Tax Considerations
The following is a brief discussion of material federal income tax consequences of the purchase and ownership of REMIC securities. It does not purport to be all-encompassing, nor does it purport to deal with the federal income tax consequences for all categories of investors, some of which may be subject to special rules. This discussion does not address state income tax consequences for investors. Ginnie Mae and its financial advisor do not assume any responsibility for information relating to tax matters. Consequently, investors should consult their own tax advisors in determining the federal, state, local, foreign, and any other tax consequences in connection with the purchase, ownership, or disposition of REMIC securities.
A REMIC is a tax entity and is usually formed as a trust for federal income tax purposes. The assets of the REMIC consist of a fixed pool of mortgages or other mortgage-backed assets in which investors hold multiple classes of interests. To be treated as a REMIC, the trust must meet certain continuing qualification requirements, and a REMIC election must be in effect. A REMIC Trust generally will not, for federal income tax purposes, be subject an entity-level tax.
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