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Official form guide
Form 1066-SQ: 1066 (Schedule Q)
IRS Form 1066 (Schedule Q) is a Quarterly Notice to Residual Interest Holder of REMIC Taxable Income or Net Loss Allocation, filed by residual interest holders for a calendar quarter ended in the specified year. The form has an OMB No. of 1545-0123.
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IRS Form 1066-SQ - 1066 (Schedule Q)
IRS Form 1066 (Schedule Q) is a Quarterly Notice to Residual Interest Holder of REMIC Taxable Income or Net Loss Allocation, filed by residual interest holders for a calendar quarter ended in the specified year. The form has an OMB No. of 1545-0123.
Risk Radar
Scan points- 1Do not change any items on your copy if you find an error; notify the REMIC instead.
- 2Failing to report income/loss from all included quarters for calendar year taxpayers on Schedule E (Form 1040).
- 3Not calculating amounts correctly when a fiscal year overlaps a calendar quarter (e.g., dividing by days in the quarter).
- 4Reporting Section 212 expenses (Line 3b) without adding them to the share of taxable income/loss.
- 5Filing without notifying the REMIC if you believe they made an error on your Schedule Q.
Plain English
This form reports how much income or loss a person owns from a REMIC (Regulated Investment Company) during a specific three-month period. It details ownership percentages and the share of the company's assets to ensure accurate tax reporting for that quarter. If your records don't match the REMIC's, this notice helps explain why.
Submission Date
- Filing date: 2018-09-13 23:00:05
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use this form when a Real Estate Mortgage Investment Conduit (REMIC) is providing you with a quarterly notice of your share of its taxable income or net loss allocation.
- Do not use this form when you are filing the main REMIC return itself, but rather when you are receiving the notification from the REMIC to report on your personal return.
- Check Form 8082 instead when you need to notify the IRS of an inconsistent treatment or request an Administrative Adjustment Request (AAR) regarding the items shown on this Schedule Q.
Form selector
Use this form or another form?
You are a pass-through entity with interests held by a disqualified organization
You must report excise tax due under section 860E(e)(6) using this form.
✓ Check the specific instructions for reporting on line 2c.
A financial institution entitled to relief under Section 1616(c)(4) of the Small Business Job Protection Act
This allows continued use of section 860E(a)(2) rules prior to amendment by the Act.
✓ Verify if your institution is subject to special rules for affiliated groups.
You are an exempt organization subject to unrelated business tax under Section 511
The amount on line 2c is treated as “unrelated business taxable income” in this scenario.
✓ Confirm the REMIC's treatment of the items when completing line 2c.
Deadline or filing window
The filing relates to a specific calendar quarter ended date. If the filer has a fiscal year that does not end with a calendar quarter, they must calculate amounts for overlapping quarters by dividing the line amount by the number of days in that quarter and multiplying it by their daily ownership percentage.
Checklist
What you need before filling it out
Purpose
Quarterly notice of share of taxable income/loss or excess inclusion · Schedule Q (Form 1066)
Filer Name/Address
Residual interest holder’s name, address, and ZIP code · Section on Form p.1
Ownership Percentage (Before)
Residual interest holder’s percentage of ownership before change · Section B, Line 1
REMIC Assets (Line 2c)
Percentage of the REMIC’s assets for the quarter represented by your interest · Section C, Line 3b
Tax Liability Rule
You must include your share of taxable income on your income tax return regardless of distribution status · Form p.2 (General rule)
Basis Decreases
Money/FMV distributed, share of losses, or deduction under section 860F(b)(1)(D)(ii) · Form p.2 (List)
Before you submit
- 1Confirm the calendar quarter ended date is correctly entered on line 1.
- 2Verify that your residual interest holder’s identifying number is present and accurate.
- 3Ensure both 'Before change' and 'End of quarter' percentages are filled in Section B.
- 4Check that you have accurately listed the percentage of REMIC assets for the quarter in Section C.
- 5If an individual, confirm that any amount on line 3b is included in gross income (in addition to line 1b).
- 6Review if your treatment aligns with the REMIC’s treatment; if not, ensure Form 8082 will be filed.
- 7Confirm you have kept a copy of this Schedule Q for your records and are ready to file it.
How to file this form
- 1Complete all required fields on Schedule Q (Form 1066), including the REMIC's identifying information, ownership percentages, and asset representation.
- 2Calculate or verify any basis adjustments that decrease your basis using the items listed on page 2.
- 3Determine if excise taxes are due based on the transactions; use Form 8831 for reporting these amounts.
- 4Keep a copy of the completed Schedule Q (Form 1066) for your records, as it does not need to be filed with your tax return unless required by specific circumstances.
- 5File this Schedule Q along with your main income tax return if you are making adjustments or reporting items that require it.
Known limitations
- 1The form applies to a quarterly notice for a residual interest holder of REMIC Taxable Income or Net Loss Allocation.
- 2If the residual interest holder is not an individual or other pass-through interest holder, completing line 3 (Section 212 expenses) is not required.
- 3Amounts includible in income (or deductible as a loss) by a residual interest holder are treated as portfolio income (loss), meaning they aren't taken into account when determining the loss from a passive activity under section 469.
- 4The line 2c amount is treated as “unrelated business taxable income” if the residual interest holder is an exempt organization subject to the unrelated business tax under section 511.
Field map
Compact field-by-field guide
Entity Info
2 items
Full legal name of the corporation and its Employer Identification Number.
Current mailing address and date of incorporation.
Income
3 items
Total revenue from business operations before deducting costs.
Direct costs attributable to producing goods sold by the corporation.
Gross receipts minus cost of goods sold and returns/allowances.
Deductions
1 items
Sum of all business expenses including compensation, rent, interest, taxes, and depreciation.
Tax
2 items
Total income minus total deductions.
Tax calculated on taxable income using the applicable corporate tax rate, minus any credits.
Signatures
1 items
An authorized corporate officer must sign and date the return.
Almost done reviewing the fields?
Fillable formOpen in Editor->The current edition is Revision September 2018. The form directs users to www.irs.gov/Form1066 for the latest information, and notes that beginning January 1, 2018, section 212 expenses cannot be deducted as a miscellaneous itemized deduction by individuals who itemize deductions due to the Tax Cuts and Jobs Act.
What changed or needs a fresh check
- Edition date — confirm the revision reads September 2018.
- OMB Number — confirm the number is 1545-0123.
- Filer identification — ensure you have provided your residual interest holder’s identifying number, name, address, and ZIP code.
- REMIC identification — verify that you have entered the REMIC’s identifying number, name, address, and ZIP code.
- Ownership percentage — confirm both 'Before change' and 'End of quarter' percentages are accurately recorded in Section B.
Quick Facts
Downloads
After you file
- 1Keep a copy of the filed IRS Form 1066 (Schedule Q).
- 2If you believe the REMIC has made an error on your Schedule Q, notify the REMIC and ask for a corrected Schedule Q.
- 3Ensure the REMIC sends a copy of the corrected Schedule Q to the IRS if one is issued.
- 4When reporting items from this schedule on your tax return, generally report them consistent with how the REMIC treated them on its filed return.
- 5If your treatment is inconsistent with the REMIC’s treatment (or the REMIC hasn't filed a return), file Form 8082 to identify and explain the inconsistency.
Sources
- SRCForm p.1 — The official title is 1066 (Schedule Q), which serves as a Quarterly Notice to Residual Interest Holder of REMIC Taxable Income or Net Loss Allocation.
- SRCInstructions p.2 — Generally, you must report REMIC items shown on your Schedule Q and any attached schedules consistent with the way the REMIC treated them on its return.
- SRCForm p.1 — Line 3b is the amount that an individual must include in gross income in addition to the amount shown on line 1b.
- SRCInstructions p.2 — If you believe the REMIC has made an error, notify the REMIC and ask for a corrected Schedule Q; do not change items on your copy.
- SRCForm p.1 — Line 2c is the Excess inclusion for the calendar quarter for your residual interest (calculated as line 2b minus line 1b, but no less than zero).
- SRCInstructions p.2 — The following items decrease a residual interest holder's basis: Money/fair market value of property distributed to you, your share of REMIC’s losses, and any deduction claimed under section 860F(b)(1)(D)(ii).
Common confusion points
Should I file Schedule Q with my tax return or keep it for records?
The instructions state to 'Keep your copy of this schedule for your records,' but also imply filing by stating, 'Don’t file it with your tax return.'
→ Keep a copy, but do not submit the form itself with the main tax return.
What happens if my treatment of REMIC items is different from how the REMIC treated them?
If there is an inconsistency in treatment (or if the REMIC hasn't filed a return), the filer must file Form 8082, Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR).
→ Check instructions for required filing of Form 8082 when treatments differ.
When do I need to use Schedule Q?
The form is used to notify residual interest holders of their share of the REMIC’s quarterly taxable income (or net loss), excess inclusion, and share of section 212 expenses for a specific calendar quarter.
→ Ensure you are filing this schedule based on the end date of the quarter.
If I am an individual filer, what do I do with line 3b?
If the residual interest holder is an individual, the amount shown on line 3b must be included in gross income in addition to the amount shown on line 1b.
→ Verify that you add the Line 3b amount to your other taxable income.
What are the two main ways my basis can decrease?
Basis decreases due to money and the fair market value of property distributed to the filer, or through the filer's share of the REMIC’s losses.
→ Review the list under 'The following items decrease your basis' on page 2.
Where do I report excise taxes related to excess inclusions?
Excise taxes on excess inclusions of REMIC residual interests are reported and paid using Form 8831, Excise Taxes on Excess Inclusions of REMIC Residual Interests.
→ Check if you need to use Form 8831 in conjunction with Schedule Q.
What is the difference between line 2b and line 1b?
Line 1b is your share of the taxable income (net loss) for the calendar quarter, while line 2b is the sum of the daily accruals under section 860E specifically for your interest for the calendar quarter.
→ Compare the two amounts to ensure proper entry on lines 1b and 2b.
Workflow map
Related forms and next steps
Before
Current
After
Often used with
⚠ If something goes wrong
- Form 8831 — This form is used to report and pay excise taxes on excess inclusions of REMIC residual interests.
Questions about IRS Form 1066-SQ
What is IRS Form 1066-SQ used for?
This form reports how much income or loss a person owns from a REMIC (Regulated Investment Company) during a specific three-month period. It details ownership percentages and the share of the company's assets to ensure accurate tax reporting for that quarter. If your records don't match the REMIC's, this notice helps explain why.
Who must file IRS Form 1066-SQ?
Residual interest holders must file IRS Form 1066 (Schedule Q). This applies whether they are individuals or other entities receiving residual interests in a REMIC.
What information does IRS Form 1066-SQ require?
The form collects information including the residual interest holder’s identifying number and name, the REMIC’s identifying number and name, ownership percentages (before change and end of quarter), and the percentage of the REMIC's assets for the quarter (Section C).
When is IRS Form 1066-SQ due?
The filing is tied to a calendar quarter ended date specified on Form 1066 (Schedule Q) itself. For fiscal year taxpayers, timing depends on how their tax year overlaps with the calendar quarters.
Where do I file IRS Form 1066-SQ?
The form must be filed according to instructions found on page 2 of the document. The source directs users to www.irs.gov/Form1066 for the latest information regarding filing locations.
How do I complete IRS Form 1066-SQ?
First, fill in the identifying numbers and names for both the residual interest holder and the REMIC. Next, enter the ownership percentages (Part B) and the asset percentage breakdown (Section C). Finally, complete the specific line items (like 1b or 2c) based on whether the filer is a calendar or fiscal year taxpayer.
What happens if IRS Form 1066-SQ is filed incorrectly?
If a residual interest holder's treatment is inconsistent with the REMIC’s, they must file Form 8082 with their original return to identify and explain that inconsistency.
Should I file Schedule Q with my tax return or keep it for records?
The instructions state to 'Keep your copy of this schedule for your records,' but also imply filing by stating, 'Don’t file it with your tax return.' Keep a copy, but do not submit the form itself with the main tax return.
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