Part I. Rulings and Decisions Under the Internal Revenue Code of 1986

Section 995.—Taxation of DISC Income to Shareholders

2010 base period T-bill rate. The “base period T-bill rate” for the period ending September 30, 2010, is published as required by section 995(f) of the Code.

Rev. Rul. 2010–28

Section 995(f)(1) of the Internal Revenue Code provides that a shareholder of a DISC shall pay interest each taxable year in an amount equal to the product of the shareholder’s DISC-related deferred tax liability for the year and the “base period T-bill rate.” Under section 995(f)(4), the base period T-bill rate is the annual rate of interest determined by the Secretary to be equivalent to the average of the 1-year constant maturity Treasury yields, as published by the Board of Governors of the Federal Reserve System, for the 1-year period ending on September 30 of the calendar year ending with (or of the most recent calendar year ending before) the close of the taxable year of the shareholder. The base period T-bill rate for the period ending September 30, 2010, is 0.34 percent.

Pursuant to section 6222 of the Code, interest must be compounded daily. The table below provides factors for compounding the base period T-bill rate daily for any number of days in the shareholder’s taxable year (including a 52–53 week accounting period) for the 2010 base period T-bill rate. To compute the amount of the interest charge for the shareholder’s taxable year, multiply the amount of the shareholder’s DISC-related deferred tax liability (as defined in section 995(f)(2)) for that year by the base period T-bill rate factor corresponding to the number of days in the shareholder’s taxable year for which the interest charge is being computed. Generally, one would use the factor for 365 days. One would use a different factor only if the shareholder’s taxable year for which the interest charge being determined is a short taxable year, if the shareholder uses the 52–53 week taxable year, or if the shareholder’s taxable year is a leap year.

For the base period T-bill rates for the periods ending in prior years, see Rev. Rul. 2009–36, 2009–47 I.R.B. 650; Rev. Rul. 2008–51, 2008–2 C.B. 1171; Rev. Rul. 2007–64, 2007–2 C.B. 953; Rev. Rul. 2006–54, 2006–2 C.B. 834; Rev. Rul. 2005–70, 2005–2 C.B. 919; Rev. Rul. 2004–99, 2004–2 C.B. 720; Rev. Rul. 2003–2, 2003–1 C.B. 251; and Rev. Rul. 2002–68, 2002–2 C.B. 808.

DRAFTING INFORMATION

The principal author of this revenue ruling is Teresa Burridge Hughes of the Office of Associate Chief Counsel (International). For further information regarding this revenue ruling, contact Ms. Hughes at (202) 622–3850 (not a toll-free call).

2010 ANNUAL RATE, COMPOUNDED DAILY

0.34 PERCENT

DAYS FACTOR

1 .000009315 2 .000018630 3 .000027945 4 .000037261 5 .000046576

6 .000055892 7 .000065207 8 .000074523 9 .000083839 10 .000093155

11 .000102471 12 .000111787 13 .000121103 14 .000130419 15 .000139735

16 .000149052 17 .000158368 18 .000167685 19 .000177001 20 .000186318

21 .000195635 22 .000204952 23 .000214269 24 .000223586 25 .000232903

2010 ANNUAL RATE, COMPOUNDED DAILY

0.34 PERCENT

DAYS FACTOR

26 .000242220 27 .000251537 28 .000260855 29 .000270172 30 .000279490

31 .000288807 32 .000298125 33 .000307443 34 .000316761 35 .000326079

36 .000335397 37 .000344715 38 .000354034 39 .000363352 40 .000372670

41 .000381989 42 .000391308 43 .000400626 44 .000409945 45 .000419264

46 .000428583 47 .000437902 48 .000447221 49 .000456540 50 .000465860

51 .000475179 52 .000484499 53 .000493818 54 .000503138 55 .000512458

56 .000521777 57 .000531097 58 .000540417 59 .000549738 60 .000559058

61 .000568378 62 .000577698 63 .000587019 64 .000596339 65 .000605660

2010–49 I.R.B. 804 December 6, 2010

2010 ANNUAL RATE, COMPOUNDED DAILY

0.34 PERCENT

DAYS FACTOR

66 .000614981 67 .000624301 68 .000633622 69 .000642943 70 .000652264

71 .000661586 72 .000670907 73 .000680228 74 .000689549 75 .000698871

76 .000708193 77 .000717514 78 .000726836 79 .000736158 80 .000745480

81 .000754802 82 .000764124 83 .000773446 84 .000782768 85 .000792091

86 .000801413 87 .000810736 88 .000820058 89 .000829381 90 .000838704

91 .000848027 92 .000857350 93 .000866673 94 .000875996 95 .000885319

96 .000894642 97 .000903966 98 .000913289 99 .000922613 100 .000931936

101 .000941260 102 .000950584 103 .000959908 104 .000969232 105 .000978556

2010 ANNUAL RATE, COMPOUNDED DAILY

0.34 PERCENT

DAYS FACTOR

106 .000987880 107 .000997205 108 .001006529 109 .001015853 110 .001025178

111 .001034503 112 .001043827 113 .001053152 114 .001062477 115 .001071802

116 .001081127 117 .001090452 118 .001099777 119 .001109103 120 .001118428

121 .001127753 122 .001137079 123 .001146405 124 .001155730 125 .001165056

126 .001174382 127 .001183708 128 .001193034 129 .001202360 130 .001211687

131 .001221013 132 .001230340 133 .001239666 134 .001248993 135 .001258319

136 .001267646 137 .001276973 138 .001286300 139 .001295627 140 .001304954

141 .001314281 142 .001323609 143 .001332936 144 .001342264 145 .001351591

2010 ANNUAL RATE, COMPOUNDED DAILY

0.34 PERCENT

DAYS FACTOR

146 .001360919 147 .001370247 148 .001379574 149 .001388902 150 .001398230

151 .001407558 152 .001416887 153 .001426215 154 .001435543 155 .001444872

156 .001454200 157 .001463529 158 .001472858 159 .001482186 160 .001491515

161 .001500844 162 .001510173 163 .001519502 164 .001528832 165 .001538161

166 .001547490 167 .001556820 168 .001566149 169 .001575479 170 .001584809

171 .001594139 172 .001603469 173 .001612799 174 .001622129 175 .001631459

176 .001640789 177 .001650119 178 .001659450 179 .001668780 180 .001678111

181 .001687442 182 .001696772 183 .001706103 184 .001715434 185 .001724765

December 6, 2010 805 2010–49 I.R.B.

2010 ANNUAL RATE, COMPOUNDED DAILY

0.34 PERCENT

DAYS FACTOR

266 .002480869 267 .002490207 268 .002499545 269 .002508884 270 .002518222

271 .002527561 272 .002536899 273 .002546238 274 .002555577 275 .002564916

276 .002574255 277 .002583594 278 .002592933 279 .002602272 280 .002611611

281 .002620951 282 .002630290 283 .002639630 284 .002648969 285 .002658309

286 .002667649 287 .002676989 288 .002686329 289 .002695669 290 .002705009

291 .002714350 292 .002723690 293 .002733030 294 .002742371 295 .002751711

296 .002761052 297 .002770393 298 .002779734 299 .002789075 300 .002798416

301 .002807757 302 .002817098 303 .002826439 304 .002835781 305 .002845122

2010 ANNUAL RATE, COMPOUNDED DAILY

0.34 PERCENT

DAYS FACTOR

186 .001734096 187 .001743428 188 .001752759 189 .001762090 190 .001771422

191 .001780753 192 .001790085 193 .001799417 194 .001808749 195 .001818081

196 .001827413 197 .001836745 198 .001846077 199 .001855409 200 .001864741

201 .001874074 202 .001883406 203 .001892739 204 .001902072 205 .001911405

206 .001920737 207 .001930070 208 .001939403 209 .001948737 210 .001958070

211 .001967403 212 .001976736 213 .001986070 214 .001995404 215 .002004737

216 .002014071 217 .002023405 218 .002032739 219 .002042073 220 .002051407

221 .002060741 222 .002070075 223 .002079410 224 .002088744 225 .002098079

2010 ANNUAL RATE, COMPOUNDED DAILY

0.34 PERCENT

DAYS FACTOR

226 .002107413 227 .002116748 228 .002126083 229 .002135418 230 .002144752

231 .002154088 232 .002163423 233 .002172758 234 .002182093 235 .002191429

236 .002200764 237 .002210100 238 .002219435 239 .002228771 240 .002238107

241 .002247443 242 .002256779 243 .002266115 244 .002275451 245 .002284787

246 .002294124 247 .002303460 248 .002312797 249 .002322133 250 .002331470

251 .002340807 252 .002350144 253 .002359481 254 .002368818 255 .002378155

256 .002387492 257 .002396829 258 .002406167 259 .002415504 260 .002424842

261 .002434179 262 .002443517 263 .002452855 264 .002462193 265 .002471531

2010–49 I.R.B. 806 December 6, 2010

2010 ANNUAL RATE, COMPOUNDED DAILY

0.34 PERCENT

DAYS FACTOR

346 .003228198 347 .003237543 348 .003246888 349 .003256234 350 .003265579

351 .003274925 352 .003284270 353 .003293616 354 .003302962 355 .003312308

356 .003321653 357 .003330999 358 .003340346 359 .003349692 360 .003359038

361 .003368384 362 .003377731 363 .003387077 364 .003396424 365 .003405771

366 .003415117 367 .003424464 368 .003433811 369 .003443158 370 .003452506

371 .003461853

2010 ANNUAL RATE, COMPOUNDED DAILY

0.34 PERCENT

DAYS FACTOR

306 .002854464 307 .002863806 308 .002873147 309 .002882489 310 .002891831

311 .002901173 312 .002910515 313 .002919857 314 .002929200 315 .002938542

316 .002947884 317 .002957227 318 .002966570 319 .002975912 320 .002985255

321 .002994598 322 .003003941 323 .003013284 324 .003022627 325 .003031970

2010 ANNUAL RATE, COMPOUNDED DAILY

0.34 PERCENT

DAYS FACTOR

326 .003041314 327 .003050657 328 .003060001 329 .003069344 330 .003078688

331 .003088031 332 .003097375 333 .003106719 334 .003116063 335 .003125407

336 .003134752 337 .003144096 338 .003153440 339 .003162785 340 .003172129

341 .003181474 342 .003190818 343 .003200163 344 .003209508 345 .003218853

December 6, 2010 807 2010–49 I.R.B.