 6 Cal. App. 5th 802 (Cal. Ct. App. 2016). “Moreover, defendants aptly point out that plaintiff’s selective extraction of tax code provisions leaves out the important distinction that not all transfers must be qualified to retain the favorable tax exemptions and thus the late transfer of plaintiff’s mortgage may not…”
Patricia Beverly v. the Bank of New York Mellon, No. 17-55557 (9th Cir. Oct. 17, 2018). “” 26 U.S.C. § 860D(a)(4). The Code defines “qualified mortgage” as any obligation principally secured by an interest in real property and which is transferred to or purchased by the REMIC trust within certain specified time frames.”
Ryan Ex Rel. Ryan v. Nationstar Mortg., LLC, 701 F. App'x 585 (9th Cir. 2017). “Additionally, even if a trust has more than a de minimis amount of non-permitted assets, the IRS will continue to treat the trust as a REM-IC if the trust takes certain prescribed steps to remedy the inadvertent loss of its REMIC qualifications, 26 U.”
26 U.S.C. § 860D(b)(2): 3 cases
SC Note Acquisitions, LLC v. Wells Fargo Bank, N.A., 548 F. App'x 741 (2d Cir. 2014). “Even assuming, arguendo, moreover, that the Trust’s ownership interest in these limited liability companies could cause the Trust to lose its REMIC status by operation of law, 26 U.S.C. § 860D(b)(2) vests the Secretary of the Treasury with the discretion to continue to recognize…”
SC Note v. Wells Fargo, No. 13-1705-cv (2d Cir. Jan. 2, 2014). “3 Even assuming, arguendo, moreover, that the Trust’s ownership interest in 4 these limited liability companies could cause the Trust to lose its REMIC status by 5 operation of law, 26 U.S.C. § 860D(b)(2) vests the Secretary of the Treasury with the 6 discretion to continue to…”
Ryan Ex Rel. Ryan v. Nationstar Mortg., LLC, 701 F. App'x 585 (9th Cir. 2017). “Additionally, even if a trust has more than a de minimis amount of non-permitted assets, the IRS will continue to treat the trust as a REM-IC if the trust takes certain prescribed steps to remedy the inadvertent loss of its REMIC qualifications, 26 U.”
26 U.S.C. § 860D(b)(2)(B)(ii): 2 cases
SC Note Acquisitions, LLC v. Wells Fargo Bank, N.A., 548 F. App'x 741 (2d Cir. 2014). “Even assuming, arguendo, moreover, that the Trust’s ownership interest in these limited liability companies could cause the Trust to lose its REMIC status by operation of law, 26 U.S.C. § 860D(b)(2) vests the Secretary of the Treasury with the discretion to continue to recognize…”
SC Note v. Wells Fargo, No. 13-1705-cv (2d Cir. Jan. 2, 2014). “3 Even assuming, arguendo, moreover, that the Trust’s ownership interest in 4 these limited liability companies could cause the Trust to lose its REMIC status by 5 operation of law, 26 U.S.C. § 860D(b)(2) vests the Secretary of the Treasury with the 6 discretion to continue to…”
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