New tax rules will create compliance headaches for mortgage lenders, despite an Internal Revenue Service attempt to ease administrative burdens, tax experts said Friday.

Under a final rule issued Dec. 24, companies must book capital gains and losses for mortgages transferred between their subsidiaries.

In comment letters to the IRS, industry trade groups and leading accounting firms complained that the rule would saddle lenders with new costs and accelerated capital gains tax liabilities.

To cut the industry's administrative costs, the IRS agreed to exempt mortgage originators that do not sell any loans to unaffiliated customers.

Mark Levy, a tax partner at Arthur Andersen & Co., said that relief will not help the industry much because most mortgage lenders sell loans to the secondary market.

Compliance with the new law will be particularly daunting because lenders find it hard to place a market value on the variable-rate loans typically transferred to affiliates, said James E. O'Connor, tax counsel at the thrift trade group America's Community Bankers.

Most mortgage banking subsidiaries sell their fixed-rate mortgages, but because no significant adjustable-rate market exists, variable loans are often transferred to affiliates.

Acknowledging the lingering complaints, IRS officials said they are still considering whether to exempt all loans transferred between affiliates, even if other loans are sold.

"We remain very hopeful and confident they will take the next step," Mr. O'Connor said.

The dispute was an unintended side effect of an IRS effort to clarify rules for hedging operations.

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