Revenue Ruling 2003-111

Rev. Rul. 2003-111
Rev. Rul. 2003-111, 2003-45 I.R.B. 1009, 2003-2 C.B. 1009
                       Internal Revenue Service (I.R.S.)
                                 Revenue Ruling
                           2003 BASE PERIOD T-BILL RATE
                          Published: November 10, 2003

 Section 995.–Taxation of DISC Income to Shareholders

  2003 base period T-bill rate. The “base period T-bill rate” for the period ending September 30, 2003, is published as required by section 995(f) of the Code.

  2003 base period T-bill rate. The “base period T-bill rate” for the period ending September 30, 2003, is published as required by section 995(f) of the Code.

  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, 2003, is 1.30 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 2003 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. 2002-68, 2002-2 C.B. 808, Rev. Rul. 2001-56, 2001-2 C.B. 500, and Rev. Rul. 2000-52, 2000-2 C.B. 516.

DRAFTING INFORMATION

  The principal author of this revenue ruling is David Bergkuist of the Office of the Associate Chief Counsel (International). For further information about this revenue ruling, contact Mr. Bergkuist at (202) 622-3850 (not a toll-free call).

 2003 ANNUAL RATE, COMPOUNDED DAILY
     DAYS        1.30 PERCENT FACTOR
————————————
       1             .000035616
       2             .000071234
       3             .000106853
       4             .000142473
       5             .000178095
       6             .000213718
       7             .000249342
       8             .000284967
       9             .000320594
      10             .000356221
      11             .000391851
      12             .000427481
      13             .000463113
      14             .000498746
      15             .000534380
      16             .000570015
      17             .000605652
      18             .000641290
      19             .000676929
      20             .000712570
      21             .000748212
      22             .000783855
      23             .000819499
      24             .000855145
      25             .000890792
      26             .000926440
      27             .000962089
      28             .000997740
      29             .001033392
      30             .001069045
      31             .001104700
      32             .001140355
      33             .001176012
      34             .001211671
      35             .001247330
      36             .001282991
      37             .001318653
      38             .001354317
      39             .001389981
      40             .001425647
      41             .001461315
      42             .001496983
      43             .001532653
      44             .001568324
      45             .001603996
      46             .001639670
      47             .001675345
      48             .001711021
      49             .001746698
      50             .001782377
      51             .001818057
      52             .001853738
      53             .001889420
      54             .001925104
      55             .001960789
      56             .001996475
      57             .002032163
      58             .002067852
      59             .002103542
      60             .002139233
      61             .002174926
      62             .002210620
      63             .002246315
      64             .002282011
      65             .002317709
      66             .002353408
      67             .002389108
      68             .002424810
      69             .002460513
      70             .002496217
      71             .002531922
      72             .002567629
      73             .002603337
      74             .002639046
      75             .002674756
      76             .002710468
      77             .002746181
      78             .002781895
      79             .002817611
      80             .002853327
      81             .002889045
      82             .002924765
      83             .002960485
      84             .002996207
      85             .003031930
      86             .003067655
      87             .003103381
      88             .003139107
      89             .003174836
      90             .003210565
      91             .003246296
      92             .003282028
      93             .003317761
      94             .003353496
      95             .003389232
      96             .003424969
      97             .003460707
      98             .003496447
      99             .003532188
      100            .003567930
      101            .003603674
      102            .003639419
      103            .003675165
      104            .003710912
      105            .003746661
      106            .003782411
      107            .003818162
      108            .003853914
      109            .003889668
      110            .003925423
      111            .003961179
      112            .003996937
      113            .004032695
      114            .004068455
      115            .004104217
      116            .004139979
      117            .004175743
      118            .004211508
      119            .004247275
      120            .004283043
      121            .004318812
      122            .004354582
      123            .004390353
      124            .004426126
      125            .004461900
      126            .004497676
      127            .004533452
      128            .004569230
      129            .004605009
      130            .004640790
      131            .004676572
      132            .004712355
      133            .004748139
      134            .004783924
      135            .004819711
      136            .004855499
      137            .004891289
      138            .004927079
      139            .004962871
      140            .004998664
      141            .005034459
      142            .005070255
      143            .005106052
      144            .005141850
      145            .005177650
      146            .005213450
      147            .005249253
      148            .005285056
      149            .005320861
      150            .005356667
      151            .005392474
      152            .005428282
      153            .005464092
      154            .005499903
      155            .005535715
      156            .005571529
      157            .005607344
      158            .005643160
      159            .005678977
      160            .005714796
      161            .005750616
      162            .005786437
      163            .005822260
      164            .005858084
      165            .005893909
      166            .005929735
      167            .005965563
      168            .006001392
      169            .006037222
      170            .006073053
      171            .006108886
      172            .006144720
      173            .006180555
      174            .006216392
      175            .006252230
      176            .006288069
      177            .006323909
      178            .006359751
      179            .006395594
      180            .006431438
      181            .006467284
      182            .006503130
      183            .006538979
      184            .006574828
      185            .006610678
      186            .006646530
      187            .006682384
      188            .006718238
      189            .006754094
      190            .006789951
      191            .006825809
      192            .006861668
      193            .006897529
      194            .006933391
      195            .006969255
      196            .007005119
      197            .007040985
      198            .007076853
      199            .007112721
      200            .007148591
      201            .007184462
      202            .007220334
      203            .007256208
      204            .007292083
      205            .007327959
      206            .007363836
      207            .007399715
      208            .007435595
      209            .007471476
      210            .007507359
      211            .007543243
      212            .007579128
      213            .007615014
      214            .007650902
      215            .007686791
      216            .007722681
      217            .007758572
      218            .007794465
      219            .007830359
      220            .007866255
      221            .007902151
      222            .007938049
      223            .007973948
      224            .008009849
      225            .008045750
      226            .008081653
      227            .008117558
      228            .008153463
      229            .008189370
      230            .008225278
      231            .008261188
      232            .008297098
      233            .008333010
      234            .008368923
      235            .008404838
      236            .008440754
      237            .008476671
      238            .008512589
      239            .008548509
      240            .008584430
      241            .008620352
      242            .008656275
      243            .008692200
      244            .008728126
      245            .008764053
      246            .008799982
      247            .008835912
      248            .008871843
      249            .008907775
      250            .008943709
      251            .008979644
      252            .009015580
      253            .009051518
      254            .009087457
      255            .009123397
      256            .009159338
      257            .009195281
      258            .009231225
      259            .009267170
      260            .009303117
      261            .009339064
      262            .009375013
      263            .009410964
      264            .009446915
      265            .009482868
      266            .009518822
      267            .009554778
      268            .009590735
      269            .009626693
      270            .009662652
      271            .009698613
      272            .009734574
      273            .009770538
      274            .009806502
      275            .009842468
      276            .009878435
      277            .009914403
      278            .009950373
      279            .009986343
      280            .010022315
      281            .010058289
      282            .010094264
      283            .010130240
      284            .010166217
      285            .010202195
      286            .010238175
      287            .010274156
      288            .010310139
      289            .010346122
      290            .010382107
      291            .010418093
      292            .010454081
      293            .010490070
      294            .010526060
      295            .010562051
      296            .010598044
      297            .010634038
      298            .010670033
      299            .010706029
      300            .010742027
      301            .010778026
      302            .010814026
      303            .010850028
      304            .010886031
      305            .010922035
      306            .010958040
      307            .010994047
      308            .011030055
      309            .011066064
      310            .011102075
      311            .011138087
      312            .011174100
      313            .011210114
      314            .011246130
      315            .011282147
      316            .011318165
      317            .011354185
      318            .011390206
      319            .011426228
      320            .011462251
      321            .011498276
      322            .011534302
      323            .011570329
      324            .011606358
      325            .011642387
      326            .011678419
      327            .011714451
      328            .011750485
      329            .011786520
      330            .011822556
      331            .011858593
      332            .011894632
      333            .011930672
      334            .011966714
      335            .012002756
      336            .012038800
      337            .012074845
      338            .012110892
      339            .012146940
      340            .012182989
      341            .012219039
      342            .012255091
      343            .012291144
      344            .012327198
      345            .012363253
      346            .012399310
      347            .012435368
      348            .012471427
      349            .012507488
      350            .012543550
      351            .012579613
      352            .012615678
      353            .012651743
      354            .012687811
      355            .012723879
      356            .012759948
      357            .012796019
      358            .012832092
      359            .012868165
      360            .012904240
      361            .012940316
      362            .012976393
      363            .013012472
      364            .013048552
      365            .013084633
      366            .013120715
      367            .013156799
      368            .013192884
      369            .013228970
      370            .013265058
      371            .013301147

 Rev. Rul. 2003-111, 2003-45 I.R.B. 1009, 2003-2 C.B. 1009

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November 19th, 2003 |