The Internal Revenue Service may soon create new compliance headaches for mortgage originators that transfer loans between affiliates, according to several tax experts.

Under a proposed rule scheduled to go into effect Dec. 29, companies would have to book capital gains and losses for mortgages transferred between their subsidiaries, even if they have no plans to sell the loans.

"This could be a big surprise for many institutions," said Steven M. Rosenthal, national director of banking and finance tax services at KPMG Peat Marwick. "It might trap unwary banks that engage in transfers to related institutions."

In comment letters to the IRS, industry trade groups and leading accounting firms have complained that the proposed rule will saddle institutions with new compliance costs and will accelerate new capital gains tax liabilities.

"You're dealing with assets that don't have a liquid market and are difficult to appraise," said Mark Levy, a tax partner at Arthur Anderson. "The fear is that companies will have to spent a lot of time with IRS agents fighting over valuations."

The IRS proposal is of particular concern to companies with mortgage banking subsidiaries, which typically shift most of their variable rate loans to affiliated depository institutions, said James E. O'Connor, tax counsel at America's Community Bankers, the thrift trade group.

Adjustable-rate loans will be among the most difficult to evaluate, tax experts said.

"This is the way more and more mortgages are being originated," Mr. O'Connor said. "Marking to market the securities that stay within related companies makes no sense at all."

"When you get away from the plain vanilla, fixed-rate loans, which have a strong secondary market, you really do get into valuation problems," said Patrick O. Egan, director of corporate taxation at Greenpoint Financial in New York City.

The dispute is an unintended side effect of an IRS effort to clarify rules for hedging operations. Because temporary rules are set to expire Dec. 29, the IRS must make its final decision in the next few weeks. Agency officials would not comment because a ruling is near completion.

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