Cashmere v. State of Washington Dept of Revenue: Recent REMIC case in Washington

They didn’t even assign the financial assets – makes sense to me. Hopefully, Judges are starting to see the light.

Justice League

This is a Sept 25, 2014, Washington State supreme court ruling on REMIC taxes not exempt because Cashmere did not receive any interest in mortgages or deeds of trust to back its investment.

Cashmere v. Dept of Revenue (PDF)

Michael Gamsky testified that REMIC investments are not secured transactions because issuers do not pledge any property as security for the investments. He explained that investors who purchase REMIC certificates are beneficiaries of a trust and they have contractual rights under the pooling and servicing agreement, but they are not secured investors.

After reviewing the evidence, the superior court granted summary judgment to DOR. The Court of Appeals affirmed, holding that Cashmere’s investments were not primarily secured by first mortgages or deeds of trust because Cashmere had no power to institute foreclosure proceedings. Cashmere Valley Bank, 175 Wn. App. at 418. Thus, the bank’s investments were not secured and the deduction…

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