© SEI 2022 For Intermediary Use Only. Do Not Distribute. 9
For example, an asset may have had income payments that were associated with the trust and were paid
100% to administrative expenses. This would not have been on the account's transactions since there was
no actual payment to the shareholder. These trust expenses will be summed and will be included in the
income and the expense section in the tax statement. The expenses are subject to the 2% AGI limitation.
D. What are the specific WHFIT regulations for each asset class?
Royalty Trust - Interest is earned on profits from properties producing gas, oil and minerals. Royalty Trust
interest will be reported on a 1099-MISC tax form and will include a written royalty trust statement.
Commodity Trust - Interest in a trust that holds precious metals or commodities. Gross income reported
will be higher than the distributions received. Commodity trusts do not make periodic distributions;
instead, its holdings are sold to pay expenses. The result is a 1099-B reportable event and proceeds, with
an associated investment expense.
HOLDRS Trust - Interest in a trust, which holds a specified group of stocks. Gross income reported will be
higher than the distributions received. The trustee charges a fee per hundred shares per quarter. These
fees will be included in gross income and the expense section of the 1099-DIV form.
Real Estate Mortgage Investment Conduit (REMIC) - A type of special-purpose vehicle used for the pooling
of mortgage loans and issuance of mortgage-backed securities. Income is reportable when earned (accrual
accounting method). When interest is non-qualified, all income is accrued and reported as OID. Due to the
accrual accounting, distributed income may not match reported income as the income may be earned in
December 2022 but not paid until January 2023.
Mortgage Backed Security Pools or MBS assets - An investment product that holds a collection of
mortgages and pays interest. Typically, these are Ginnie Mae, Fannie Mae and Freddie Mac securities.
Income is reportable based upon the record date of the interest payment.
Unit Investment Trust or UIT assets- A Unit Investment Trust (UIT) is an investment company that offers a
fixed portfolio of securities having a definite life. UITs are assembled by a sponsor and sold through brokers
to investors. A UIT portfolio may contain one of several different types of securities and a UIT can hold a
number of different types of underlying asset classes. Income reported may not match income received due
to a number of factors, which will vary depending upon the underlying asset classes held in the trust.
Reporting may be a combination of different types of WHFIT asset methods within the trust portfolio.
7. Tax reporting to clients:
A. Which IRS-required tax forms and reporting information will SPTC provide to my clients?
Tax Forms Related to Tax-Deferred Accounts:
Form 1099R, Distributions From Pensions, Annuities, Retirement or Profit Sharing Plans, IRAs,
Contracts, etc.*
Form 5498, IRA Contribution Information
*SPTC only reports 1099R's for IRAs and 403b's. Plan Sponsors are required to generate required tax documents
for any Qualified Plans custodied at SPTC.
Tax Forms Related to Taxable Accounts:
Form 1099-DIV, Dividends and Distributions
Form 1099-INT, Interest Income
Form 1099-B, Proceeds from Broker and Barter Exchange Transactions
Form 1099-OID, Original Issue Discount
Form 1099-MISC, Royalty Trust Reporting
B. When will the Tax forms be mailed to investors?
For IRA's and 403b's, the 1099-R Forms will be postmarked to your clients by January 31, 2023.
