SECTION 5. EXAMPLE

.01 Facts . Bank X is a calendar year taxpayer that determines its taxable income using an accrual method of accounting. For 2007, Bank X’s accrued but uncollected interest (determined under § 1.446–2) is $51,600. Bank X uses the safe harbor method of accounting described in SECTION 4 of this revenue procedure to determine the amount of uncollected interest for which the Bank has a reasonable expectancy of payment. During the 5 immediately preceding taxable years, Bank X received $73,048,313 of payments on all of its loans. During the same 5-year period, $74,900,705 was due and payable on the loans.

.02 Analysis . (1) To determine the portion of the accrued but uncollected inter

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