Taxation of real estate mortgage investment conduits

(1)(a) An entity described in section 860D of the Internal Revenue Code (a real estate mortgage investment conduit or REMIC) is not subject to a tax under ORS chapter 316, 317 or 318 (and may not be treated as a corporation, partnership or trust for purposes of ORS chapter 316, 317 or 318). (b) If a REMIC engages in a prohibited transaction as defined in section 860F(a)(2) of the Internal Revenue Code, the REMIC shall be subject to a tax equal to six and six-tenths percent of the net income derived from the prohibited transaction. The tax imposed under this paragraph shall be assessed and collected under this chapter and ORS chapter 305 and shall be credited to the General Fund to be made available for general governmental expenses. (2) The income of any REMIC shall be taxable to the holders of the interests in the REMIC under ORS chapter 316, 317 or 318, whichever is applicable. (3) Taxable income or loss with respect to income received as the holder of any interest in a REMIC shall be determined under sections 860A to 860G of the Internal Revenue Code. (4) To determine the portion of the income of a REMIC that is taxable to a nonresident holder of an interest in the REMIC, there shall be included only that part derived from or connected with sources in this state, as such part is determined under rules adopted by the Department of Revenue in accordance with the general rules in ORS 316.352 (1987 Replacement Part).