DEFINED ASSET FUNDS GOVERNMENT SEC INCOME FD GNMA SERIES 1T
497, 2001-01-19
Previous: WFS FINANCIAL AUTO LOANS INC, 424B5, 2001-01-19
Next: LEGG MASON SPECIAL INVESTMENT TRUST INC, 485BPOS, 2001-01-19




                           DEFINED ASSET FUNDS-REGISTERED TRADEMARK-
                           ----------------------------------------------------

                           GOVERNMENT SECURITIES INCOME FUND
                           GNMA SERIES--1T
                           (A UNIT INVESTMENT TRUST)

                           -  PORTFOLIO OF MORTGAGE BACKED SECURITIES
                           -  MONTHLY INCOME DISTRIBUTIONS

SPONSORS:
MERRILL LYNCH,
PIERCE, FENNER & SMITH
INCORPORATED               -----------------------------------------------------
SALOMON SMITH BARNEY INC.  The Securities and Exchange Commission has not
PRUDENTIAL SECURITIES      approved or disapproved these Securities or passed
INCORPORATED               upon the adequacy of this prospectus. Any
PAINEWEBBER INCORPORATED   representation to the contrary is a criminal offense.
DEAN WITTER REYNOLDS INC.  Prospectus dated January 19, 2001.

<PAGE>
--------------------------------------------------------------------------------

Defined Asset Funds-Registered Trademark-
Defined Asset Funds-Registered Trademark- is America's oldest and largest family
of unit investment trusts, with over $195 billion sponsored over the last 30
years. Defined Asset Funds has been a leader in unit investment trust research
and product innovation. Our family of Funds helps investors work toward their
financial goals with a full range of quality investments, including municipal,
corporate and government bond portfolios, as well as domestic and international
equity portfolios.

Defined Asset Funds offer a number of advantages:
   - A disciplined strategy of buying and holding with a long-term view is the
     cornerstone of Defined Asset Funds.
   - Fixed portfolio: Defined Funds follow a buy and hold investment strategy;
     funds are not managed and portfolio changes are limited.
   - Defined Portfolios: We choose the stocks and bonds in advance, so you know
     what you're investing in.
   - Professional research: Our dedicated research team seeks out stocks or
     bonds appropriate for a particular fund's objectives.
   - Ongoing supervision: We monitor each portfolio on an ongoing basis.

No matter what your investment goals, tolerance for risk or time horizon,
there's probably a Defined Asset Fund that suits your investment style. Your
financial professional can help you select a Defined Asset Fund that works best
for your investment portfolio.

THE FINANCIAL INFORMATION IN THIS PROSPECTUS IS AS OF THE EVALUATION DATE,
OCTOBER 31, 2000.

CONTENTS

<TABLE>
<CAPTION>
                                                    PAGE
                                                    ----
<S>                                                 <C>
Risk/Return Summary...............................    3
What You Can Expect From Your Investment..........    5
  Monthly Income..................................    5
  Return Figures..................................    5
  Records and Reports.............................    5
The Risks You Face................................    6
  Interest Rate Risk..............................    6
  Prepayment Risk.................................    6
  Expense Risk....................................    6
  Litigation Risk.................................    6
Selling or Exchanging Units.......................    6
  Sponsors' Secondary Market......................    6
  Selling Units to the Trustee....................    6
  Exchange Option.................................    7
How The Fund Works................................    7
  Pricing.........................................    7
  Evaluations.....................................    7
  Income..........................................    8
  Expenses........................................    8
  Portfolio Changes...............................    8
  Fund Termination................................    9
  Certificates....................................    9
  Trust Indenture.................................    9
  Legal Opinion...................................   10
  Auditors........................................   10
  Sponsors........................................   10
  Trustee.........................................   11
  Underwriters' and Sponsors' Profits.............   11
  Public Distribution.............................   11
  Code of Ethics..................................   11
Taxes.............................................   11
Supplemental Information..........................   13
Financial Statements..............................  D-1
</TABLE>

                                       2
<PAGE>
--------------------------------------------------------------------------------

RISK/RETURN SUMMARY

 1. WHAT IS THE FUND'S OBJECTIVE?
   The Fund seeks safety of capital and current monthly income, by investing in
   a portfolio of GNMA securities backed by the full faith and credit of the
   United States.

 2. WHAT ARE GINNIE MAES?
   Ginnie Maes are mortgage-backed securities guaranteed by the Government
   National Mortgage Association (GNMA), a U.S. government corporation. Ginnie
   Maes represent underlying mortgages on one- to four-family houses. GNMA
   guarantees the timely monthly payment of principal and interest on the Ginnie
   Maes.

 3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
 - The Fund plans to hold two issues of Ginnie Maes with a current aggregate
   face amount of $16,043,825. The Fund is a unit investment trust which means
   that, unlike a mutual fund, the Fund's portfolio is not managed.

 - Ginnie Maes are not rated but their credit quality is comparable to AAA-rated
   bonds.

 - The securities BUT NOT THE FUND OR THE UNITS are backed by the full faith and
   credit of the United States.

 - The Portfolio consists of two issues of Ginnie Maes, issued and guaranteed by
   GNMA, a United States government agency:

<TABLE>
<CAPTION>
                                                    APPROXIMATE
                                                     PORTFOLIO
                                                    PERCENTAGE
<S>                                                 <C>
-8.00% Ginnie Maes
maturing 3/15/16 to 8/15/22                               84%
-8.50% Ginnie Maes
maturing 6/15/16 to 7/15/22                               16%
</TABLE>

 4. WHAT ARE THE SIGNIFICANT RISKS?
   YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN HAPPEN FOR VARIOUS
   REASONS, INCLUDING:

 - Rising interest rates can reduce the value of your units.

 - Assuming no changes in interest rates, when you sell your units, they will
   generally be worth less than your cost because your cost included a sales
   fee.

 - The Fund will receive early returns of principal when homeowners pay down
   their mortgages sooner than expected. This happens more often when interest
   rates fall. If this happens your income will decline and you may not be able
   to reinvest the money you receive at as high a yield or as long a maturity.

 5. IS THIS FUND APPROPRIATE FOR YOU?
   Yes, if you want safety of capital and current monthly income. You will
   benefit from a professionally selected and supervised portfolio of U.S.
   government backed securities.

   The Fund is NOT appropriate for you if you want a speculative investment that
   changes to take advantage of market movements or if you cannot tolerate early
   returns of principal.

                               DEFINING YOUR INCOME

<TABLE>
<S>                                                 <C>
WHAT YOU MAY EXPECT (Payable on the 23rd day each
month):
Regular Monthly Income per 1,000 units:             $1.14
Annual Income per 1,000 units:                      $13.77
RECORD DAY: 17th day of each month
THESE FIGURES ARE ESTIMATES ON THE EVALUATION DATE; ACTUAL
PAYMENTS MAY VARY.
</TABLE>

 6. WHAT ARE THE FUND'S FEES AND EXPENSES?
   This table shows the costs and expenses you may pay, directly or indirectly,
   when you invest in the Fund.

<TABLE>
<S>                                                 <C>
INVESTOR FEES
Maximum Sales Fee (Load) on new purchases (as a
percentage of $1,000 invested)                      3.00%
</TABLE>

   Employees of some of the Sponsors and their affiliates may be charged a
   reduced sales fee of no less than $5.00 per 1,000 Units.

   The maximum sales fee is reduced if you invest at least $100,000, as follows:

<TABLE>
<CAPTION>
                                                    IF YOU INVEST:
                                                    --------------
<S>                                                 <C>
Less than $100,000                                         3.00%
$100,000 to $249,999                                       2.75%
$250,000 to $499,999                                       2.50%
$500,000 to $999,999                                       2.25%
$1,000,000 and over                                        2.00%
Maximum Exchange Fee                                       2.00%
</TABLE>

                                       3
<PAGE>
   ESTIMATED ANNUAL FUND OPERATING EXPENSES

<TABLE>
<CAPTION>
                                                      AMOUNT
                                                        PER
                                                    1,000 UNITS
                                                    -----------
<S>                                                 <C>
Trustee's Fee                                          $0.15
Portfolio Supervision,
 Bookkeeping and
 Administrative Fees
 (including updating
 expenses)                                             $0.26
Evaluator's Fee                                        $0.03
Other Operating Expenses                               $0.14
                                                       -----
TOTAL                                                  $0.58
</TABLE>

   The Sponsors historically paid updating expenses.

 7. IS THE FUND MANAGED?
   Unlike a mutual fund, the Fund is not managed and securities are not sold
   because of market changes. Rather, experienced Defined Asset Funds financial
   analysts regularly review the securities in the Fund. The Fund may sell a
   security if certain adverse credit or other conditions exist.

 8. HOW DO I BUY UNITS?
   The minimum investment is $250.

   You can buy units from any of the Sponsors and other broker-dealers. The
   Sponsors are listed later in this prospectus. Some banks may offer units for
   sale through special arrangements with the Sponsors, although certain legal
   restrictions may apply.

<TABLE>
<S>                                                 <C>
UNIT PRICE PER 1,000 UNITS                          $ 186.59
(as of October 31, 2000)
</TABLE>

   Unit price is based on the net asset value of the Fund plus the up-front
   sales fee. An amount equal to any principal cash, as well as net accrued but
   undistributed interest on the unit, is added to the unit price. An
   independent evaluator prices the bonds at 3:30 p.m. Eastern time every
   business day. Unit price changes every day with changes in the prices of the
   bonds in the Fund.

 9. HOW DO I SELL UNITS?
   You may sell your units at any time to any Sponsor or the Trustee for the net
   asset value determined at the close of business on the date of sale. You will
   not pay any other fee when you sell your units.

10. HOW ARE DISTRIBUTIONS MADE AND TAXED?
   Generally, distributions of income from the Fund will be included in your
   gross income as dividends, but will not be eligible for the
   dividends-received deduction for corporations. If you have held units for
   more than one year you may be entitled to a 20% maximum federal tax rate for
   gains from the disposition of these units. The Fund is not likely to be
   suitable for foreign investors not engaged in a U.S. trade or business.

11. WHAT OTHER SERVICES ARE AVAILABLE?

   REINVESTMENT
   You will receive your monthly income in cash unless you choose to compound
   your income by reinvesting in additional units of the Fund at a reduced sales
   fee. CONTACT YOUR BROKER, DEALER OR FINANCIAL INSTITUTION.

   EXCHANGE PRIVILEGES
   You may exchange units of this Fund for units of certain other Defined Asset
   Funds. You may also exchange into this Fund from certain other funds. We
   charge a reduced sales fee on exchanges.

                                       4
<PAGE>
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT

MONTHLY INCOME

The Fund will pay you regular monthly income. Your monthly income may vary
because of:

  - prepayments on the underlying mortgages;
  - elimination of one or more securities from the Fund's portfolio because of
    redemptions or sales; or
  - a change in the Fund's expenses;

Changes in interest rates generally will not affect your monthly income because
the portfolio is fixed, but could result in increased payments on the mortgages
underlying the Ginnie Maes in the Fund.

Along with your monthly income, you will receive your share of any available
principal.

RETURN FIGURES

We cannot predict your actual return, which will vary with unit price, how long
you hold your investment and changes in the portfolio, interest income and
expenses.

ESTIMATED CURRENT RETURN equals the estimated annual cash to be received from
the securities in the Fund less estimated annual Fund expenses, divided by the
Unit Price (including the maximum sales fee):

<TABLE>
<S>               <C><C>
Estimated Annual  -     Estimated
Interest Income      Annual Expenses
------------------------------------
             Unit Price
</TABLE>

ESTIMATED LONG TERM RETURN is a measure of the estimated return over the
estimated life of the Fund. Unlike Estimated Current Return, Estimated Long Term
Return reflects maturities, discounts and premiums of the securities in the
Fund. It is an average of the yields to maturity of the individual securities in
the portfolio, adjusted to reflect the Fund's maximum sales fee and estimated
expenses. We calculate the average yield for the portfolio by weighting each
security's yield by its market value and the time remaining to the call or
maturity date.

Yields on individual securities depend on many factors including general
conditions of the bond markets, the size of a particular offering and the
maturity and quality rating of the particular issues. Yields can vary among
bonds with similar maturities, coupons and ratings.

These return quotations are designed to be comparative rather than predictive.

RECORDS AND REPORTS

You will receive:

- a monthly statement of income payments and any principal payments;
- a notice from the Trustee when new securities are deposited in exchange or
  substitution for securities originally deposited;
- an annual report on Fund activity; and
- annual tax information. THIS WILL ALSO BE SENT TO THE IRS. YOU MUST REPORT THE
  AMOUNT OF INTEREST RECEIVED DURING THE YEAR.

You may request:

- copies of evaluations to enable you to comply with federal and state tax
  reporting requirements; and
- audited financial statements of the Fund.

You may inspect records of Fund transactions at the Trustee's office during
regular business hours.

                                       5
<PAGE>
THE RISKS YOU FACE

INTEREST RATE RISK

Investing involves risks, including the risk that your investment will decline
in value if interest rates rise. Generally, securities with longer maturities
will change in value more than securities with shorter maturities. The mortgages
underlying the Ginnie Maes in the Fund are more likely to be prepaid when
interest rates decline. This would result in early returns of principal to you
and could result in early termination of the Fund. Of course, we cannot predict
how interest rates may change.

PREPAYMENT RISK

You may receive payments of principal sooner than expected if many homeowners
prepay the mortgages that underly the Ginnie Maes. There is no prepayment
protection. Interest payments will also decrease as principal is returned.

EXPENSE RISK

If many investors sell their units, the Fund will have to sell securities. This
could increase your share of Fund expenses.

LITIGATION RISK

We do not know of any pending litigation that might have a material adverse
effect upon the Fund.

SELLING OR EXCHANGING UNITS

You can sell your units at any time for a price based on net asset value. Your
net asset value is calculated each business day by:

  - ADDING the value of the securities, net accrued interest, cash and any other
    Fund assets;
  - SUBTRACTING accrued but unpaid Fund expenses, unreimbursed Trustee advances,
    cash held to buy back units or for distribution to investors and any other
    Fund liabilities; and
  - DIVIDING the result by the number of outstanding units.

Your net asset value when you sell may be more or less than your cost because of
sales fees, market movements and changes in the portfolio.

SPONSORS' SECONDARY MARKET

While we are not obligated to do so, we will buy back units at net asset value
without any other fee or charge. We may resell the units to other buyers or to
the Trustee. You should consult your financial professional for current market
prices to determine if other broker-dealers or banks are offering higher prices.

We have maintained a secondary market continuously for over 30 years, but we
could discontinue it without prior notice for any business reason.

SELLING UNITS TO THE TRUSTEE

Regardless of whether we maintain a secondary market, you can sell your units to
the Trustee at any time by sending the Trustee a letter (with any outstanding
certificates if you hold Unit certificates). You must properly endorse your
certificates (or execute a written transfer instrument with signatures
guaranteed by an eligible institution). Sometimes, additional

                                       6
<PAGE>
documents are needed such as a trust document, certificate of corporate
authority, certificate of death or appointment as executor, administrator or
guardian.

Within seven days after your request and the necessary documents are received,
the Trustee will mail a check to you. Contact the Trustee for additional
information.

As long as we are maintaining a secondary market, the Trustee will sell your
units to us at a price based on net asset value. If there is no secondary
market, the Trustee may sell your units in the over-the-counter market for a
higher price, but it is not obligated to do so. In that case, you will receive
the net proceeds of the sale.

If the Fund does not have cash available to pay you for units you are selling,
the agent for the Sponsors will select securities to be sold. Securities will be
selected based on market and credit factors. These sales could be made at times
when the securities would not otherwise be sold and may result in your receiving
less than the unit par value and also reduce the size and diversity of the Fund.

There could be a delay in paying you for your units:

  - if the New York Stock Exchange is closed (other than customary weekend and
    holiday closings);
  - if the SEC determines that trading on the New York Stock Exchange is
    restricted or that an emergency exists making sale or evaluation of the
    bonds not reasonably practicable; and
  - for any other period permitted by SEC order.

EXCHANGE OPTION

You may exchange units of certain Defined Asset Funds for units of this Fund at
a maximum exchange fee of 2.00%. You may exchange units of this Fund for units
of certain other funds at a reduced sales fee if your investment goals change.
In addition, you may exchange into this Fund from certain other Defined Asset
Funds and unit trusts. To exchange units, you should talk to your financial
professional about what funds are exchangeable, suitable and currently
available.

Normally, an exchange is taxable and you must recognize any gain or loss on the
exchange. However, the IRS may try to disallow a loss if the portfolios of the
two funds are not materially different; you should consult your own tax adviser.

We may amend or terminate this exchange option at any time without notice.

HOW THE FUND WORKS

PRICING

The price of a unit includes interest accrued on the securities, less expenses,
from the most recent Record Day up to, but not including, the settlement date,
which is usually three business days after the purchase date of the unit.

A portion of the price of a unit consists of cash so that the Trustee can
provide you with regular monthly income. When you sell your units you will
receive your share of this cash.

EVALUATIONS

An independent Evaluator values the securities on each business day (excluding

                                       7
<PAGE>
Saturdays, Sundays and the following holidays as observed by the New York Stock
Exchange: New Year's Day, Presidents' Day, Martin Luther King, Jr. Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas;
and the following federal holidays: Columbus Day and Veterans Day). Values are
based on current bid or offer prices for the securities or comparable bonds. In
the past, the difference between bid and offer prices of Ginnie Mae securities
of the type in this Fund has ranged between 0.25% and 0.50%.

INCOME

The Trustee credits interest to an Income Account and other receipts to a
Capital Account. The Trustee may establish a Reserve Account by withdrawing from
these accounts amounts it considers appropriate to pay any material liability.
These accounts do not bear interest.

EXPENSES

The Trustee is paid monthly. It also benefits when it holds cash for the Fund in
non-interest bearing accounts. The Trustee may also receive additional amounts:

  - to reimburse the Trustee for the Fund's operating expenses;
  - for extraordinary services and costs of indemnifying the Trustee and the
    Sponsors;
  - costs of actions taken to protect the Fund and other legal fees and
    expenses;
  - expenses for keeping the Fund's registration statement current; and
  - Fund termination expenses and any governmental charges.

The Sponsors are currently reimbursed up to 55 CENTS per $1,000 face amount
annually for providing portfolio supervisory, bookkeeping and administrative
services and for any other expenses properly chargeable to the Fund. Legal,
typesetting, electronic filing and regulatory filing fees and expenses
associated with updating the Portfolio's registration statement yearly are also
now chargeable to the Portfolio. While this fee may exceed the amount of these
costs and expenses attributable to this Fund, the total of these fees for all
Series of Defined Asset Funds will not exceed the aggregate amount attributable
to all of these Series for any calendar year. The Fund also pays the Evaluator's
fees.

The Trustee's, Sponsors' and Evaluator's fees may be adjusted for inflation
without investors' approval.

The Sponsors will pay advertising and selling expenses at no charge to the Fund.
If Fund expenses exceed initial estimates, the Fund will owe the excess. The
Trustee has a lien on Fund assets to secure reimbursement of Fund expenses and
may sell bonds if cash is not available.

PORTFOLIO CHANGES

The Sponsors and Trustee are not liable for any default or defect in a security.

Unlike a mutual fund, the portfolio is designed to remain intact and we may keep
securities in the portfolio even if their credit quality declines or other
adverse financial circumstances occur. However, we may sell a security in
certain cases if we believe that certain adverse credit or certain other
conditions exist.

                                       8
<PAGE>
If we maintain a secondary market in units but are unable to sell the units that
we buy in the secondary market, we will redeem units, which may affect the
composition of the portfolio. Units offered in the secondary market may not
represent the same face amount of securities that they did originally.

We decide whether or not to offer units for sale that we acquire in the
secondary market after reviewing:

  - diversity of the portfolio;
  - size of the Fund relative to its original size;
  - ratio of Fund expenses to income;
  - current and long-term returns;
  - degree to which units may be selling at a premium over par; and
  - cost of maintaining a current prospectus.

FUND TERMINATION

The Fund will terminate following the stated maturity or sale of the last
security in the portfolio. The Fund may also terminate earlier with the consent
of investors holding 51% of the units or if total assets of the Fund have fallen
below 40% of the face amount of securities deposited. We will decide whether to
terminate the Fund early based on the same factors used in deciding whether or
not to offer units in the secondary market.

When the Fund is about to terminate you will receive a notice, and you will be
unable to sell your units after that time. On or shortly before termination, we
will sell any remaining securities, and you will receive your final
distribution. Any security that cannot be sold at a reasonable price may
continue to be held by the Trustee in a liquidating trust pending its final
sale.

You will pay your share of the expenses associated with termination, including
brokerage costs in selling securities. This may reduce the amount you receive as
your final distribution.

CERTIFICATES

Certificates for units are issued on request. You may transfer certificates by
complying with the requirements for redeeming certificates, described above. You
can replace lost or mutilated certificates by delivering satisfactory indemnity
and paying the associated costs.

TRUST INDENTURE

The Fund is a "unit investment trust" governed by a Trust Indenture, a contract
among the Sponsors, the Trustee and the Evaluator, which sets forth their duties
and obligations and your rights. A copy of the Indenture is available to you on
request to the Trustee. The following summarizes certain provisions of the
Indenture.

The Sponsors and the Trustee may amend the Indenture without your consent:

  - to cure ambiguities;
  - to correct or supplement any defective or inconsistent provision;
  - to make any amendment required by any governmental agency; or
  - to make other changes determined not to be materially adverse to your best
    interest (as determined by the Sponsors).

Investors holding 51% of the units may amend the Indenture. Every investor must
consent to any amendment that changes the

                                       9
<PAGE>
51% requirement. No amendment may reduce your interest in the Fund without your
written consent.

The Trustee may resign by notifying the Sponsors. The Sponsors may remove the
Trustee without your consent if:

  - it fails to perform its duties and the Sponsors determine that its
    replacement is in your best interest; or
  - it becomes incapable of acting or bankrupt or its affairs are taken over by
    public authorities.

Investors holding 51% of the units may remove the Trustee. The Evaluator may
resign or be removed by the Sponsors and the Trustee without the consent of
investors. The resignation or removal of either becomes effective when a
successor accepts appointment. The Sponsors will try to appoint a successor
promptly; however, if no successor has accepted within 30 days after notice of
resignation, the resigning Trustee or Evaluator may petition a court to appoint
a successor.

Any Sponsor may resign as long as one Sponsor with a net worth of $2 million
remains and agrees to the resignation. The remaining Sponsors and the Trustee
may appoint a replacement. If there is only one Sponsor and it fails to perform
its duties or becomes bankrupt the Trustee may:

  - remove it and appoint a replacement Sponsor;
  - liquidate the Fund; or
  - continue to act as Trustee without a Sponsor.

Merrill Lynch, Pierce, Fenner & Smith Incorporated acts as agent for the
Sponsors.

The Trust Indenture contains customary provisions limiting the liability of the
Trustee, the Sponsors and the Evaluator.

LEGAL OPINION

Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, as
special counsel for the Sponsors, has given an opinion that the units are
validly issued.

AUDITORS

Deloitte & Touche LLP, 2 World Financial Center, New York, New York 10281,
independent accountants, audited the Statement of Condition included in this
prospectus.

SPONSORS

The Sponsors are:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (a wholly-owned subsidiary of
Merrill Lynch & Co., Inc.)
P.O. Box 9051,
Princeton, NJ 08543-9051
SALOMON SMITH BARNEY INC. (an indirectly wholly-owned subsidiary of Citigroup
Inc.)
7 World Trade Center--40th Floor,
New York, NY 10048
DEAN WITTER REYNOLDS INC. (a principal operating subsidiary of Morgan Stanley
Dean Witter & Co.)
Two World Trade Center--59th Floor,
New York, NY 10048
PRUDENTIAL SECURITIES INCORPORATED (an
indirect wholly-owned subsidiary of the
Prudential Insurance Company of America)
One New York Plaza
New York, NY 10292

                                       10
<PAGE>
PAINEWEBBER INCORPORATED (an indirect subsidiary of UBS AG and an affiliate of
UBS Warburgh LLC)
1285 Avenue of the Americas,
New York, NY 10019

Each Sponsor is a Delaware corporation and it, or its predecessor, has acted as
sponsor to many unit investment trusts. As a registered broker-dealer each
Sponsor buys and sells securities (including investment company shares) for
others (including investment companies) and participates as an underwriter in
various selling groups.

TRUSTEE

The Chase Manhattan Bank, Unit Investment Trust Departament, 4 New York
Plaza--6th Floor, New York, New York 10004, is the Trustee. It is supervised by
the Federal Deposit Insurance Corporation, the Board of Governors of the Federal
Reserve System and New York State banking authorities.

UNDERWRITERS' AND SPONSORS' PROFITS

Underwriters receive sales charges when they sell units. The Sponsors also
realized a profit or loss on the initial deposit of the securities. Any cash
made available by you to the Sponsors before the settlement date for those units
may be used in the Sponsors' businesses to the extent permitted by federal law
and may benefit the Sponsors.

In maintaining a secondary market, the Sponsors will also realize profits or
sustain losses in the amount of any difference between the prices at which they
buy units and the prices at which they resell or redeem them.

PUBLIC DISTRIBUTION

The Sponsors do not intend to qualify units for sale in any foreign countries.
This prospectus does not constitute an offer to sell units in any country where
units cannot lawfully be sold.

CODE OF ETHICS

The Fund and the Agent for the Sponsors have each adopted a code of ethics
requiring reporting of personal securities transactions by its employees with
access to information on Fund transactions. Subject to certain conditions, the
codes permit employees to invest in Fund securities for their own accounts. The
codes are designed to prevent fraud, deception and misconduct against the Fund
and to provide reasonable standards of conduct. These codes are on file with the
Commission and you may obtain a copy by contacting the Commission at the address
listed on the back cover of this prospectus.

TAXES

The following summary describes some of the important income tax consequences of
holding units. It assumes that you are not a dealer, financial institution,
insurance company or other investor with special circumstances or subject to
special rules. You should consult your own tax adviser about your particular
circumstances.

In the opinion of our counsel, under existing law:

TAXATION OF THE FUND

The Fund intends to qualify and elect to be treated as a "regulated investment
company." Qualification and election as a "regulated investment company" involve
no

                                       11
<PAGE>
supervision of investment policy or management by any governmental agency. It is
anticipated that the Fund will not be subject to federal income tax or the 4%
excise tax on certain undistributed income of "regulated investment companies"
because the Indenture requires the Fund to distribute in a timely manner the
required percentage of its taxable income to qualify for exemption from these
taxes.

DISTRIBUTIONS

Generally, distributions of the Fund's interest income, ordinary gain and any
net short-term capital gain will be taxable to you as ordinary income.

Distributions that exceed the Fund's taxable income will be treated as a return
of capital and will reduce your basis in your units and, to the extent such
distributions exceed your basis, will be treated as a gain from the sale of your
units (as discussed below). Distributions that are taxable to you as ordinary
income will be treated as dividends for federal income tax purposes but will not
give rise to a dividends-received deduction for corporations.

Although all or part of the Fund's taxable income for a calendar year may be
distributed shortly after the end of the calendar year, you will be treated for
federal income tax purposes as having received this distribution during the
calendar year. Distributions may also be subject to state and local taxation,
and you should consult your tax adviser in this regard.

You will be taxed in the manner described above regardless of whether you
actually receive distributions from the Fund or you elect to have distributions
automatically reinvested.

GAIN OR LOSS UPON DISPOSITION

You will generally recognize capital gain or loss when you dispose of your units
(by sale, redemption or otherwise). If securities are distributed to you when
you redeem your units, you will generally recognize gain or loss in an amount
equal to the difference between your basis in your units and the fair market
value of those securities. Any capital gain or loss that you recognize on a
disposition of your Units will be long-term if you held your Units for more than
one year and short-term otherwise. However, any capital loss on the sale or
redemption of a unit you have held for six months or less will be a long-term
capital loss to the extent of any capital gain dividends previously distributed
to you by the Fund. The deduction for capital losses is subject to limitations.
If you have held your units for more than one year, you may be entitled to a 20%
maximum federal tax rate for gains from the disposition of those units. You
should consult your tax adviser in this regard.

Payments of principal on underlying mortgages or sales of securities by the Fund
may give rise to gain to the Fund. The amount of gain will be based upon the
cost of the security to the Fund (without regard to the value of the security
when you purchased your units). Distributions of this gain generally will be
taxable to you and generally will not reduce your basis in your units.
Accordingly, you may have a corresponding capital loss (or a reduced amount of
gain) on a subsequent sale or redemption of your Units.

                                       12
<PAGE>
TAX REPORTING

The federal tax status of each year's distributions will be reported to you and
to the Internal Revenue Service.

FOREIGN INVESTORS

The above discussion relates only to the federal income tax status of the Fund
and to the tax treatment of distributions by the Fund to U.S. investors. If you
are not a U.S. citizen or resident, you should be aware that Fund distributions
generally will be subject to withholding tax at a rate of 30% (or a lower
applicable treaty rate). Because interest income of the type received by the
Fund generally would not have been subject to withholding if you had received it
directly, an investment in the Fund is likely to be appropriate for you only
when you can use a foreign tax credit or corresponding tax benefit in respect of
the withholding taxes. You should consult your tax adviser to determine whether
investment in the Fund is appropriate for you.

RETIREMENT PLANS

You may with to purchase units for an Individual Retirement Account (IRA) or
other retirement plan. Generally, capital gains and income received in each of
these plans are exempt from federal taxation. All distributions from such plans
are generally treated as ordinary income but may, in some cases, be eligible for
tax-deferred rollover treatment. You should consult your attorney or tax adviser
about the specific tax rules relating to these plans are offered by brokerage
firms, including ths Sponsors of this Fund, and other financial institutions.
Fees and charges with respect to such plans may vary.

SUPPLEMENTAL INFORMATION

You can receive at no cost supplemental information about the Fund by calling
the Trustee. The supplemental information includes more detailed risk disclosure
about the Ginnie Maes that may be in the Fund's portfolio and general
information about the structure and operation of the Fund. The supplemental
information is also available from the SEC.

                                       13
<PAGE>

          DEFINED ASSET FUNDS - GOVERNMENT SECURITIES INCOME FUND,
          GNMA SERIES - 1T

          REPORT OF INDEPENDENT ACCOUNTANTS

          The Sponsors, Trustee and Holders
          of Defined Asset Funds - Government Securities Income Fund,
          GNMA Series - 1T:

          We have audited the accompanying statement of condition of Defined
          Asset Funds - Government Securities Income Fund, GNMA Series - 1T,
          including the portfolio, as of October 31, 2000 and the related
          statements of operations and of changes in net assets for the years
          ended October 31, 2000, 1999 and 1998. These financial statements are
          the responsibility of the Trustee. Our responsibility is to express an
          opinion on these financial statements based on our audits.

          We conducted our audits in accordance with auditing standards
          generally accepted in the United States of America. Those standards
          require that we plan and perform the audit to obtain reasonable
          assurance about whether the financial statements are free of material
          misstatement. An audit includes examining, on a test basis, evidence
          supporting the amounts and disclosures in the financial statements.
          Securities owned at October 31, 2000, as shown in such portfolio, were
          confirmed to us by The Chase Manhattan Bank, the Trustee. An audit
          also includes assessing the accounting principles used and significant
          estimates made by the Trustee, as well as evaluating the overall
          financial statement presentation. We believe that our audits provide a
          reasonable basis for our opinion.

          In our opinion, the financial statements referred to above present
          fairly, in all material respects, the financial position of Defined
          Asset Funds - Government Securities Income Fund, GNMA Series - 1T at
          October 31, 2000 and the results of its operations and changes in its
          net assets for the above-stated years in conformity with accounting
          principles generally accepted in the United States of America.


          DELOITTE & TOUCHE LLP

          New York, N.Y.
          December 8, 2000


                                     D - 1.
<PAGE>

     DEFINED ASSET FUNDS - GOVERNMENT SECURITIES INCOME FUND,
     GNMA SERIES - 1T


     STATEMENT OF CONDITION
     As of October 31, 2000

<TABLE>
     <S>                                                                                <C>             <C>
     TRUST PROPERTY:
       Investment in marketable securities -
          at value (cost $ 16,200,741 )(Note 1)........                                                 $16,331,190
       Accrued interest ...............................                                                     107,997
       Cash - income ..................................                                                      18,426
       Cash - principal ...............................                                                       3,735
                                                                                                        -----------
         Total trust property .........................                                                  16,461,348


     LESS LIABILITIES:
       Accrued Sponsors' fees .........................                                      20,093
       Trustee's fees and expenses payable ............                                       2,400          22,493
                                                                                        -----------     -----------


     NET ASSETS, REPRESENTED BY:
       90,229,752 units of fractional undivided
          interest outstanding (Note 3)................                                  16,334,925

       Undistributed net investment income ............                                     103,930     $16,438,855
                                                                                        -----------     ===========

     UNIT VALUE ($ 16,438,855 / 90,229,752 units ).....                                                 $    .18219
                                                                                                        ===========
</TABLE>

                       See Notes to Financial Statements.


                                     D - 2.
<PAGE>

     DEFINED ASSET FUNDS - GOVERNMENT SECURITIES INCOME FUND,
     GNMA SERIES - 1T


     STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                               Years Ended October 31,
                                                                        2000              1999              1998
                                                                        ----              ----              ----

     <S>                                                            <C>               <C>               <C>
     INVESTMENT INCOME:
       Interest income ........................                     $ 1,427,142       $ 1,878,276       $ 2,775,945
       Trustee's fees and expenses ............                         (33,040)          (40,393)          (50,922)
       Sponsors' fees .........................                         (24,469)          (21,623)          (21,945)
                                                                    ------------------------------------------------
       Net investment income ..................                       1,369,633         1,816,260         2,703,078
                                                                    ------------------------------------------------


     REALIZED AND UNREALIZED LOSS
       ON INVESTMENTS:
       Realized loss on
         securities sold or redeemed ..........                         (31,174)          (79,564)          (70,303)
       Unrealized depreciation
         of investments .......................                        (180,722)         (535,676)         (314,055)
                                                                    ------------------------------------------------
       Net realized and unrealized
         loss on investments ...........                               (211,896)         (615,240)         (384,358)
                                                                    ------------------------------------------------


     NET INCREASE IN NET ASSETS
       RESULTING FROM OPERATIONS ..............                     $ 1,157,737       $ 1,201,020       $ 2,318,720
                                                                    ================================================
</TABLE>

                       See Notes to Financial Statements.


                                     D - 3.
<PAGE>

     DEFINED ASSET FUNDS - GOVERNMENT SECURITIES INCOME FUND,
     GNMA SERIES - 1T


     STATEMENTS OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
                                                                               Years Ended October 31,
                                                                        2000              1999              1998
                                                                        ----              ----              ----

     <S>                                                            <C>               <C>               <C>
     OPERATIONS:
       Net investment income ..................                     $ 1,369,633       $ 1,816,260       $ 2,703,078
       Realized loss on
         securities sold or redeemed ..........                         (31,174)          (79,564)          (70,303)
       Unrealized depreciation
         of investments .......................                        (180,722)         (535,676)         (314,055)
                                                                    ------------------------------------------------
       Net increase in net assets
         resulting from operations ............                       1,157,737         1,201,020         2,318,720
                                                                    ------------------------------------------------
     DISTRIBUTIONS TO HOLDERS (Note 2):
       Income  ................................                      (1,389,162)       (1,874,787)       (2,770,046)
       Principal ..............................                      (2,901,961)       (8,723,012)       (9,822,029)
                                                                    ------------------------------------------------
       Total distributions ....................                      (4,291,123)      (10,597,799)      (12,592,075)
                                                                    ------------------------------------------------
     SHARE TRANSACTIONS:
       Redemption amounts - income ............                          (3,715)           (3,810)           (5,736)
       Redemption amounts - principal .........                        (666,634)         (691,870)       (1,046,721)
                                                                    ------------------------------------------------
       Total share transactions ...............                        (670,349)         (695,680)       (1,052,457)
                                                                    ------------------------------------------------

     NET DECREASE IN NET ASSETS ...............                      (3,803,735)      (10,092,459)      (11,325,812)

     NET ASSETS AT BEGINNING OF YEAR ..........                      20,242,590        30,335,049        41,660,861
                                                                    ------------------------------------------------
     NET ASSETS AT END OF YEAR ................                     $16,438,855       $20,242,590       $30,335,049
                                                                    ================================================
     PER UNIT:
       Income distributions during
         year .................................                     $    .01518       $    .01955       $    .02822
                                                                    =============================s==================
       Principal distributions during
         year .................................                     $    .03175       $    .09078       $    .10032
                                                                    ================================================
       Net asset value at end of
         year .................................                     $    .18219       $    .21639       $    .31423
                                                                    ================================================
     TRUST UNITS:
       Redeemed during year ...................                       3,315,297         2,992,000         2,851,959
       Outstanding at end of year .............                      90,229,752        93,545,049        96,537,049
                                                                    ================================================
</TABLE>

                       See Notes to Financial Statements.


                                     D - 4.
<PAGE>

          DEFINED ASSET FUNDS - GOVERNMENT SECURITIES INCOME FUND,
          GNMA SERIES - 1T

          NOTES TO FINANCIAL STATEMENTS

     1.   SIGNIFICANT ACCOUNTING POLICIES

          The Fund is registered under the Investment Company Act of 1940 as a
          Unit Investment Trust. The following is a summary of significant
          accounting policies consistently followed by the Fund in the
          preparation of its financial statements. The policies are in
          conformity with accounting principles generally accepted in the United
          States of America.

           (A)      Securities are stated at value as determined by the
                    Evaluator based on bid side evaluations for the securities.

           (B)      The Fund is not subject to income taxes. Accordingly, no
                    provision for such taxes is required.

           (C)      Interest income is recorded as earned.

     2.   DISTRIBUTIONS

          Distributions of combined interest and principal (plus any prepayments
          and redemption proceeds) are made to Holders each month. Receipts
          other than interest and principal paydowns, after deductions for
          redemptions and applicable expenses, are also distributed
          periodically.

     3.   NET CAPITAL

<TABLE>
     <S>                                                                                                <C>
          Cost of 90,229,752 units at Date of Deposit ................                                 $ 93,987,929
          Less sales charge ..........................................                                    3,702,497
                                                                                                        -----------
          Net amount applicable to Holders ...........................                                   90,285,432
          Redemptions of units - net cost of 20,902,080 units redeemed
            less redemption amounts (principal).......................                                   12,288,042
          Realized loss on securities sold or redeemed ...............                                     (891,380)
          Principal distributions ....................................                                  (85,477,618)
          Unrealized appreciation of investments .....................                                      130,449
                                                                                                        -----------

          Net capital applicable to Holders ..........................                                  $16,334,925
                                                                                                        ===========
</TABLE>

     4.   INCOME TAXES

          As of October 31, 2000, unrealized appreciation of investments, based
          on cost for Federal income tax purposes, aggregated $130,449, all of
          which related to appreciated securities. The cost of investment
          securities for Federal income tax purposes was $16,200,741 at October
          31, 2000.


                                     D - 5.
<PAGE>

     DEFINED ASSET FUNDS - GOVERNMENT SECURITIES INCOME FUND,
     GNMA SERIES - 1T

     PORTFOLIO
     As of October 31, 2000

<TABLE>
<CAPTION>
                                                             Range of
                                                 Interest     Stated            Face
        Security  Description                      Rate     Maturities(2)      Amount            Cost          Value(1)
     ---------------------------------            ------- ---------------  ---------------  ---------------  ---------------
<S>                                                <C>       <C>           <C>              <C>              <C>
   1 Government National Mortgage Association      8.000%    03/15/16      $    13,551,027  $    13,631,146  $    13,773,345
     Modified Pass-Through Mortgage-Backed                      to
     Securities                                              08/15/22

   2 Government National Mortgage Association      8.500     06/15/16            2,492,798        2,569,595        2,557,845
     Modified Pass-Through Mortgage-Backed                      to
     Securities                                              07/15/22


                                                                           ---------------  ---------------  ---------------
     TOTAL                                                                 $    16,043,825  $    16,200,741  $    16,331,190
                                                                           ===============  ===============  ===============
</TABLE>

     (1) See Notes 1 to Financial Statements.

     (2) On the Date of Deposit, the range of stated maturities
         was as follows:

         8.00% GNMA - 08/15/14 to 08/15/22

         8.50% GNMA - 08/15/14 to 07/15/22


                                     D - 6.
<PAGE>
              Defined
            Asset Funds-Registered Trademark-

<TABLE>
<S>                                      <C>
HAVE QUESTIONS ?                         GOVERNMENT SECURITIES INCOME FUND
Request the most recent free             GNMA SERIES--1T
Information Supplement                   (A Unit Investment Trust)
that gives more details about            ---------------------------------------
the Fund, by calling:                    This Prospectus does not contain
The Chase Manhattan Bank                 complete information about the
1-800-323-1508                           investment company filed with the
                                         Securities and Exchange Commission in
                                         Washington, D.C. under the:
                                         - Securities Act of 1933 (file no.
                                         33-42310) and
                                         - Investment Company Act of 1940 (file
                                         no. 811-2810).
                                         TO OBTAIN COPIES AT PRESCRIBED RATES--
                                         WRITE: Public Reference Section of the
                                         Commission
                                         450 Fifth Street, N.W., Washington,
                                         D.C. 20549-6009
                                         CALL: 1-800-SEC-0330.
                                         VISIT: http://www.sec.gov.
                                         ---------------------------------------
                                         No person is authorized to give any
                                         information or representations about
                                         this Fund not contained in this
                                         Prospectus or the Information
                                         Supplement, and you should not rely on
                                         any other information.
                                         ---------------------------------------
                                         When units of this Fund are no longer
                                         available, this Prospectus may be used
                                         as a preliminary prospectus for a
                                         future series, but some of the
                                         information in this Prospectus will be
                                         changed for that series.
                                         UNITS OF ANY FUTURE SERIES MAY NOT BE
                                         SOLD NOR MAY OFFERS TO BUY BE ACCEPTED
                                         UNTIL THAT SERIES HAS BECOME EFFECTIVE
                                         WITH THE SECURITIES AND EXCHANGE
                                         COMMISSION. NO UNITS CAN BE SOLD IN ANY
                                         STATE WHERE A SALE WOULD BE ILLEGAL.
                                                                     14036--1/01
</TABLE>


© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission