Code of Federal Regulations · Section
§ 301.7701(i)-4 — (i)-4 Special Rules For Certain Entities
26 C.F.R. § 301.7701(i)-4
(a) States and municipalities—(1) In general. Regardless of whether an entity satisfies any of the requirements of section 7701(i)(2)(A), an entity is not classified as a taxable mortgage pool if—
(i) The entity is a State, territory, a possession of the United States, the District of Columbia, or any political subdivision thereof (within the meaning of § 1.103-1(b) of this chapter), or is empowered to issue obligations on behalf of one of the foregoing;
(ii) The entity issues the debt obligations in the performance of a governmental purpose; and
(iii) The entity holds the remaining interests in all assets that support those debt obligations until the debt obligations issued by the entity are retired.
(2) Governmental purpose. The term governmental purpose means an essential governmental function within the meaning of section 115. A governmental purpose does not include the mere packaging of debt obligations for re-sale on the secondary market even if any profits from the sale are used in the performance of an essential governmental function.
(3) Determinations by the Commissioner. If an entity is not described in paragraph (a)(1) of this section, but has a similar purpose, then the Commissioner may determine that the entity is not classified as a taxable mortgage pool.
(b) REITs. [Reserved]
(c) Subchapter S corporations—(1) In general. An entity that is classified as a taxable mortgage pool may not elect to be an S corporation under section 1362(a) or maintain S corporation status.
(2) Portion of an S corporation treated as a separate corporation. An S corporation is not treated as a member of an affiliated group under section 1361(b)(2)(A) solely because a portion of the S corporation is treated as a separate corporation under section 7701(i).
Authorizing Statute
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Confidentiality and disclosure of returns and return information26 U.S.C. § 6103
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Restrictions applicable to deficiencies; petition to Tax Court26 U.S.C. § 6213
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Signing of returns and other documents26 U.S.C. § 6061
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Assessment, collection, and payment26 U.S.C. § 6232
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Period of limitations on making adjustments26 U.S.C. § 6235
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Validity and priority against certain persons26 U.S.C. § 6323
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Definitions26 U.S.C. § 7701
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Partner’s return must be consistent with partnership return26 U.S.C. § 6222
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Alternative to payment of imputed underpayment by partnership26 U.S.C. § 6226
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Notice of qualification as executor or receiver26 U.S.C. § 6036
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Partners bound by actions of partnership26 U.S.C. § 6223
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Abatements26 U.S.C. § 6404
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Commissioner of Internal Revenue; other officials26 U.S.C. § 7803
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Extension of time for filing returns26 U.S.C. § 6081
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Treaty-based return positions26 U.S.C. § 6114
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Timely mailing treated as timely filing and paying26 U.S.C. § 7502
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Interest and penalties26 U.S.C. § 6233
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Certified professional employer organizations26 U.S.C. § 7705
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Accelerated cost recovery system26 U.S.C. § 168
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General requirement of return, statement, or list26 U.S.C. § 6011
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Disclosure of reportable transactions26 U.S.C. § 6111
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Rules and regulations26 U.S.C. § 7805
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Persons required to make returns of income26 U.S.C. § 6012
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Return of S corporation26 U.S.C. § 6037
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Reimbursement to State and local law enforcement agencies26 U.S.C. § 7624
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Determination at partnership level26 U.S.C. § 6221
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Partnership adjustment by Secretary26 U.S.C. § 6225
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Authority to release levy and return property26 U.S.C. § 6343
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Disclosure or use of information by preparers of returns26 U.S.C. § 7216
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Departmental regulations5 U.S.C. § 301
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Tax imposed26 U.S.C. § 1
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Notice of proceedings and adjustment26 U.S.C. § 6231
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Payment of tax by commercially acceptable means26 U.S.C. § 6311
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Sale of seized property26 U.S.C. § 6335
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Procedural requirements26 U.S.C. § 6751
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Low-income housing credit26 U.S.C. § 42
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Special rules26 U.S.C. § 1474
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Returns by exempt organizations26 U.S.C. § 6033
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Definitions and special rules26 U.S.C. § 6241
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Administrative appeal of liens26 U.S.C. § 6326
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Expenses of detection of underpayments and fraud, etc.26 U.S.C. § 7623
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Information concerning resident status26 U.S.C. § 6039E
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Identifying numbers26 U.S.C. § 6109
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Administrative adjustment request by partnership26 U.S.C. § 6227
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Authority to make credits or refunds26 U.S.C. § 6402
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Judicial review of partnership adjustment26 U.S.C. § 6234
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Failure to file notice of redetermination of foreign tax26 U.S.C. § 6689
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Income from discharge of indebtedness26 U.S.C. § 108