prohibited transaction

(2) Prohibited transaction For purposes of this part, the term “prohibited transaction” means— (A) Disposition of qualified mortgage The disposition of any qualified mortgage transferred to the REMIC other than a disposition pursuant to— (i) the substitution of a qualified replacement mortgage for a qualified mortgage (or the repurchase in lieu of substitution of a defective obligation), (ii) a disposition incident to the foreclosure, default, or imminent default of the mortgage, (iii) the bankruptcy or insolvency of the REMIC, or (iv) a qualified liquidation. (B) Income from nonpermitted assets The receipt of any income attributable to any asset which is neither a qualified mortgage nor a permitted investment. (C) Compensation for services The receipt by the REMIC of any amount representing a fee or other compensation for services. (D) Gain from disposition of cash flow investments Gain from the disposition of any cash flow investment other than pursuant to any qualified liquidation.


26 USC § 860F(a)(2)

Scoping language

For purposes of this part
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