CMBS Trust Taxation
"In CMBS, first mortgages (usually from several diff properties diversified by property type ie office, retail, multi-family etc and location) are pooled & held by trust which serves as pass through entity for bondholders."
"The pass through entity is a legal classification for tax purposes where the income is not double taxed at the corporate tax rate then individual income tax rate, you're just taxed at the individual income tax rate"
Question: Without the trust, why would there be double taxation - who would be the corporate and who would be the individual?
The trust is a pooling vehicle for the loans, which makes a REMIC tax election to give it its pass through structure. For example, let’s say the pooling vehicle was a c-corp that didn’t make the REMIC election. The c-corp would pay taxes on the interest income from the loans and then the investors would pay tax on income distributed to them.
Molestiae dolorum fuga nobis aut. Rem alias labore exercitationem rerum sequi ex aliquid dolores. Nulla quos modi perferendis unde et. Nulla est hic quo maxime quis magni. Accusantium vel dolor nesciunt nobis et. Voluptates dolore vel provident et eum.
Nihil quam velit tenetur quam. Beatae distinctio et facilis optio aliquid nam aspernatur reiciendis. Non nisi vel illo est blanditiis delectus illum.
Est iure qui dolor aliquam dolorem. Omnis rerum incidunt commodi totam magnam quo ea.
Nihil ducimus quis nobis sunt repudiandae. Cumque quam consectetur sequi explicabo est sed. Quam at rerum sed sint fuga saepe. Ut assumenda reiciendis corrupti est dolorem rerum.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...