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SEC Filings

424B1
DITECH HOLDING CORP filed this Form 424B1 on 09/16/1997
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     As long as HCHI qualifies as a REIT, distributions made by HCHI out of its
current or accumulated earnings and profits (and not designated as capital gain
dividends) will constitute dividends taxable to its taxable U.S. Stockholders as
ordinary income. Such distributions will not be eligible for the dividends
received deduction in the case of U.S. Stockholders that are corporations.
Distributions made by HCHI that are properly designated by HCHI as capital gain
dividends will be taxable to taxable U.S. Stockholders as long-term capital
gains (to the extent that they do not exceed HCHI's actual net capital gain for
the taxable year) without regard to the period for which a U.S. Stockholder has
held his shares of Common Stock. U.S. Stockholders that are corporations may,
however, be required to treat up to 20% of certain capital gain dividends as
ordinary income. To the extent that HCHI makes distributions (not designated as
capital gain dividends) in excess of its current and accumulated earnings and
profits, such distributions will be treated first as a tax-free return of
capital to each U.S. Stockholder, reducing the adjusted basis which such U.S.
Stockholder has in his shares of Common Stock for tax purposes by the amount of
such distribution (but not below zero), with distributions in excess of a U.S.
Stockholder's adjusted basis in his shares taxable as long-term capital gains
(or short-term capital gains if the shares have been held for one year or less),
provided that the shares have been held as a capital asset. HCHI will notify
stockholders at the end of each year as to the portions of the distributions
which constitute ordinary income, net capital gain or return of capital.
Dividends declared by HCHI in October, November or December of any year and
payable to a stockholder of record on a specified date in any such month will be
treated as both paid by HCHI and received by the stockholder on December 31 of
such year, provided that the dividend is actually paid by HCHI on or before
January 31 of the following calendar year out of current or accumulated earnings
and profits. Stockholders may not include in their own income tax returns any
net operating losses or capital losses of HCHI.
 
     Distributions made by HCHI and gain arising from the sale or exchange by a
U.S. Stockholder of shares of Common Stock will not be treated as passive
activity income, and, as a result, U.S. Stockholders generally will not be able
to apply any "passive losses" against such income or gain. Distributions made by
HCHI (to the extent they do not constitute a return of capital) generally will
be treated as investment income for purposes of computing the net investment
income limitation applicable to deductions of investment interest. Gain arising
from the sale or other disposition of Common Stock, however, will not be treated
as investment income unless the U.S. Stockholder elects to reduce the amount of
such U.S. Stockholder's total net capital gain eligible for the 28% maximum
capital gains rate by the amount of such gain with respect to such Common Stock.
 
     Upon any sale or other disposition of Common Stock, a U.S. Stockholder will
recognize gain or loss for federal income tax purposes in an amount equal to the
difference between (i) the amount of cash and the fair market value of any other
property received on such sale or other disposition and (ii) the holder's
adjusted basis in such shares of Common Stock for tax purposes. Such gain or
loss will be capital gain or loss if the shares have been held by the U.S.
Stockholder as a capital asset, and will be long-term gain or loss if such
shares have been held for more than one year. In general, any loss recognized by
a U.S. Stockholder upon the sale or other disposition of shares of Common Stock
that have been held for six months or less (after applying certain holding
period rules) will be treated as a long-term capital loss, to the extent of
distributions received by such U.S. Stockholder from HCHI which were required to
be treated as long-term capital gains.
 
     The Warrants.  Upon the exercise of a Warrant, the holder will not
recognize gain or loss and will have a tax basis in the Common Stock of the
Company received equal to the holder's tax basis in the Warrant plus the
exercise price of the Warrant. The holding period for the Common Stock purchased
by exercising a Warrant will begin on the day following the date of exercise and
will not include the period during which the holder held the Warrant.
 
     Upon the sale or other disposition of a Warrant, the holder will recognize
capital gain or loss in an amount equal to the difference between the amount
realized and the holder's tax basis in the Warrant. Such a gain or loss will be
long-term if the holder's holding period is more than one year. In the event a
Warrant lapses unexercised, the holder will recognize a capital loss in an
amount equal to his tax basis in the Warrant. Such loss will be long-term if the
Warrant has been held for more than one year.
 
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