SECTION 2. BACKGROUND

.01 Payment . Money Market Funds strive to maintain a stable per share net asset value of $1.00. Persons who contract to perform investment advisory or management services (“Advisors”) are concerned that a decline in per share net asset value to a threshold amount below $1.00 (commonly referred to as “breaking the buck”) will significantly harm their business reputations and could lead to litigation by shareholders. These Advisors may make a payment (“Payment”) to the Money Market Fund in order to maintain a per share net asset value of $1.00. This Payment is

not calculated with reference to the investment advisory fees paid or to be paid to the Advisor by the Money Market Fund, is not a loan to the Money Market Fund, and does not give the Advisor any ownership interest in the Money Market Fund.

.02 Excess Amount Received in a Pur- chase Transaction . Alternatively, for the same reasons described in section 2.01 of this revenue procedure, an Advisor may purchase an asset of a Money Market Fund for an amount that exceeds the asset’s fair market value (such excess hereinafter referred to as an “Excess Amount”). For example, an Advisor may purchase a debt instrument from the Money Market Fund for $100x at a time when the fair market value of the debt instrument is $90x. When property is purchased for an amount above fair market value for a purpose other than the acquisition of the property, the Excess Amount ( e.g., $10x in the example in the preceding sentence) is generally not accounted for as part of the purchase/sale transaction for tax purposes. Thus, in the example, the Advisor is treated as having a cost basis in the purchased debt instrument of $90x. The Excess Amount should be treated in the same manner as a Payment described in section 2.01 of this revenue procedure.