Services // REMIC Tax and Residual Analysis

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ETI completes the tax reporting for REMIC and non-REMIC arrangements. For REMICs, ETI collects Issue Prices for the bonds, and then sets up each REMIC tier as of closing. We then complete the required quarterly tax schedules (Form 1066Q) for residual interest holders, OID factor statements for regular interest holders, and annual tax returns (Form 1066) for residual interest holders. Based on the preferences of our clients, we may engage a Big 4 firm to review REMIC tax returns and the accompanying schedules and work papers and sign as tax preparer. We have established working relationships with KPMG and Ernst & Young in order to provide our clients with quality work, specialists, and the national resources of a Big 4 firm. ETI and our Big 4 partners often work proactively with our clients in order to help them reach their financial objectives by reviewing the tax and payment terms of a transaction prior to issuance.

For non-REMIC transactions such as grantor trusts, WHFITs, owner trusts, and partnerships, ETI either completes the appropriate returns or information statements and, if desired by our clients, engages one of our Big 4 partners to review and sign the returns, or performs some the underlying tax calculations to enable our Big 4 partner to complete the returns. This approach provides our clients with the combination of ETI’s specialized knowledge and the resources of a Big 4 accounting firm, at competitive prices.

Residual Valuation and Analysis

ETI and our Big 4 Partners answer any questions the regular or residual interest holders may have with regard to the tax reports. We also help residual-interest holders understand and quantify excess-inclusion income associated with their securities. We help determine the value of their residual interests by completing analyses of residual interests on an after-tax basis, typically under different prepayment assumptions.