OAR 150-314-0047: REMIC Income Taxable to Nonresidents

(1) Regular Interests. (a) In general, dividends, interest, royalties, and other income from the use or ownership of intangible personal property used in a trade or business is includable in the taxable income of a nonresident if such property has a business situs in Oregon pursuant to ORS 316.127 and the rules thereunder. (b) The income of a nonresident holder of a regular interest in a real estate mortgage investment conduit (REMIC) must be considered income from intangible personal property and subject to the provisions of ORS 316.127 and the corresponding rules. Thus, income attributable to regular interests in a REMIC will be taxable to nonresidents only if the taxpayer’s regular interest has acquired a business situs in Oregon. (2) Residual Interests. (a) The taxable income or loss of a nonresident holder of a residual interest in a real estate mortgage investment conduit (REMIC) will be the nonresident’s daily portion of the REMIC’s taxable income or loss, as determined in IRC section 860C, modified in accordance with the general rules of ORS 316.124. In determining the items of REMIC income, gain, loss, and deduction included in the taxable income of a nonresident, the following will apply: (A) The nonresident must include only his or her daily portion of REMIC income or loss derived from or connected with sources within Oregon. The daily portion of REMIC income or loss includable for the taxable year will bear the same ratio to the nonresident’s total daily portion of REMIC income or loss as the REMIC net income or loss from Oregon sources bears to the REMIC net income or loss from all sources. (B) When a REMIC has income from sources both within and without this state, the amount of apportionable income from sources within this state must be determined pursuant to ORS 314.280 and the rules thereunder. (b) Disposition of Real Property: The gain, profit, or loss from the sale, exchange or disposition of any real property, incident to the foreclosure or default of the mortgage, must be used in the determination of the taxable income of a nonresident if the real property is located in Oregon. The gain or loss from the disposition of the real property must be included only to the extent of the nonresident’s daily portion of the REMIC income, gain, or loss in accordance with this rule and the general rules of ORS 316.124. [Publications: Contact the Oregon Department of Revenue to learn how to obtain a copy of the publication referred to or incorporated by reference in this rule pursuant to ORS 183.360(2) and 183.355(1)(b).]