### Question
How does the law define residual interest?


### Answer
Under *26 U.S.C. § 860G*, **residual interest** is defined as:

> an interest in a REMIC which is issued on the startup day, which is not a regular interest, and which is designated as a residual interest

#### Citation:
  - *26 U.S.C. § 860G*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter M-Regulated Investment Companies and Real Estate Investment Trusts > PART IV-REAL ESTATE MORTGAGE INVESTMENT CONDUITS**

