Important 2023 tax information

Widely Held Fixed Income Trust (WHFIT)

Included with your 2023 Consolidated Forms 1099 Since reporting to investors is based on the record date
Statement is information on your WHFITs. The WHFIT instead of the payment date, payments received by an
Additional Written Statement includes the supplemental investor in January and February with a record date in
information that the Internal Revenue Service requires be the prior year are reportable on the previous year’s tax
mailed to you by March 15, 2024. package. Furthermore, the reportable income amount
may be greater than what you received due to the “gross
up” of any expenses or taxes originally deducted by the
This document, which is divided into two main sections,
trustee prior to distribution.
will familiarize you with the information provided on your
WHFIT investments. The first section provides general Detailed information for a WHFIT security may not
information regarding WHFIT reporting. The second have been provided by the trustee if no more than 5%
section explains the information reflected on the of its aggregate principal balance was distributed or the
statement, including what is reported to the IRS. trust was established prior to dates for which such
information is required. Furthermore, trusts can
1. General information about WHFITs
structure their distributions in a way to avoid WHFIT
The WHFIT information is identified as either mortgage
reporting rules. Therefore, all WHFITs are not, at this
or non-mortgage backed securities. The majority are
time, subject to the same reporting requirements.
pools of mortgage-backed securities known as Widely
Held Mortgage Trusts (WHMT). The most common are 2. Information included on your consolidated Form
established through FNMA (“Fannie Mae”), FHLMC 1099 statement
(“Freddie Mac”), and GNMA (“Ginnie Mae”), or trusts The amounts reported on the Form 1099 may not
that invest in regular interest REMICs (real estate match your monthly statement totals. Carefully review
mortgage investment conduits),which are established your Form 1099 and supplementary tax information
as a grantor trust. Both mortgage and non-mortgage statements with your tax advisor, as expense items not
backed trusts may be subject to additional reporting reported on the Form 1099 may have multiple impacts
requirements under Treasury Regulation §1.671-5. that should be considered when completing your
tax return.
All income and principal received by the trust, as well
as expenses paid by the trust, are reportable to investors
because they own a percentage interest in each asset and
liability of a grantor trust.

Investment and Insurance Products are:

• Not Insured by the FDIC or Any Federal Government Agency
• Not a Deposit or Other Obligation of, or Guaranteed by, the Bank or Any Bank Affiliate
• Subject to Investment Risks, Including Possible Loss of the Principal Amount Invested
Consolidated Form 1099 statements include several areas Details of reportable tax information: Interest income
where WHFIT information may be shown. The totals The amounts reported for your WHFIT investments are
reported to the IRS are reflected in the Summary of often more than the actual payments due to expenses that
Reportable Information. The amounts per security that were deducted prior to the payment. The expenses for
make up the totals are shown in the Reportable Tax WHMTs are generally the fees charged by the entity that
Information for the Form 1099-B totals and Details of services the mortgages within the pool and generally run
Reportable Tax Information for Form 1099-INT totals. between 5% and 8% of the gross interest amount.
If provided by the trustee, the factors that were applied
per payment period will be displayed in the Supplemental Supplemental tax statement — WHFIT additional
Tax Statement. written statement
If provided by the trustee, the factors that were applied
Summary of reportable tax information per payment period will be displayed in the WHFIT
Listed at the beginning of your 2023 Consolidated Form Additional Written Statement. However, only total
1099 Statement will be a Summary of Reportable Tax amounts for a particular security are reportable to the IRS.
Information that represents the total amounts of all The Supplemental Tax Statement includes other details
reportable 1099-INT and 1099-B transactions. The Form that should be reviewed with your tax advisor as they may
1099-INT amounts reported here represent your reportable have multiple impacts that should be considered when
interest from WHFIT securities in addition to other completing your tax return.
reportable interest for the tax year. The 1099-B Summary
of Proceeds from Broker and Barter Exchange Transactions Where to go for more information:
amounts shown in this section include gross proceeds (less If you or your tax advisor have additional questions, please
commissions) from sales, redemptions, and principal refer to page 4 of the IRS “2023 General Instructions for
payments, which includes your WHFIT securities. Certain Information Returns (Forms 1097, 1098, 1099,
3921, 3922, 5498, and W-2G)” found at irs.gov. Wells Fargo
Reportable tax information: Form 1099-B Clearing Services, LLC has provided this link for your
Includes any proceeds (less commissions) from sales, convenience but does not control or endorse the website
redemptions, and principal payments. In accordance with and is not responsible for the products, services, content,
various tax reporting regulations, your Form 1099-B will links, privacy policy, or security policy of this website. You
include all return of principal payments you received prior or your tax advisor may wish to review the guidance
to the maturity of your WHFIT securities. provided by the IRS related to mortgage-backed securities
found in Revenue Ruling 84-10, Revenue Ruling 70-545,
Unknown term gains/losses Revenue Ruling 70-544, and Revenue Ruling 71-399.
Transactions reported in the Unknown Term Gains/Losses
section of the Form 1099-B do not include cost basis. The
cost basis on your WHFIT security is reduced at the time
the proceeds payment is applied to your account. It is
generally assumed that the cost basis is equal to the
proceeds amount resulting in no gain or loss. However, once
adjusted basis is reduced to zero, future proceeds payments
will be taxable. Clients may elect to make additional cost
basis adjustments to account for Original Issue Discount
(OID) or cost basis factors published by Unit Investment
Trusts and Royalty Trusts. Therefore, the cost basis is not
calculated and reported with the proceeds payment on
Form 1099-B.

Our firm does not provide tax or legal advice. Be sure to consult with your own tax and legal advisors before taking any action that could have tax consequences.

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