Internal Revenue Bulletin 2001-53 (PDF rendition): IRS Revenue Rulings

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HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
INCOME TAX
Executive Order 13239, page 632.
Afghanistan designated as combat zone.By this executive
order, Afghanistan (and its airspace) is designated as a combat
zone beginning September 19, 2001.
Rev. Rul. 2001–64, page 640.
CPI adjustment for below-market loans for 2002.The
amount that section 7872(g) of the Code permits a taxpayer to
lend to a qualified continuing care facility without incurring
imputed interest is published and adjusted for inflation for
years 1987–2002. Rev. Rul. 2000–56 supplemented and
superseded.
Rev. Rul. 2001–65, page 639.
Section 1274A, inflation-adjusted numbers for 2002.
This ruling provides the dollar amounts, increased by the 2002
inflation adjustment, for section 1274A of the Code. Rev. Rul.
2000–55 supplemented and superseded.
Rev. Rul. 2001–66, page 637.
LIFO; price indexes; department stores.The October
2001 Bureau of Labor Statistics price indexes are accepted for
use by department stores employing the retail inventory and
last-in, first-out inventory methods for valuing inventories for
tax years ended on, or with reference to, October 31, 2001.
Rev. Proc. 2001–60, page 643.
Insurance companies; loss reserves; discounting unpaid
losses.The loss payment patterns and discount factors are
set forth for the 2001 accident year. These factors will be used
for computing discounted unpaid losses under section 846 of
the Code.
Rev. Proc. 2001–61, page 653.
Insurance companies; discounted estimated salvage
recoverable.The salvage discount factors are set forth for
the 2001 accident year. These factors will be used for comput-
ing estimated salvage recoverable under section 832 of the
Code.
EMPLOYEE PLANS
Rev. Rul. 2001–62, page 632.
Mortality tables.This ruling describes changes to the mortal-
ity tables under section 417(e) of the Code for employee plans
purposes. Rev. Rul. 95–6 superseded for certain distributions
and Rev. Rul. 98–1 modified.
Notice 2001–84, page 642.
Retirement plans; year 2002 section 415(d) limitations.
This notice sets forth certain limitations reset and established
by EGTRRA as well as cost-of-living adjustments effective Janu-
ary 1, 2002, applicable to the dollar limits on benefits under
qualified defined benefit pension plans and to other provisions
affecting (1) certain plans of deferred compensation, and (2)
“control employees.”
Actions Relating to Court Decisions is on the page following the Introduction.
Finding Lists begin on page ii.
Bulletin No. 2001–53
December 31, 2001

The IRS Mission
Provide America’s taxpayers top quality service by helping
them understand and meet their tax responsibilities and by
applying the tax law with integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly and may be obtained from the
Superintendent of Documents on a subscription basis. Bulletin
contents are consolidated semiannually into Cumulative Bulle-
tins, which are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application of
the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the Bul-
letin. All published rulings apply retroactively unless otherwise
indicated. Procedures relating solely to matters of internal
management are not published; however, statements of inter-
nal practices and procedures that affect the rights and duties
of taxpayers are published.
Revenue rulings represent the conclusions of the Service on
the application of the law to the pivotal facts stated in the rev-
enue ruling. In those based on positions taken in rulings to tax-
payers or technical advice to Service field offices, identifying
details and information of a confidential nature are deleted to
prevent unwarranted invasions of privacy and to comply with
statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions of
the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A, Tax
Conventions and Other Related Items, and Subpart B, Legisla-
tion and Related Committee Reports.
Part III.—Administrative, Procedural, and
Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Secre-
tary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The first Bulletin for each month includes a cumulative index for
the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the first Bulletin of the succeeding semiannual
period, respectively.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402.
December 31, 20012001–53 I.R.B.

Actions Relating to Decisions of the Tax Court
It is the policy of the Internal Revenue
Service to announce at an early date
whether it will follow the holdings in cer-
tain cases. An Action on Decision is the
document making such an announcement.
An Action on Decision will be issued at
the discretion of the Service only on
unappealed issues decided adverse to the
government. Generally, an Action on
Decision is issued where its guidance
would be helpful to Service personnel
working with the same or similar issues.
Unlike a Treasury Regulation or a Rev-
enue Ruling, an Action on Decision is not
an affirmative statement of Service posi-
tion. It is not intended to serve as public
guidance and may not be cited as prece-
dent.
Actions on Decisions shall be relied
upon within the Service only as conclu-
sions applying the law to the facts in the
particular case at the time the Action on
Decision was issued. Caution should be
exercised in extending the recommenda-
tion of the Action on Decision to similar
cases where the facts are different. More-
over, the recommendation in the Action
on Decision may be superseded by new
legislation, regulations, rulings, cases, or
Actions on Decisions.
Prior to 1991, the Service published
acquiescence or nonacquiescence only in
certain regular Tax Court opinions. The
Service has expanded its acquiescence
program to include other civil tax cases
where guidance is determined to be help-
ful. Accordingly, the Service now may
acquiesce or nonacquiesce in the holdings
of memorandum Tax Court opinions, as
well as those of the United States District
Courts, Claims Court, and Circuit Courts
of Appeal. Regardless of the court decid-
ing the case, the recommendation of any
Action on Decision will be published in
the Internal Revenue Bulletin.
The recommendation in every Action
on Decision will be summarized as acqui-
escence, acquiescence in result only, or
nonacquiescence. Both “acquiescence”
and “acquiescence in result only” mean
that the Service accepts the holding of the
court in a case and that the Service will
follow it in disposing of cases with the
same controlling facts. However, “ac-
quiescence” indicates neither approval
nor disapproval of the reasons assigned
by the court for its conclusions; whereas,
“acquiescence in result only” indicates
disagreement or concern with some or all
of those reasons. “Nonacquiescence” sig-
nifies that, although no further review
was sought, the Service does not agree
with the holding of the court and, gener-
ally, will not follow the decision in dis-
posing of cases involving other taxpay-
ers. In reference to an opinion of a circuit
court of appeals, a “nonacquiescence”
indicates that the Service will not follow
the holding on a nationwide basis. How-
ever, the Service will recognize the prece-
dential impact of the opinion on cases
arising within the venue of the deciding
circuit.
The Actions on Decisions published in
the weekly Internal Revenue Bulletin are
consolidated semiannually and appear in
the first Bulletin for July and the Cumu-
lative Bulletin for the first half of the
year. A semiannual consolidation also
appears in the first Bulletin for the fol-
lowing January and in the Cumulative
Bulletin for the last half of the year.
The Commissioner does NOT ACQUI-
ESCE in the following decision:
North Dakota State University v.
United States
1
84 F. Supp. 2d 1043 (D.N.D. 1999),
aff ’d.255 F.3d 599 (8th Cir. 2001)
1
Nonacquiescence relating to whether early retirement payments that the taxpayer made to tenured faculty members are wages subject to Federal Insurance
Contributions Act (“FICA”) taxes.
2001–53 I.R.B.December 31, 2001

December 31, 20012001–53 I.R.B.

Part I. Rulings and Decisions Under the Internal Revenue Code of 1986
Section 112.—Certain
Combat Zone Compensation
of Members of the Armed
Forces
Executive Order 13239
Designation of Afghanistan
and the Airspace Above as a
Combat Zone
Pursuant to the authority vested in me
as President by the Constitution and the
laws of the United States of America,
including section 112 of the Internal Rev-
enue Code of 1986 (26 U.S.C. 112), I
designate, for purposes of that section,
Afghanistan, including the airspace
above, as an area in which Armed Forces
of the United States are and have been
engaged in combat.
For purposes of this order, I designate
September 19, 2001, as the date of the
commencement of combatant activities in
such zone.
George W. Bush
The White House,
December 12, 2001.
(Filed by the Office of the Federal Register on
December 13, 2001, 11:38 a.m., and published in
the issue of the Federal Register for December 14,
2001, 66 F.R. 64905)
Section 415.—Limitations on
Benefits and Contributions
Under Qualified Plans
Whether the limitations on benefits and contri-
butions described in§415 of the Code are exceeded
as a result of the application of new mortality tables.
See Rev. Rul. 2001–62, on this page.
Section 417.—Definitions and
Special Rules for Purposes of
Minimum Survivor Annuity
Requirements
26 CFR 1.417(e)–1: Restrictions and valuations of
distributions from plans subject to sections
401(a)(11) and 417.
(Also,§415.)
Mortality tables.This ruling
describes changes to the mortality tables
under section 417(e) of the Internal Rev-
enue Code for employee plans purposes.
Rev. Rul. 2001–62
ISSUE
What mortality table is the prescribed
table under§415(b)(2)(E)(v) ofthe
Internal RevenueCode (the“Code”)
and theapplicable mortalitytable
under§417(e)(3)(A)(ii)(I)?
LAW AND ANALYSIS
Section 415(b) provides for limitations
on benefits payable under qualified
defined benefit plans. Section 415(b)(1)
provides, for limitation years ending on
or before December 31, 2001, that the
limitation on benefits, when expressed as
an annual benefit (i.e., a benefit payable
annually in the form of a straight life
annuity with no ancillary benefits) is the
lesser of (a) $90,000 (as adjusted for
increases in the cost of living) or (b) 100
percent of the participant’s average com-
pensation for the high 3 years. Section
415(b)(2)(B) provides that, if the benefit
under the plan is payable in any form
other than a straight life annuity, the
determination of whether the limitation of
§415(b)(1) has been satisfied is made by
adjusting such benefit so that it is equiva-
lent to a straight life annuity. Sections
415(b)(2)(C) and (D) provide, for limita-
tion years ending on or before December
31, 2001, for adjustments to the $90,000
(as adjusted for increases in the cost of
living) limit when benefits begin at an
age other than at social security retire-
ment age.
For limitation years ending after
December 31, 2001, section 611(a) of the
Economic Growth and Tax Relief Recon-
ciliation Act of 2001, Public Law 107–16
(EGTRRA), made a number of changes
to the limitations under§415 of the
Code. For limitation years ending after
December 31, 2001, the adjustments
under§415(b)(2)(C) apply to benefits
that commence before age 62 and the
adjustments under§415(b)(2)(D) apply
to benefits that begin after age 65.
Section 415(b)(2)(E)(v) provides that,
for purposes of adjusting any benefit or
limitation under§415(b)(2)(B), (C), or
(D), the mortality table used is the table
prescribed by the Secretary. The statute
further provides that the table is based on
the prevailing commissioners’standard
table (described in§807(d)(5)(A)) used
to determine reserves for group annuity
contracts issued on the date the adjust-
ment is being made (without regard to
any other subparagraph of§807(d)(5)).
Section 417(e)(3) provides rules for
the determination of the present value of
plan benefits for purposes of§417(e).
Section 417(e)(3)(A)(i) generally pro-
vides that, for purposes of§417(e)(1)
and (e)(2), the present value is not less
than the present value calculated by
using the applicable mortality table and
the applicable interest rate. In addition,
§411(a)(11)(B) provides that, the deter-
mination of present value for purposes of
§411(a)(11)(A) is calculated in accor-
dance with§417(e)(3). Sections
203(e)(1), 203(e)(2), and 205(g)(3) of the
Employee Retirement Income Security
Act of 1974 (ERISA) provide corre-
sponding provisions to§§411(a)(11)(A),
411(a)(11)(B), and 417(e)(3) of the Code.
Section 417(e)(3)(A)(ii)(I) defines the
term“applicable mortality table”as the
mortality table prescribed by the Secre-
tary. The statute further provides that
the table is based on the prevailing
commissioners’standard table (described
in§807(d)(5)(A)) used to determine
reserves for group annuity contracts
issued on the date the adjustment is being
made (without regard to any other sub-
paragraph of§807(d)(5)).
Section 1.417(e)–1(d)(1) of the
Income Tax Regulations provides that a
defined benefit plan must provide that the
present value of any accrued benefit and
the amount (subject to§§411(c)(3) and
415) of any distribution, including a
single sum, must not be less than the
amount calculated using the applicable
interest rate described in§1.417(e)–
1(d)(3) (determined for the month
described in§1.417(e)–1(d)(4)) and the
applicable mortality table described in
§1.417(e)–1(d)(2). The present value of
any optional form of benefit cannot be
less than the present value of the normal
2001–53 I.R.B632December 31, 2001

retirement benefit determined in accor-
dance with the preceding sentence. Under
§1.417(e)–1(d)(1), these rules must also
be used to compute the present value of
the benefit for purposes of determining
whether consent for a distribution is
required.
Section 1.417(e)–1(d)(2) provides that
the applicable mortality table is the mor-
tality table based on the prevailing com-
missioners’standard table (described in
§807(d)(5)(A)) used to determine
reserves for group annuity contracts
issued on the date as of which
present value is being determined (with-
out regard to any other subparagraph of
§807(d)(5)), that is prescribed by the
Commissioner in revenue rulings, notices,
or other guidance published in the Inter-
nal Revenue Bulletin. The Commissioner
may also prescribe rules that apply in the
case of a change to the prevailing com-
missioners’standard table.
For purposes of§807(d)(5) of the
Code, Rev. Rul. 92–19 (1992–1 C.B. 227)
sets forth the prevailing commissioners’
standard table for group annuities as the
1983 Group Annuity Mortality Table (83
GAM) for contracts issued after January
1, 1985.
The U.S. Supreme Court, inArizona v.
Norris, 463 U.S. 1073, 1084–1086
(1983), held that the application of sex-
distinct actuarial tables to employees
based upon their gender in calculating the
amount of retirement benefits violates
Title VII of the Civil Rights Act of 1964.
Rev. Rul. 95–6 (1995–1 C.B. 80) pro-
vided a mortality table, based upon a
fixed blend of 50 percent of the male
mortality rates and 50 percent of the
female mortality rates from the 83 GAM,
as the applicable mortality table for pur-
poses of adjusting benefits or limitations
under§415(b)(2) of the Code and deter-
mining the present value of plan benefits
under§417(e)(3). Rev. Rul. 98–1
(1998–1 C.B. 249) Q & A–6, provides
that Rev. Rul. 95–6, provides the mortal-
ity table which generally must be used for
the purposes of adjusting any benefit or
limitation under§415(b)(2)(B), (C), or
(D).
For purposes of§807(d)(5) of the
Code, Rev. Rul. 2001–38 (2001–33 I.R.B
124) supplements Rev. Rul. 92–19 by set-
ting forth, for certain insurance products
issued on or after January 1, 1999, the
prevailing commissioners’standard table
for group annuities as the 1994 Group
Annuity Reserving Table (94 GAR).
Section 411(d)(6) of the Code gener-
ally prohibits a plan amendment that
decreases a participant’s accrued benefit.
Section 411(d)(6)(B) provides that an
amendment that eliminates an optional
form of benefit is treated as reducing a
participant’s accrued benefit, but permits
the Secretary of Treasury to provide for
the elimination of certain optional forms
of benefits under regulations. Section
1.411(d)–4,Q&A–2(b) provides that the
Commissioner may, through the publica-
tion of revenue rulings, notices, and
other items of general applicability, pro-
vide for the elimination or reduction of
certain§411(d)(6) protected benefits that
have already accrued.
Section 401(b) and the regulations
thereunder provide a remedial amend-
ment period during which an amendment
to a disqualifying provision may be made
retroactively effective, under certain cir-
cumstances, to comply with the require-
ments of§401(a). In Notice 2001–42
(2001–30 I.R.B. 70) the Service provided
that the remedial amendment period for
changes in the plan qualification require-
ments made by EGTRRA would end no
earlier than the end of the first plan year
beginning on or after January 1, 2005.
This“EGTRRA remedial amendment
period”is available only if good faith
EGTRRA plan amendments have been
adopted by, generally, the end of the first
plan year beginning on or after January 1,
2002.
HOLDING
The following mortality table, based
upon a fixed blend of 50 percent of the
unloaded male mortality rates and 50 per-
cent of the unloaded female mortality
rates underlying the mortality rates in the
94 GAR, projected to 2002, is the appli-
cable mortality table for purposes of
adjusting benefits or limitations under
§415(b)(2) of the Code and for determin-
ing the present value of plan benefits
under§417(e)(3) and the corresponding
provisions of ERISA. The table shows,
for each age, the number living based
upon a starting population of one million
lives at age 1 (l
x
), and the annual rate of
mortality (q
x
).
Plans may incorporate this table by
reference to this revenueruling. A
plan amendment will not violate section
411(d)(6)(B) of the Code and the corre-
sponding provision of ERISA solely
because of a reduction in any annuity dis-
tribution with an annuity starting date on
or after the later of the adoption date or
the effective date of this amendment if
the cause of such reduction is the substi-
tution of the table in this revenue rul-
ing for the table in Rev. Rul. 95–6. If
the effective date is earlier than the
adoption date of this plan amendment,
§415(b)(2)(B) of the Code will not be
violated if such amendment provides that
any payments made after the adoption
date will be reduced actuarially by the
value of the excess, if any, of annuity dis-
tributions paid before the adoption date of
this amendment over annuity distributions
that would have been permissible under
section§415(b)(2)(B) if the amendment
had been adopted as of such effective
date.
December 31, 20016332001–53 I.R.B.

Mortality Table
for Sections 415 and 417(e)
Agel
x
q
x
11000000.000.000514
2999486.000.000341
3999145.180.000270
4998875.410.000207
5998668.640.000188
6998480.890.000179
7998302.160.000170
8998132.450.000154
9997978.740.000148
10997831.040.000150
11997681.370.000158
12997523.740.000171
13997353.160.000192
14997161.670.000225
15996937.310.000262
16996676.110.000296
17996381.090.000324
18996058.260.000343
19995716.610.000357
20995361.140.000368
21994994.850.000381
22994615.760.000396
23994221.890.000418
24993806.310.000441
25993368.040.000468
26992903.140.000500
27992406.690.000523
28991887.660.000543
29991349.070.000564
30990789.950.000588
Mortality Table
for Sections 415 and 417(e)
Agel
x
q
x
31990207.370.000612
32989601.360.000633
33988974.940.000649
34988333.100.000661
35987679.810.000675
36987013.130.000695
37986327.160.000727
38985610.100.000768
39984853.150.000819
40984046.560.000879
41983181.580.000944
42982253.460.001014
43981257.450.001083
44980194.750.001151
45979066.550.001224
46977868.170.001312
47976585.210.001422
48975196.510.001554
49973681.050.001699
50972026.770.001869
51970210.050.002065
52968206.570.002302
53965977.760.002571
54963494.230.002854
55960744.420.003197
56957672.920.003614
57954211.890.004124
58950276.720.004712
59945799.020.005345
60940743.720.006062
2001–53 I.R.B634December 31, 2001

Mortality Table
for Sections 415 and 417(e)
Agel
x
q
x
61935040.930.006912
62928577.930.007846
63921292.310.008958
64913039.370.010151
65903771.110.011441
66893431.060.012870
67881932.600.014291
68869328.900.015614
69855755.200.017000
70841207.360.018396
71825732.510.020025
72809197.220.022026
73791373.840.024187
74772232.880.026581
75751706.160.029310
76729673.650.032392
77706038.060.036288
78680417.350.040636
79652767.910.045463
80623091.120.050795
81591441.210.056655
82557933.110.063064
83522747.620.069481
84486426.590.076539
85449195.990.084129
86411405.580.092686
87373274.040.103014
88334821.590.114434
89296506.620.126925
90258872.520.140650
Mortality Table
for Sections 415 and 417(e)
Agel
x
q
x
91222462.100.154664
92188055.220.170190
93156050.100.186631
94126926.310.203518
95101094.520.222123
9678639.100.240233
9759747.390.259380
9844250.110.278936
9931907.160.297614
10022411.140.316630
10115315.100.338758
10210126.990.358830
1036493.120.380735
1044020.960.404426
1052394.780.427883
1061370.090.449085
107754.800.466012
108403.050.478582
109210.160.488140
110107.570.494813
11154.340.498724
11227.240.500000
11313.620.500000
1146.810.500000
1153.410.500000
1161.710.500000
1170.860.500000
1180.430.500000
1190.220.500000
1200.111.000000
EFFECTIVE DATE
The required use of the mortality table
in this revenue ruling is effective for dis-
tributions with annuity starting dates on
or after December 31, 2002, except that a
plan may specify any earlier date during
calendar year 2002 as the effective date
for the required use of the mortality table
in this revenue ruling under the plan. The
effective date for the required use of the
mortality table set forth in this revenue
ruling for a plan is referred to as the
plan’s 94 GAR effective date. A plan’s94
GAR effective date must apply uniformly
for purposes of§§415 and 417(e) of the
Code and§205(g)(3) of ERISA.
PLAN AMENDMENT
The latest date by which a plan may be
amended to comply with this revenue rul-
ing is the last day of the plan year that
contains the plan’s 94 GAR effective
date. Thus, a plan with a July 1 to June 30
fiscal plan year ending June 30, 2002,
must be amended no later than June 30,
2002, if the effective date is between
January 1, 2002, and June 30, 2002. If
such a plan is amended during its July 1,
2002, to June 30, 2003, plan year, the
plan’s 94 GAR effective date may be no
earlier than July 1, 2002.
For a plan amendment adopted to
comply with this revenue ruling no later
than the last day of the plan year that
contains the plan’s 94 GAR effective
date, the remedial amendment period
under§401(b) will end at the end of the
EGTRRA remedial amendment period.
December 31, 20016352001–53 I.R.B.

DETERMINATION LETTERS
Determination letter applications filed
on or after the last day of the plan year
that contains the plan’s 94 GAR effective
date will be reviewed with respect to
whether the form of the plan satisfies the
requirements of this revenue ruling.
Determination letter applications filed
before the last day of the plan year that
contains the plan’s 94 GAR effective date
will be reviewed with respect to whether
the form of the plan satisfies the require-
ments of this revenue ruling if an amend-
ment to comply with the ruling is submit-
ted with the request for the determination
letter. In either case, determination letters
issued with respect to such applications
may be relied on with respect to the
requirements of this revenue ruling.
MODEL PLAN AMENDMENTS
The Appendix provides two alternative
model plan amendments that a plan spon-
sor, or a sponsor of a pre-approved plan,
may adopt to comply with this revenue
ruling. The first model amendment is
intended to have the effect of adopt-
ingthemortality table set forth in
this revenue ruling for purposes of
adjusting anybenefit orlimitation
under§415(b)(2)(B), (C), or (D)and
the applicable mortality table used for
purposes of satisfying the requirements of
§417(e). The second model amendment
is intended to have the effect of substitut-
ing the mortality table set forth in this
revenue ruling for the mortality table set
forth in Rev. Rul. 95–6 for all purposes
under the plan for which the use of the
mortality table set forth in Rev. Rul. 95–6
is specified. A plan sponsor should con-
sider which of these two approaches is
appropriate for the particular plan, or
whether some other approach should be
chosen for the plan.
A pre-approved plan (that is, a master
or prototype or volume submitter plan)
may be amended by the document’s spon-
sor to comply with this revenue ruling to
the extent authorized. Alternatively,
adopting employers may adopt a plan
amendment as an addendum to the plan
or adoption agreement. The inclusion of
either of the model plan amendments
below in an addendum to a plan adopted
to comply with EGTRRA will not cause a
pre-approved plan to be treated as an
individually designed plan.
A plan sponsor that adopts either of
the model amendments verbatim (or with
only minor changes) will have reliance
that the form of its plan satisfies the
requirements of this revenue ruling, and
the adoption of such an amendment will
not adversely affect the plan sponsor’s
reliance on a favorable determination,
opinion, or advisory letter.
EFFECT ON OTHER DOCUMENTS
Rev. Rul. 95–6 is superseded for distri-
butions with annuity starting dates on or
after the earlier of December 31, 2002, or
the date specified in the plan for which
the use of the mortality table set forth in
this revenue ruling is specified (which
may be no earlier than January 1, 2002).
Rev. Rul. 98–1 is modified.
COMMENTS REQUESTED
The 94 GAR is designed as a genera-
tional table that incorporates mortality
improvements on an annual basis. The
table in this revenue ruling is based on
the 94 GAR projected, using Scale AA, to
2002. Comments are requested in regard
to how often the mortality table for
§§415 and 417(e) of the Code should be
updated. Comments should be sent to
Commissioner of Internal Revenue Ser-
vice, Attention T:EP:RA:T:A1, Washing-
ton, D.C. 20224.
DRAFTING INFORMATION
The principal author of this revenue
ruling is Lawrence Isaacs of Employee
Plans, Tax Exempt and Government Enti-
ties Division. For further information
regarding this revenue ruling, please con-
tact the Employee Plans’taxpayer assis-
tance telephone service at 1–877–829–
5500 between the hours of 8:00 a.m. and
6:30 p.m. Eastern time, Monday through
Friday (a toll-free number). Mr. Isaacs
may be reached at 1–202–283–9710 (not
a toll-free number).
Appendix — MODEL AMENDMENTS
The following are amendments that sponsors of qualified defined benefit plans may adopt to comply with§§415 and 417(e),
as required under Rev. Rul. 2001–62.
MODEL PLAN AMENDMENT 1
1.Effective date. This section shall apply to distributions with annuity starting dates on or after
.
2.Notwithstanding any other plan provisions to the contrary, the applicable mortality table used for purposes of adjusting
any benefit or limitation under§415(b)(2)(B), (C), or (D) of the Internal Revenue Code as set forth in section
of the plan and the applicable mortality table used for purposes of satisfying the requirements of§417(e) of the Inter-
nal Revenue Code as set forth in section
of the plan is the table prescribed in Rev. Rul. 2001–62.
3.For any distribution with an annuity starting date on or after the effective date of this section and before the adoption
date of this section, if application of the amendment as of the annuity starting date would have caused a reduction in
the amount of any distribution, such reduction is not reflected in any payment made before the adoption date of this
section. However, the amount of any such reduction that is required under§415(b)(2)(B) must be reflected actuarially
over any remaining payments to the participant.
2001–53 I.R.B636December 31, 2001

Note:This amendment should be used for plans that reference the applicable mortality table only for the purposes of adjust-
ing any benefit or limitation under§415(b)(2)(B), (C), or (D) of the Internal Revenue Code and satisfying the require-
ments of§417(e) of the Internal Revenue Code. Paragraph 3 of this amendment should be used only if the effective
date of the amendment is earlier than the adoption date of the amendment.
MODEL PLAN AMENDMENT 2
1.Effective date. This section shall apply to distributions with annuity starting dates on or after
.
2.Notwithstanding any other plan provisions to the contrary, any reference in the plan to the mortality table prescribed
in Rev. Rul. 95–6 shall be construed as a reference to the mortality table prescribed in Rev. Rul. 2001- 62 for all pur-
poses under the plan.
3.For any distribution with an annuity starting date on or after the effective date of this section and before the adoption
date of this section, if application of the amendment as of the annuity starting date would have caused a reduction in
the amount of any distribution, such reduction is not reflected in any payment made before the adoption date of this
section. However, the amount of any such reduction that is required under§415(b)(2)(B) must be reflected actuarially
over any remaining payments to the participant.
Note:This amendment should be used for plans that specifically reference the mortality table provided in Rev. Rul. 95–6 and
apply that table for other purposes as well as for purposes of adjusting any benefit or limitation under§415(b)(2)(B),
(C), or (D) and satisfying the requirements of§417(e), where the plan sponsor wishes to replace the mortality table
provided in Rev. Rul. 95–6 with the mortality table provided in Rev. Rul. 2001–62 for all purposes. If the plan refer-
ences the mortality table prescribed in Rev. Rul. 95–6 using some other label (such as, for example, the GAM 83
blended mortality table), the plan’s term should be used in place of the reference to the mortality table prescribed in
Rev. Rul. 95–6. Paragraph 3 of this amendment should be used only if the effective date of the amendment is earlier
than the adoption date of the amendment.
Section 472.—Last-in, First-
out Inventories
26 CFR 1.472–1: Last-in, first-out inventories.
LIFO; price indexes; department
stores.The October 2001 Bureau of
Labor Statistics price indexes are
accepted for use by department stores
employing the retail inventory and last-in,
first-out inventory methods for valuing
inventories for tax years ended on, or
with reference to, October 31, 2001.
Rev. Rul. 2001–66
The following Department Store
Inventory Price Indexes for October 2001
were issued by the Bureau of Labor Sta-
tistics. The indexes are accepted by the
Internal Revenue Service, under§1.472–
1(k) of the Income Tax Regulations and
Rev. Proc. 86–46 (1986–2 C.B. 739) for
appropriate application to inventories of
department stores employing the retail
inventory and last-in, first-out inventory
methods for tax years ended on, or with
reference to, October 31, 2001.
The Department Store Inventory Price
Indexes are prepared on a national basis
and include (a) 23 major groups of
departments, (b) three special combina-
tions of the major groups—soft goods,
durable goods, and miscellaneous goods,
and (c) a store total, which covers all
departments, including some not listed
separately, except for the following:
candy, food, liquor, tobacco, and contract
departments.
BUREAU OF LABOR STATISTICS,
DEPARTMENT STORE INVENTORY PRICE INDEXES BY DEPARTMENT GROUPS
(January 1941 = 100, unless otherwise noted)
GroupsOct. 2000Oct. 2001
Percent
Change
from Oct.
2000 to Oct.
2001
1
1.Piece Goods .........................................................................................................502.4500.3-0.4
2.Domestics and Draperies .....................................................................................608.5592.0-2.7
3.Women’s and Children’s Shoes ...........................................................................661.5675.52.1
4.Men’s Shoes .........................................................................................................915.5872.5-4.7
5.Infants’Wear ........................................................................................................649.0631.1-2.8
December 31, 20016372001–53 I.R.B.

BUREAU OF LABOR STATISTICS,
DEPARTMENT STORE INVENTORY PRICE INDEXES BY DEPARTMENT GROUPS—CONTINUED
(January 1941 = 100, unless otherwise noted)
GroupsOct. 2000Oct. 2001
Percent
Change
from Oct.
2000 to Oct.
2001
1
6. Women’s Underwear............................................................................................579.6575.3-0.7
7. Women’s Hosiery .................................................................................................346.2358.03.4
8. Women’s and Girls’Accessories .........................................................................555.6573.73.3
9. Women’s Outerwear and Girls’Wear..................................................................414.1398.4-3.8
10. Men’s Clothing.....................................................................................................601.0587.3-2.3
11. Men’s Furnishings................................................................................................632.7628.2-0.7
12. Boys’Clothing and Furnishings ..........................................................................494.4490.5-0.8
13. Jewelry .................................................................................................................937.1919.6-1.9
14. Notions .................................................................................................................792.8797.10.5
15. Toilet Articles and Drugs.....................................................................................971.1981.61.1
16. Furniture and Bedding .........................................................................................704.3628.8-10.7
17. Floor Coverings ...................................................................................................627.7616.0-1.9
18. Housewares ..........................................................................................................778.0767.1-1.4
19. Major Appliances .................................................................................................228.6224.1-2.0
20. Radio and Television ...........................................................................................57.952.6-9.2
21. Recreation and Education
2
..................................................................................92.689.2-3.7
22. Home Improvements
2
..........................................................................................128.9125.4-2.7
23. Auto Accessories
2
................................................................................................106.7110.23.3
Groups 1—15: Soft Goods ......................................................................................607.3598.6-1.4
Groups 16—20: Durable Goods ................................................................................437.8419.1-4.3
Groups 21—23: Misc. Goods
2
..................................................................................100.198.2-1.9
Store Total
3
...........................................................................................................543.6532.4-2.1
1
Absence of a minus sign before the percentage change in this column signifies a price increase.
2
Indexes on a January 1986=100 base.
3
The store total index covers all departments, including some not listed separately, except for the following: candy, food, liquor,
tobacco, and contract departments.
DRAFTING INFORMATION
The principal author of this revenue
ruling is Michael Burkom of the Office of
Associate Chief Counsel (Income Tax and
Accounting). For further information
regarding this revenue ruling, contact Mr.
Burkom at (202) 622–7718 (not a toll-
free call).
Section 483.—Interest on
Certain Deferred Payments
26 CFR 1.483–1: Computation of interest on certain
deferred payments.
As defined by section 1274A, the definitions for
both“qualified debt instruments”and“cash method
debt instruments”have dollar ceilings on the stated
principal amount. The limits to the stated principal
amount are adjusted for inflation for sales or
exchanges occurring in the 2002 calendar year. See
Rev. Rul. 2001–65, page 639.
2001–53 I.R.B638December 31, 2001

Section 832.—Insurance
Company Taxable Income
26 CFR 1.832–4: Gross income.
The salvage discount factors are set forth for the
2001 accident year. These factors will be used for
computing estimated salvage recoverable for pur-
poses of section 832 of the Code. See Rev. Proc.
2001–61, page 653.
Section 846.—Discounted
Unpaid Losses Defined
26 CFR 1.846–1: Application of discount factors.
The loss payment patterns and discount factors
are set forth for the 2001 accident year. These fac-
tors will be used for computing discounted unpaid
losses under section 846 of the Code. See Rev. Proc.
2001–60, page 643.
The salvage discount factors are set forth for the
2001 accident year. These factors will be used for
computing estimated salvage recoverable for pur-
poses of section 832 of the Code. See Rev. Proc.
2001–61, page 653.
Section 1274.—Determin-
ation of Issue Price in the
Case of Certain Debt
Instruments Issued for
Property
26 CFR 1.1274A–1: Special rules for certain trans-
actions where stated principal amount does not
exceed $2,800,000.
As defined by section 1274A, the definitions for
both“qualified debt instruments”and“cash method
debt instruments”have dollar ceilings on the stated
principal amount. The limits to the stated principal
amount are adjusted for inflation for sales or
exchanges occurring in the 2002 calendar year. See
Rev. Rul. 2001–65, on this page.
Section 1274A.—Special
Rules for Certain Transactions
Where Stated Principal
Amount Does Not Exceed
$2,800,000.
(Also§§1274, 483; 1.1274A–1, 1.483–1.)
Section 1274A—Inflation adjusted
numbers for 2002.This ruling provides
the dollar amounts, increased by the 2002
inflation adjustment, for section 1274A of
the Code. Rev. Rul. 2000–55 supple-
mented and superseded.
Rev. Rul. 2001–65
This revenue ruling provides the dollar
amounts, increased by the 2002 inflation
adjustment, for§1274A of the Internal
Revenue Code.
BACKGROUND
In general,§§483 and 1274 determine
the principal amount of a debt instrument
given in consideration for the sale or
exchange of nonpublicly traded property.
In addition, any interest on a debt instru-
ment subject to§1274 is taken into
account under the original issue discount
provisions of the Code. Section 1274A,
however, modifies the rules under§§483
and 1274 for certain types of debt instru-
ments.
In the case of a“qualified debt instru-
ment,”the discount rate used for purposes
of§§483 and 1274 may not exceed 9
percent, compounded semiannually. Sec-
tion 1274A(b) defines a qualified debt
instrument as any debt instrument given
in consideration for the sale or exchange
of property (other than new§38 property
within the meaning of§48(b), as in effect
on the day before the date of enactment
of the Revenue Reconciliation Act of
1990) if the stated principal amount of the
instrument does not exceed the amount
specified in§1274A(b). For debt instru-
ments arising out of sales or exchanges
before January 1, 1990, this amount is
$2,800,000.
In the case of a“cash method debt
instrument,”as defined in§1274A(c), the
borrower and lender may elect to use the
cash receipts and disbursements method
of accounting. In particular, for any cash
method debt instrument,§1274 does not
apply, and interest on the instrument is
accounted for by both the borrower and
the lender under the cash method of
accounting. A cash method debt instru-
ment is a qualified debt instrument that
meets the following additional require-
ments: (A) In the case of instruments aris-
ing out of sales or exchanges before Janu-
ary 1, 1990, the stated principal amount
does not exceed $2,000,000; (B) the
lender does not use an accrual method of
accounting and is not a dealer with
respect to the property sold or exchanged;
(C)§1274 would have applied to the
debt instrument but for an election
under§1274A(c); and (D) an election
under§1274A(c) is jointly made with
respect to the debt instrument by the bor-
rower and lender. Section 1.1274A–
1(c)(1) of the Income Tax Regulations
provides rules concerning the time for,
and manner of, making this election.
Section 1274A(d)(2) provides that, for
any debt instrument arising out of a
sale or exchange during any calendar
year after 1989, the dollar amounts stated
in§1274A(b) and§1274A(c)(2)(A) are
increased by the inflation adjustment for
the calendar year. Any increase due to the
inflation adjustment is rounded to the
nearest multiple of $100 (or, if the
increase is a multiple of $50 and not of
$100, the increase is increased to the
nearest multiple of $100). The inflation
adjustment for any calendar year is the
percentage (if any) by which the CPI for
the preceding calendar year exceeds the
CPI for calendar year 1988. Section
1274A(d)(2)(B) defines the CPI for any
calendar year as the average of the Con-
sumer Price Index as of the close of the
12-month period ending on September 30
of that calendar year.
INFLATION-ADJUSTED AMOUNTS
For debt instruments arising out of
sales or exchanges after December 31,
1989, the inflation-adjusted amounts
under§1274A are shown in Table 1.
December 31, 20016392001–53 I.R.B.

Rev. Rul. 2001–65 Table 1
Inflation-Adjusted Amounts Under§1274A
Calendar Year of
Sale or Exchange
1274A(b) Amount
(qualified debt instrument)
1274A(c)(2)(A) Amount
(cash method debt instrument)
1990$2,933,200$2,095,100
1991$3,079,600$2,199,700
1992$3,234,900$2,310,600
1993$3,332,400$2,380,300
1994$3,433,500$2,452,500
1995$3,523,600$2,516,900
1996$3,622,500$2,587,500
1997$3,723,800$2,659,900
1998$3,823,100$2,730,800
1999$3,885,500$2,775,400
2000$3,960,100$2,828,700
2001$4,085,900$2,918,500
2002$4,217,500$3,012,500
Note:These inflation adjustments were computed using the All-Urban, Consumer Price Index, 1982–1984 base, published by
the Bureau of Labor Statistics.
EFFECT ON OTHER DOCUMENTS
Rev. Rul. 2000–55 (2000–52 I.R.B.
595) is supplemented and superseded.
DRAFTING INFORMATION
The principal author of this revenue
ruling is Courtney Shepardson of the
Office of the Assistant Chief Counsel
(Financial Institutions and Products). For
further information regarding this revenue
ruling, contact Ms. Shepardson at (202)
622–3930 (not a toll-free call).
Section 7872.—Treatment of
Loans With Below-Market
Interest Rates
CPI adjustment for below-market
loans–2002.The amount that section
7872(g) of the Code permits a taxpayer to
lend a qualified continuing care facility
without incurring imputed interest is pub-
lished and adjusted for inflation for years
1987–2002.
Rev. Rul. 2001–64
This revenue ruling publishes the
amount that§7872(g) of the Internal
Revenue Code permits a taxpayer to lend
to a qualifying continuing care facility
without incurring imputed interest. The
amount is adjusted for inflation for the
years after 1986.
Section 7872 generally treats loans
bearing a below-market interest rate as if
they bore interest at the market rate.
Section 7872(g)(1) provides that, in
general,§7872 does not apply for any
calendar year to any below-market loan
made by a lender to a qualified continu-
ing care facility pursuant to a continuing
care contract if the lender (or the lender’s
spouse) attains age 65 before the close of
the year.
Section 7872(g)(2) provides that, in
the case of loans made after October 11,
1985, and before 1987,§7872(g)(1)
applies only to the extent that the aggre-
gate outstanding amount of any loan to
which§7872(g) applies (determined
without regard to§7872(g)(2)), when
added to the aggregate outstanding
amount of all other previous loans
between the lender (or the lender’s
spouse) and any qualified continuing care
facility to which§7872(g)(1) applies,
does not exceed $90,000.
Section 7872(g)(5) provides that, for
loans made during any calendar year after
1986 to which§7872(g)(1) applies, the
$90,000 limit specified in§7872(g)(2) is
increased by an inflation adjustment. The
inflation adjustment for any calendar year
is the percentage (if any) by which the
Consumer Price Index (CPI) for the pre-
ceding calendar year exceeds the CPI for
calendar year 1985. Section 7872(g)(5)
states that the CPI for any calendar year
is the average of the CPI as of the close
of the 12-month period ending on Sep-
tember 30 of that calendar year.
Table 1 sets forth the amount specified
in§7872(g)(2) of the Code. The amount
is increased by the inflation adjustment
for the years 1987–2002.
2001–53 I.R.B640December 31, 2001

REV. RUL. 2001–64 TABLE 1
Limit Under 7872(g)(2)
YearAmount
Before 1987$ 90,000
1987$ 92,200
1988$ 94,800
1989$ 98,800
1990$103,500
1991$108,600
1992$114,100
1993$117,500
1994$121,100
1995$124,300
1996$127,800
1997$131,300
1998$134,800
1999$137,000
2000$139,700
2001$144,100
2002$148,800
Note:These inflation adjustments were computed using the All-Urban, Consumer Price Index 1982–1984 base, published
by the Bureau of Labor Statistics.
EFFECT ON OTHER DOCUMENTS
Rev. Rul. 2000–56 (2000–52 I.R.B.
598) is supplemented and superseded.
DRAFTING INFORMATION
The author of this revenue ruling is
Courtney Shepardson of the Office of
Assistant Chief Counsel (Financial Insti-
tutions and Products). For further infor-
mation regarding this revenue ruling, con-
tact Ms. Shepardson at (202) 622–3940
(not a toll-free call).
December 31, 20016412001–53 I.R.B.

Part III.—Administrative, Procedural, and Miscellaneous
2002 Limitations Adjusted as
Provided in Section 415(d),
etc.
1
Notice 2001–84
Section 415 of the Internal Revenue
Code (the Code) provides for dollar limi-
tations on benefits and contributions
under qualified retirement plans. Section
415 also requires that the Commissioner
annually adjust these limits for cost-of-
living increases. Other limitations appli-
cable to deferred compensation plans are
also affected by these adjustments. The
Economic Growth and Tax Relief Recon-
ciliation Act of 2001 (EGTRRA) reset
many of the statutory dollar amounts pre-
viously adjusted on an annual basis under
§415 of the Code. Additionally, other
new limitation amounts were added by
EGTRRA.
Limitations reset or established by
EGTRRA
Effective for limitation years ending
after December 31, 2001, the limitation
on the annual benefit under a defined
benefit plan under§415(b)(1)(A) is
increased from $140,000 to $160,000 by
section 611 of EGTRRA. See, Q&A–1of
Rev. Rul. 2001–51 (2001–45 I.R.B. 427).
The limitation for defined contribution
plans under§415(c)(1)(A) of the Code is
increased from $35,000 to $40,000 by
section 611 of EGTRRA effective for
limitation years beginning after Decem-
ber 31, 2001. However, the limitation for
defined contribution plans with non-
calendar limitation years beginning
before January 1, 2002, and ending after
December 31, 2001, remains unchanged
at $35,000.See, Q&A–9 of Rev. Rul.
2001–51.
The limitation under§402(g)(1) of the
Code on the exclusion for elective defer-
rals described in§402(g)(3) is increased
from $10,500 to $11,000 by section 611
of EGTRRA. This limitation affects elec-
tive deferrals to section 401(k) plans and
to the Federal Government’s Thrift Sav-
ings Plan, among other plans.
The annual compensation limit under
§§401(a)(17), 404(l), and 408(k)(3)(C)
of the Code is increased from $170,000 to
$200,000 by section 611 of EGTRRA.
The limitation under§408(p)(2)(E) of
the Code (formerly under§408(p)(2)(A))
regarding SIMPLE retirement accounts is
increased from $6,500 to $7,000 by
section 611 of EGTRRA.
The limitation on deferrals under
§457(e)(15) of the Code (formerly under
§§457(b)(2) and (c)(1)) concerning
deferred compensation plans of state and
local governments and tax-exempt orga-
nizations is increased from $8,500 to
$11,000 by section 611 of EGTRRA.
Thedollarlimitationunder
§416(i)(1)(A)(i) of the Code concerning
the definition of key employee in a top-
heavy plan is $130,000, as added by sec-
tion 613 of EGTRRA.
Thedollarlimitationunder
§414(v)(2)(B)(i) of the Code for catch-
up contributions to an applicable
employer plan other than a plan
described in§401(k)(11) or 408(p) for
individualsaged50or overis
$1,000. The dollarlimitation under
§414(v)(2)(B)(ii) for catch-up contribu-
tions to an applicable employer plan
described in§401(k)(11) or 408(p) for
individuals aged 50 or over is $500. Both
of these limitations were added by section
631 of EGTRRA.
Limitations not reset by EGTRRA
The dollar amounts not reset by
EGTRRA are adjusted at the same time
and in the same manner as under§415(d)
of the Code as follows:
For participants who separated from
service before January 1, 2002, the
limitation for defined benefit plans
under§415(b)(1)(B) is computed by
multiplying the participant’s compensa-
tion limitation, as adjusted through 2001,
by 1.0270.
Thedollaramountunder
§409(o)(1)(C)(ii) for determining the
maximum account balance in an
employee stock ownership plan subject to
a 5-year distribution period is increased
from $780,000 to $800,000, while the
dollar amount used to determine the
lengthening of the 5-year distribution
period is increased from $155,000 to
$160,000.
The limitation used in the definition
of highly compensated employee under
§414(q)(1)(B) is increased from $85,000
to $90,000.
The annual compensation limitation
under§401(a)(17) for eligible partici-
pants in certain governmental plans that,
under the plan as in effect on July 1,
1993, allowed cost-of-living adjustments
to the compensation limitation under the
plan under§401(a)(17) to be taken into
account, is increased from $285,000 to
$295,000.
Thecompensationamountunder
§408(k)(2)(C) regarding simplified
employee pensions (SEPs) remains
unchanged at $450.
Thecompensationamounts under
§1.61–21(f)(5)(i) of the Income Tax
Regulations concerning the definition of
“control employee”for fringe benefit
valuation purposes is increased from
$75,000 to $80,000. The compensation
amount under§1.61–21(f)(5)(iii) is
increased from $155,000 to $160,000.
Administrators of defined benefit or
defined contribution plans that have
received favorable determination letters
should not request new determination let-
ters solely because of yearly amendments
to adjust maximum limitations in the
plans.
DRAFTING INFORMATION
The principal author of this notice is
John Heil of the Employee Plans, Tax
Exempt and Government Entities Divi-
sion. For further information regarding
the information in this notice, contact the
Employee Plans Customer Assistance
Service at 1–877–829–5500 between the
hours of 8:00 a.m. and 6:30 p.m. Eastern
time, Monday through Friday (a toll-free
call). For information on the methodology
used in arriving at these numbers, contact
Mr. Heil at 1–202–283–9888 (not a toll-
free call).
1
Based on News Release IR-2001-115, dated December 11, 2001.
2001–53 I.R.B642December 31, 2001

26 CFR 601.201: Rulings and determination letters.
(Also Part I, Sections 846; 1.846–1.)
Rev. Proc. 2001–60
SECTION 1. PURPOSE
This revenue procedure prescribes the
loss payment patterns and discount fac-
tors for the 2001 accident year. These fac-
tors will be used for computing dis-
counted unpaid losses under§846 of the
Internal Revenue Code.SeeRev. Proc.
98–11 (1998–1 C.B. 358) for background
concerning the loss payment patterns and
application of the discount factors.
SECTION 2. SCOPE
This revenue procedure applies to any
taxpayer that is required to discount its
unpaid losses under§846 for a line of
business using discount factors published
by the Secretary.
SECTION 3. TABLES OF DISCOUNT
FACTORS
.01 The following tables present sepa-
rately for each line of business the dis-
count factors under§846 for accident
year 2001. All the discount factors pre-
sented in this section were determined
using the applicable interest rate under
§846(c) for 2001, which is 6.00 percent,
and by assuming all loss payments occur
in the middle of the calendar year.
.02 If the groupings of individual lines
of business on the annual statement
change, taxpayers must discount the
unpaid losses on the affected lines of
business in accordance with the discount-
ing patterns that would have applied to
those unpaid losses based on their classi-
fication on the 1995 annual statement.
SeeRev. Proc. 98–11 (1998–1 C.B. 358)
section 2, for additional background on
discounting under section 846 and the use
of the Secretary’s tables.
.03 Section V of Notice 88–100
(1988–2 C.B. 439) provides a composite
discount factor to be used in determining
the discounted unpaid losses for accident
years that are not separately reported on
the annual statement. Taxpayers that do
not use the methodology set forth in sec-
tion V of Notice 88–100 should instead
use the discount factor for the appropriate
year in the Secretary’s table for that line
of business. If such taxpayers have
unpaid losses relating to an accident year
that is older than the last accident year for
which a discount factor is presented in the
Secretary’s table, those unpaid losses
should be discounted using the discount
factor for the last accident year in the
Secretary’s table.Seesection 2.03(3) of
Rev. Proc. 98–11.
.04 Tables
Accident and Health
(Other Than Disability Income or Credit Disability Insurance)
Discount factor for all years equals 97.1286 percent.
Auto Physical Damage
Tax Year
Cumulative
Losses Paid
(%)
Estimated
Losses
Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
AY+ 089.943089.943010.05709.718296.6309
AY+ 199.38149.43840.61860.583894.3797
AY+ 2N/A0.30930.30930.300497.1286
Commercial Auto/Truck Liability/Medical
Tax Year
Cumulative
Losses Paid
(%)
Estimated
Losses
Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
AY+025.807525.807574.192565.314488.0336
AY+149.879324.071850.120744.449788.6854
December 31, 20016432001–53 I.R.B.

Commercial Auto/Truck Liability/Medical—Continued
Tax Year
Cumulative
Losses Paid
(%)
Estimated
Losses
Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
AY+267.659217.779932.340828.811289.0862
AY+379.771112.111920.228918.069989.3272
AY+488.21328.442111.786810.462488.7640
AY+593.17784.96466.82225.978887.6375
AY+695.96232.78454.03773.470785.9577
AY+797.00911.04682.99092.601286.9707
AY+897.57190.56282.42812.177889.6931
AY+998.21910.64711.78091.642292.2109
AY+10N/A0.64711.13381.074594.7685
AY+11N/A0.64710.48670.472797.1286
Composite Discount Factors
Tax Year
Cumulative
Losses Paid
(%)
Estimated
Losses
Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
AY+035.461135.461164.538955.563586.0930
AY+159.144923.683840.855134.513384.4773
AY+270.822011.677129.178024.561884.1792
AY+381.901911.079918.098114.628180.8265
AY+486.36884.466913.631210.906880.0133
AY+590.04973.68099.95037.771578.1028
AY+692.74882.69917.25125.458875.2820
AY+793.82591.07716.17414.677575.7592
AY+894.24150.41565.75854.530278.6700
AY+994.85680.61535.14324.168581.0493
AY+10N/A0.61534.52793.785183.5960
AY+11N/A0.61533.91253.378786.3558
AY+12N/A0.61533.29722.947989.4060
AY+13N/A0.61532.68192.491292.8922
AY+14N/A0.61532.06652.007297.1286
2001–53 I.R.B644December 31, 2001

Fidelity/Surety
Tax Year
Cumulative
Losses Paid
(%)
Estimated
Losses
Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
AY+024.154024.154075.846070.358592.7650
AY+159.096134.942140.903938.605094.3797
AY+2N/A20.452020.452019.864797.1286
Financial Guaranty/Mortgage Guaranty
Tax Year
Cumulative
Losses Paid
(%)
Estimated
Losses
Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
AY+09.25139.251390.748784.143192.7210
AY+150.565941.314649.434146.655894.3797
AY+2N/A24.717124.717124.007397.1286
International
(Composite)
Tax Year
Cumulative
Losses Paid
(%)
Estimated
Losses
Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
AY+035.461135.461164.538955.563586.0930
AY+159.144923.683840.855134.513384.4773
AY+270.822011.677129.178024.561884.1792
AY+381.901911.079918.098114.628180.8265
AY+486.36884.466913.631210.906880.0133
AY+590.04973.68099.95037.771578.1028
AY+692.74882.69917.25125.458875.2820
AY+793.82591.07716.17414.677575.7592
AY+894.24150.41565.75854.530278.6700
AY+994.85680.61535.14324.168581.0493
AY+10N/A0.61534.52793.785183.5960
AY+11N/A0.61533.91253.378786.3558
AY+12N/A0.61533.29722.947989.4060
AY+13N/A0.61532.68192.491292.8922
AY+14N/A0.61532.06652.007297.1286
December 31, 20016452001–53 I.R.B.

Medical Malpractice—Claims-Made
Tax Year
Cumulative
Losses Paid
(%)
Estimated
Losses
Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
AY+06.38996.389993.610177.432282.7178
AY+124.001117.611275.998963.946384.1411
AY+242.697018.695957.303048.534584.6980
AY+358.061015.364041.939035.628484.9528
AY+469.665311.604330.334725.818785.1128
AY+575.60335.938024.396721.254287.1194
AY+681.87866.275318.121416.068788.6725
AY+787.85395.975312.146110.880989.5834
AY+889.52071.666810.47939.817693.6862
AY+994.30254.78185.69755.483696.2450
AY+10N/A4.78180.91570.889497.1286
Medical Malpractice—Occurrence
Tax Year
Cumulative
Losses Paid
(%)
Estimated
Losses
Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
AY+02.12392.123997.876172.433074.0048
AY+16.48314.359293.516972.290977.3025
AY+215.59879.115684.401367.243379.6709
AY+331.906216.307568.093854.488380.0194
AY+445.093113.186854.906944.180980.4650
AY+550.07514.982149.924941.702483.5302
AY+660.972810.897639.027232.984784.5171
AY+769.21388.241130.786226.479186.0097
AY+872.86583.651927.134224.307989.5840
AY+980.00057.134719.999518.420892.1061
AY+10N/A7.134712.864812.180394.6798
AY+11N/A7.13475.73005.565597.1286
2001–53 I.R.B646December 31, 2001

Miscellaneous Casualty
Tax Year
Cumulative
Losses Paid
(%)
Estimated
Losses
Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
AY+077.666977.666922.333121.211894.9792
AY+194.067316.40045.93275.599394.3797
AY+2N/A2.96642.96642.881297.1286
Multiple Peril Lines
(Homeowners/Farmowners Multiple Peril, Commercial Multiple Peril, and Special Liability
(Ocean Marine, Aircraft (All Perils), Boiler, and Machinery))
Tax Year
Cumulative
Losses Paid
(%)
Estimated
Losses
Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
AY+055.958755.958744.041339.252889.1272
AY+177.893921.935222.106119.024386.0589
AY+284.00836.114415.991713.870686.7360
AY+391.31887.31058.68127.176282.6633
AY+492.16700.84827.83306.733485.9627
AY+594.38382.21685.61624.855286.4488
AY+696.49592.11213.50412.971984.8124
AY+797.36700.87122.63302.253385.5817
AY+898.00340.63641.99661.733486.8153
AY+998.40590.40251.59411.423089.2642
AY+10N/A0.40251.19161.094091.8045
AY+11N/A0.40250.78920.745394.4346
AY+12N/A0.40250.38670.375697.1286
Other
(Including Credit)
Tax Year
Cumulative
Losses Paid
(%)
Estimated
Losses
Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
AY+066.741866.741833.258231.435594.5195
AY+189.275522.533710.724510.121794.3797
AY+2N/A5.36225.36225.208397.1286
December 31, 20016472001–53 I.R.B.

Other Liability—Claims-Made
Tax Year
Cumulative
Losses Paid
(%)
Estimated
Losses
Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
AY+010.244010.244089.756074.402382.8940
AY+129.376319.132370.623759.168683.7800
AY+244.411115.034955.588947.239384.9799
AY+367.819723.408632.180325.973180.7112
AY+473.47535.655526.524721.708781.8434
AY+578.86045.385221.139617.466982.6265
AY+683.50274.642216.497313.735483.2585
AY+784.06760.564915.932413.977987.7327
AY+885.21291.145314.787113.637492.2252
AY+990.59925.38639.40088.910294.7808
AY+10N/A5.38634.01453.899397.1286
Other Liability—Occurrence
Tax Year
Cumulative
Losses Paid
(%)
Estimated
Losses
Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
AY+013.575113.575186.424968.437079.1866
AY+126.396412.821373.603659.342980.6249
AY+240.272513.876159.727548.617181.3982
AY+355.456615.184144.543435.901180.5981
AY+465.33099.874234.669127.889080.4434
AY+574.06478.733925.935320.570379.3140
AY+680.90906.844219.091014.758077.3031
AY+784.36223.453215.637812.088177.3006
AY+884.61630.254215.383712.551781.5914
AY+986.73112.114713.268911.127683.8621
AY+10N/A2.114711.15429.618086.2277
AY+11N/A2.11479.03958.017888.6981
AY+12N/A2.11476.92476.321691.2910
AY+13N/A2.11474.81004.523794.0479
AY+14N/A2.11472.69532.617997.1286
2001–53 I.R.B648December 31, 2001

Private Passenger Auto Liability/Medical
Tax Year
Cumulative
Losses Paid
(%)
Estimated
Losses
Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
AY+037.933937.933962.066156.509291.0468
AY+167.704429.770532.295629.249290.5670
AY+281.531613.827218.468416.768190.7936
AY+389.88988.358310.11029.168990.6897
AY+494.65314.76335.34694.814990.0509
AY+597.12652.47342.87352.557388.9961
AY+698.45871.33221.54131.339286.8852
AY+798.98110.52241.01890.881786.5309
AY+899.23300.25190.76700.675288.0336
AY+999.40670.17370.59330.536990.4936
AY+10N/A0.17370.41960.390393.0125
AY+11N/A0.17370.24600.234995.5126
AY+12N/A0.17370.07230.070297.1286
Products Liability—Claims-Made
Tax Year
Cumulative
Losses Paid
(%)
Estimated
Losses
Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
AY+04.97504.975095.025076.130880.1166
AY+115.107210.132284.892870.267082.7714
AY+230.956015.848869.044058.165684.2443
AY+338.24207.286061.758054.154187.6876
AY+468.610130.368131.389926.137583.2673
AY+578.59669.986521.403417.424181.4078
AY+688.39719.800511.60298.379372.2169
AY+793.29574.89866.70433.838657.2557
AY+888.3815-4.914211.61859.128478.5676
AY+989.61051.229010.38958.410780.9542
AY+10N/A1.22909.16047.650083.5111
AY+11N/A1.22907.93146.843686.2851
AY+12N/A1.22906.70245.988889.3544
AY+13N/A1.22905.47335.082892.8653
AY+14N/A1.22904.24434.122497.1286
December 31, 20016492001–53 I.R.B.

Products Liability–Occurrence
Tax Year
Cumulative
Losses Paid
(%)
Estimated
Losses
Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
AY+09.06539.065390.934769.404176.3230
AY+114.90355.838285.096567.557579.3893
AY+229.259114.355570.740956.831080.3369
AY+345.646216.387154.353843.369379.7908
AY+457.594511.948342.405533.670079.4000
AY+563.86346.268936.136629.235980.9039
AY+675.226611.363224.773419.291077.8696
AY+778.26793.041321.732117.317279.6849
AY+878.1898-0.078121.810218.436784.5322
AY+981.87223.682518.127815.751586.8918
AY+10N/A3.682514.445312.905389.3391
AY+11N/A3.682510.76289.888391.8744
AY+12N/A3.68257.08036.690294.4902
AY+13N/A3.68253.39793.300397.1286
Reinsurance A
(Nonproportional Property)
Tax Year
Cumulative
Losses Paid
(%)
Estimated
Losses
Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
AY+027.166827.166872.833264.940389.1631
AY+168.700841.534031.299226.074883.3084
AY+270.03621.335429.963826.264587.6541
AY+387.533817.497612.46629.825578.8169
AY+490.21322.67949.78687.656478.2320
AY+591.37511.16198.62496.919680.2275
AY+694.38453.00955.61554.236375.4399
AY+793.3293-1.05526.67075.576983.6030
AY+8N/A1.03875.63204.842185.9749
AY+9N/A1.03874.59324.063288.4598
AY+10N/A1.03873.55453.237591.0821
AY+11N/A1.03872.51582.362393.9007
AY+12N/A1.03871.47711.434697.1286
2001–53 I.R.B650December 31, 2001

Reinsurance B
(Non-proportional Liability)
Tax Year
Cumulative
Losses Paid
(%)
Estimated
Losses
Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
AY+06.69626.696293.303869.399674.3802
AY+122.394415.698277.605657.401373.9654
AY+232.648610.254267.351450.287974.6651
AY+350.223417.574849.776635.210970.7379
AY+453.58393.360546.416133.863772.9568
AY+555.68382.099944.316233.733576.1201
AY+663.61447.930636.385627.592575.8336
AY+766.42112.806633.578926.358478.4969
AY+8N/A2.806630.772325.050381.4054
AY+9N/A2.806627.965623.663784.6171
AY+10N/A2.806625.159022.193988.2146
AY+11N/A2.806622.352420.635992.3211
AY+12N/A2.806619.545718.984597.1286
Reinsurance C
(Financial Lines)
Tax Year
Cumulative
Losses Paid
(%)
Estimated
Losses
Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
AY+011.462211.462288.537877.362387.3777
AY+144.579133.116955.420947.908186.4441
AY+263.913419.334336.086630.876785.5627
AY+365.61851.705134.381530.973790.0885
AY+479.977814.359320.022218.048490.1419
AY+588.91528.937411.08489.929789.5793
AY+691.24902.33388.75108.122792.8199
AY+794.76453.51555.23554.990695.3224
AY+8N/A3.51551.72001.670697.1286
December 31, 20016512001–53 I.R.B.

Special Property
(Fire, Allied Lines, Inland Marine, Earthquake, Glass, Burglary and Theft)
Tax Year
Cumulative
Losses Paid
(%)
Estimated
Losses
Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
AY+057.489557.489542.510540.522795.3241
AY+190.519333.02979.48078.947994.3797
AY+2N/A4.74044.74044.604397.1286
Workers’Compensation
Tax Year
Cumulative
Losses Paid
(%)
Estimated
Losses
Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
AY+023.646123.646176.353962.719982.1437
AY+144.816621.170555.183444.686780.9786
AY+257.965213.148642.034833.830680.4824
AY+372.054214.088927.945821.355076.4156
AY+480.55428.500019.445813.885071.4034
AY+584.88764.333415.112410.256567.8684
AY+687.11732.229712.88278.576366.5723
AY+788.26471.147311.73537.909667.4000
AY+888.54040.275711.45968.100370.6858
AY+988.80620.265811.19388.312674.2613
AY+10N/A0.265810.92798.537778.1273
AY+11N/A0.265810.66218.776382.3127
AY+12N/A0.265810.39639.029186.8499
AY+13N/A0.265810.13049.297291.7750
AY+14N/A0.26589.86469.581397.1286
DRAFTING INFORMATION
The principal author of this revenue
procedure is Katherine A. Hossofsky of
the Office of the Associate Chief Counsel
(Financial Institutions and Products). For
further information regarding this revenue
procedure, contact Ms. Hossofsky at
(202) 622–3477 (not a toll-free number).
2001–53 I.R.B652December 31, 2001

26 CFR 601.201: Rulings and determination letters.
(Also Part I, Sections 832, 846; 1.832–4, 1.846–1.)
Rev. Proc. 2001–61
SECTION 1. PURPOSE
This revenue procedure prescribes the
salvage discount factors for the 2001
accident year. These factors will be used
for computing discounted estimated sal-
vage recoverable under§832 of the Inter-
nal Revenue Code.
SECTION 2. BACKGROUND
Section 832(b)(5)(A) requires that all
estimated salvage recoverable (including
that which cannot be treated as an asset
for state accounting purposes) be taken
into account in computing the deduction
for losses incurred. Under§832(b)(5)(A),
paid losses are to be reduced by salvage
and reinsurance recovered during the tax-
able year. This amount is adjusted to
reflect changes in discounted unpaid
losses on nonlife insurance contracts and
in unpaid losses on life insurance con-
tracts. An adjustment is then made to
reflect any changes in discounted esti-
mated salvage recoverable and in reinsur-
ance recoverable.
Pursuant to§832(b), the amount of
estimated salvage is determined on a dis-
counted basis in accordance with proce-
dures established by the Secretary.
SECTION 3. SCOPE
This revenue procedure applies to any
taxpayer that is required to discount esti-
mated salvage recoverable under§832.
SECTION 4. APPLICATION
.01 The following tables present sepa-
rately for each line of business the dis-
count factors under§832 for the 2001
accident year. All the discount factors
presented in this section were deter-
mined using the applicable interest rate
under§846(c) for 2001, which is 6.00
percent, and by assuming all estimated
salvage is recovered in the middle of each
calendar year.SeeRev. Proc. 98–12
(1998–1 C.B. 367) for background
regarding the tables.
.02 These tables must be used by tax-
payers irrespective of whether they
electedto discountunpaid losses
using their own historical experience
under§846.
.03 Section V of Notice 88–100
(1988–2 C. B. 439) provides guidance
concerning the determination of discount
factors for unpaid losses for accident
years not separately reported on the
annual statement. Taxpayers that do not
use the methodology set forth in section
V of Notice 88–100 should instead use
the discount factors for the appropriate
year in the Secretary’s table for that line
of business. If such taxpayers have
unpaid losses relating to an accident year
that is older than the last accident year for
which a discount factor is presented in the
Secretary’s table, those unpaid losses
should be discounted using the discount
factor for the last accident year in the
Secretary’s table.Seesection 2.03(3) of
Rev. Proc. 98–11 (1998–1 C.B. 358).
.04 Tables.
Accident and Health
(Other Than Disability
Income or Credit Disability
Insurance)
Discount factor for all
years equals 97.1286 percent.
Auto Physical Damage
Tax Year
Discount
Factors
(%)
AY+095.7674
AY+194.3797
AY+297.1286
Commercial Auto/Truck
Liability/Medical
Tax Year
Discount
Factors
(%)
AY+088.5939
AY+187.7783
AY+289.4468
AY+388.7496
AY+488.5847
Commercial Auto/Truck
Liability/Medical
Tax Year
Discount
Factors
(%)
AY+590.8892
AY+686.3339
AY+791.7857
AY+890.2742
AY+992.7870
AY+1095.2906
AY+1197.1286
Composite Discount
Factors
Tax Year
Discount
Factors
(%)
AY+086.1785
AY+184.6206
AY+284.2139
AY+384.1124
AY+484.8349
AY+585.3994
AY+685.4575
AY+785.5553
AY+888.3172
AY+990.7912
AY+1093.3259
AY+1195.8396
AY+1297.1286
Fidelity/Surety
Tax Year
Discount
Factors
(%)
AY+093.0996
AY+194.3797
AY+297.1286
December 31, 20016532001–53 I.R.B.

Financial Guaranty/
Mortgage Guaranty
Tax Year
Discount
Factors
(%)
AY+094.8732
AY+194.3797
AY+297.1286
International
(Composite)
Tax Year
Discount
Factors
(%)
AY+086.1785
AY+184.6206
AY+284.2139
AY+384.1124
AY+484.8349
AY+585.3994
AY+685.4575
AY+785.5553
AY+888.3172
AY+990.7912
AY+1093.3259
AY+1195.8396
AY+1297.1286
Medical Malpractice—
Claims-Made
Tax Year
Discount
Factors
(%)
AY+070.9439
AY+173.5534
AY+272.1559
AY+371.5538
AY+475.0244
AY+573.4668
AY+682.8921
AY+791.7648
AY+896.4576
AY+997.1286
Medical Malpractice—
Occurrence
Tax Year
Discount
Factors
(%)
AY+064.9126
AY+168.2051
AY+272.6369
AY+376.3310
AY+473.2474
AY+579.1277
AY+683.9409
AY+786.9752
AY+891.3121
AY+993.8960
AY+1096.4969
AY+1197.1286
Miscellaneous Casualty
Tax Year
Discount
Factors
(%)
AY+095.1962
AY+194.3797
AY+297.1286
Multiple Peril Lines
(Homeowners/Farmowners
Multiple Peril, Commercial
Multiple Peril, and Special Liability
(Ocean Marine, Aircraft (All Perils),
Boiler and Machinery))
Tax Year
Discount
Factors
(%)
AY+088.6776
AY+187.6647
AY+288.4118
AY+388.0806
AY+489.1756
AY+590.5830
AY+690.5792
AY+789.5685
Multiple Peril Lines
(Homeowners/Farmowners
Multiple Peril, Commercial
Multiple Peril, and Special Liability
(Ocean Marine, Aircraft (All Perils),
Boiler and Machinery))
Tax Year
Discount
Factors
(%)
AY+891.9074
AY+994.5167
AY+1097.1286
Other
(Including Credit)
Tax Year
Discount
Factors
(%)
AY+096.2118
AY+194.3797
AY+297.1286
Other Liability—
Claims-Made
Tax Year
Discount
Factors
(%)
AY+078.1587
AY+183.4921
AY+282.5351
AY+380.2819
AY+483.1960
AY+587.7328
AY+686.3005
AY+791.7967
AY+893.8594
AY+996.4520
AY+1097.1286
2001–53 I.R.B654December 31, 2001

Other Liability—
Occurrence
Tax Year
Discount
Factors
(%)
AY+079.1003
AY+179.8165
AY+282.1449
AY+384.0693
AY+485.2943
AY+582.9430
AY+686.9293
AY+788.8442
AY+892.8410
AY+995.3428
AY+1097.1286
Private Passenger Auto
Liability/Medical
Tax Year
Discount
Factors
(%)
AY+091.8234
AY+191.2893
AY+290.3834
AY+390.0088
AY+489.5577
AY+590.0005
AY+688.8299
AY+789.5391
AY+890.2147
AY+992.7265
AY+1095.2329
AY+1197.1286
Products Liability—
Claims-Made
Tax Year
Discount
Factors
(%)
AY+079.5379
AY+181.5337
AY+285.9078
AY+385.8225
AY+481.5464
AY+588.3645
AY+681.2686
AY+788.5406
AY+896.8633
AY+997.1286
Products Liability—
Occurrence
Tax Year
Discount
Factors
(%)
AY+076.1115
AY+178.6586
AY+277.0761
AY+378.3522
AY+480.0713
AY+579.4367
AY+680.7804
AY+773.1074
AY+878.4522
AY+980.8473
AY+1083.4161
AY+1186.2062
AY+1289.2973
AY+1392.8357
AY+1497.1286
Reinsurance A
(Nonproportional Property)
Tax Year
Discount
Factors
(%)
AY+086.8922
AY+189.9989
AY+292.6537
AY+392.0270
AY+479.5110
AY+594.9370
AY+693.5902
AY+796.1337
AY+897.1286
Reinsurance B
(Nonproportional Liability)
Tax Year
Discount
Factors
(%)
AY+075.2252
AY+177.4497
AY+278.1634
AY+377.5844
AY+480.0321
AY+575.2265
AY+676.9615
AY+784.2881
AY+886.6481
AY+989.1014
AY+1091.6542
AY+1194.3176
AY+1297.1286
December 31, 20016552001–53 I.R.B.

Reinsurance C
(Financial Lines)
Tax Year
Discount
Factors
(%)
AY+081.5339
AY+183.8710
AY+287.0718
AY+392.8074
AY+491.4169
AY+593.2543
AY+689.8633
AY+797.0178
AY+897.1286
Special Property
(Fire, Allied Lines, Inland Marine,
Earthquake, Glass, Burglary and
Theft)
Tax Year
Discount
Factors
(%)
AY+092.4418
AY+194.3797
AY+297.1286
Workers’Compensation
Tax Year
Discount
Factors
(%)
AY+078.9510
AY+181.3287
AY+283.1942
AY+384.7269
AY+484.8406
AY+585.0065
AY+686.1624
AY+786.8999
AY+889.2560
AY+991.7969
AY+1094.4286
AY+1197.1286
DRAFTING INFORMATION
The principal author of this revenue
procedure is Katherine A. Hossofsky of
the Office of the Associate Chief Counsel
(Financial Institutions and Products). For
further information regarding this revenue
procedure, contact Ms. Hossofsky at
(202) 622–3477 (not a toll-free number).
2001–53 I.R.B656December 31, 2001

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as“rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle
applied to A, and the new ruling holds
that the same principle also applies to B,
the earlier ruling is amplified. (Compare
withmodified, below).
Clarifiedis used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously
published ruling and points out an essen-
tial difference between them.
Modifiedis used where the substance
of a previously published position is
being changed. Thus, if a prior ruling
held that a principle applied to A but not
to B, and the new ruling holds that it
applies to both A and B, the prior ruling
is modified because it corrects a pub-
lished position. (Compare withamplified
andclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used
in a ruling that lists previously published
rulings that are obsoleted because of
changes in law or regulations. A ruling
may also be obsoleted because the sub-
stance has been included in regulations
subsequently adopted.
Revokeddescribes situations where the
position in the previously published rul-
ing is not correct and the correct position
is being stated in the new ruling.
Supersededdescribes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a
period of time in separate rulings. If the
new ruling does more than restate the
substance of a prior ruling, a combination
of terms is used. For example,modified
andsupersededdescribes a situation
where the substance of a previously pub-
lished ruling is being changed in part and
is continued without change in part and it
is desired to restate the valid portion of
the previously published ruling in a new
ruling that is self contained. In this case,
the previously published ruling is first
modified and then, as modified, is super-
seded.
Supplementedis used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.
Suspendedis used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.
Abbreviations
The following abbreviations in current
use and formerly used will appear in
material published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security
Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign Corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Intemal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statements of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.
December 31, 2001i2001–53 I.R.B.

Numerical Finding List
1
Bulletins 2001–27 through 2001–52
Announcements:
2001–69, 2001–27 I.R.B.23
2001–70, 2001–27 I.R.B.23
2001–71, 2001–27 I.R.B.26
2001–72, 2001–28 I.R.B.39
2001–73, 2001–28 I.R.B.40
2001–74, 2001–28 I.R.B.40
2001–75, 2001–28 I.R.B.42
2001–76, 2001–29 I.R.B.67
2001–77, 2001–30 I.R.B.83
2001–78, 2001–30 I.R.B.87
2001–79, 2001–31 I.R.B.97
2001–80, 2001–31 I.R.B.98
2001–81, 2001–33 I.R.B.175
2001–82, 2001–32 I.R.B.123
2001–83, 2001–35 I.R.B.205
2001–84, 2001–35 I.R.B.206
2001–85, 2001–36 I.R.B.219
2001–86, 2001–35 I.R.B.207
2001–87, 2001–35 I.R.B.208
2001–88, 2001–36 I.R.B.220
2001–89, 2001–38 I.R.B.291
2001–90, 2001–35 I.R.B.208
2001–91, 2001–36 I.R.B.221
2001–92, 2001–39 I.R.B.301
2001–93, 2001–44 I.R.B.416
2001–94, 2001–39 I.R.B.301
2001–95, 2001–39 I.R.B.303
2001–96, 2001–41 I.R.B.317
2001–97, 2001–40 I.R.B.310
2001–98 2001–41 I.R.B.317
2001–99 2001–42 I.R.B.340
2001–100, 2001–41 I.R.B.317
2001–101, 2001–43 I.R.B.374
2001–102, 2001–42 I.R.B.340
2001–103, 2001–43 I.R.B.375
2001–104, 2001–43 I.R.B.376
2001–105, 2001–43 I.R.B.376
2001–106, 2001–44 I.R.B.416
2001–107, 2001–44 I.R.B.419
2001–108, 2001–44 I.R.B.419
2001–109, 2001–45 I.R.B.485
2001–110, 2001–45 I.R.B.486
2001–111, 2001–45 I.R.B.486
2001–112, 2001–46 I.R.B.494
2001–113, 2001–46 I.R.B.494
2001–114, 2001–47 I.R.B.528
2001–115, 2001–48 I.R.B.539
2001–116, 2001–48 I.R.B.539
2001–117, 2001–49 I.R.B.567
2001–118, 2001–48 I.R.B.540
2001–119, 2001–50 I.R.B.575
2001–120, 2001–50 I.R.B. 583
2001–121, 2001–50 I.R.B.584
2001–122, 2001–51 I.R.B.604
2001–123, 2001–52 I.R.B.629
2001–124, 2001–52 I.R.B.630
Court Decisions:
2070, 2001–31 I.R.B.90
2071, 2001–44 I.R.B.385
2072, 2001–44 I.R.B.379
Notices:
2001–39, 2001–27 I.R.B.3
2001–41, 2001–27 I.R.B.2
2001–42, 2001–30 I.R.B.70
2001–43, 2001–30 I.R.B.72
2001–44, 2001–30 I.R.B.77
2001–45, 2001–33 I.R.B.129
2001–46, 2001–32 I.R.B.122
2001–47, 2001–36 I.R.B.212
2001–48, 2001–33 I.R.B.130
2001–49, 2001–34 I.R.B.188
2001–50, 2001–34 I.R.B.189
2001–51, 2001–34 I.R.B.190
2001–52, 2001–35 I.R.B.203
2001–53, 2001–37 I.R.B.225
2001–54, 2001–37 I.R.B.225
2001–55, 2001–39 I.R.B.299
2001–56, 2001–38 I.R.B.277
2001–57, 2001–38 I.R.B.279
2001–58, 2001–39 I.R.B.299
2001–59, 2001–41 I.R.B.315
2001–60, 2001–40 I.R.B.304
2001–61, 2001–40 I.R.B.305
2001–62, 2001–40 I.R.B.307
2001–63, 2001–40 I.R.B.308
2001–64, 2001–41 I.R.B.316
2001–65, 2001–43 I.R.B.369
2001–66, 2001–44 I.R.B.396
2001–67, 2001–49 I.R.B.544
2001–68, 2001–47 I.R.B.504
2001–69, 2001–46 I.R.B.491
2001–70, 2001–45 I.R.B.437
2001–71, 2001–48 I.R.B.530
2001–72, 2001–49 I.R.B.548
2001–73, 2001–49 I.R.B.549
2001–74, 2001–49 I.R.B.551
2001–75, 2001–51 I.R.B.590
2001–76, 2001–52 I.R.B.613
2001–77, 2001–50 I.R.B.576
2001–78, 2001–50 I.R.B.576
2001–79, 2001–50 I.R.B.576
2001–80, 2001–52 I.R.B.617
2001–81, 2001–52 I.R.B.617
2001–82, 2001–52 I.R.B.619
2001–83, 2001–52 I.R.B.621
Proposed Regulations:
REG–110311–98, 2001–35 I.R.B.204
REG–106917–99, 2001–27 I.R.B.4
REG–103735–00, 2001–35 I.R.B.204
REG–103736–00, 2001–35 I.R.B.204
REG–107151–00, 2001–43 I.R.B.370
REG–100548–01, 2001–29 I.R.B.67
REG–106431–01, 2001–37 I.R.B.272
REG–125161–01, 2001–48 I.R.B.538
Proposed Regulations—Continued
REG–126485–01, 2001–49 I.R.B.555
REG–137519–01, 2001–49 I.R.B.559
REG–142499–01, 2001–45 I.R.B.476
REG–142686–01, 2001–49 I.R.B.561
Railroad Retirement Quarterly Rates:
2001–27, I.R.B.1
2001–41, I.R.B.314
Revenue Procedures:
2001–39, 2001–28 I.R.B.38
2001–40, 2001–33 I.R.B.130
2001–41, 2001–33 I.R.B.173
2001–42, 2001–36 I.R.B.212
2001–43, 2001–34 I.R.B.191
2001–44, 2001–35 I.R.B.203
2001–45, 2001–37 I.R.B.227
2001–46, 2001–37 I.R.B.263
2001–47, 2001–42 I.R.B.332
2001–48, 2001–40 I.R.B.308
2001–49, 2001–39 I.R.B.300
2001–50, 2001–45 I.R.B.437
2001–51, 2001–43 I.R.B.369
2001–52, 2001–46 I.R.B.491
2001–53, 2001–47 I.R.B.506
2001–54, 2001–48 I.R.B.530
2001–55, 2001–49 I.R.B.552
2001–56, 2001–51 I.R.B.590
2001–57, 2001–50 I.R.B.577
2001–58, 2001–50 I.R.B.579
2001–59, 2001–52 I.R.B.623
Revenue Rulings:
2001–30, 2001–29 I.R.B.46
2001–33, 2001–32 I.R.B.118
2001–34, 2001–28 I.R.B.31
2001–35, 2001–29 I.R.B.59
2001–36, 2001–32 I.R.B.119
2001–37, 2001–32 I.R.B.100
2001–38, 2001–33 I.R.B.124
2001–39, 2001–33 I.R.B.125
2001–40, 2001–38 I.R.B.276
2001–41, 2001–35 I.R.B.193
2001–42, 2001–37 I.R.B.223
2001–43, 2001–36 I.R.B.209
2001–44, 2001–37 I.R.B.223
2001–45, 2001–42 I.R.B.323
2001–46, 2001–42 I.R.B.321
2001–47, 2001–39 I.R.B.293
2001–48, 2001–42 I.R.B.324
2001–49, 2001–41 I.R.B.312
2001–50, 2001–43 I.R.B.343
2001–51, 2001–45 I.R.B.427
2001–52, 2001–45 I.R.B.434
2001–53, 2001–46 I.R.B.489
2001–54, 2001–46 I.R.B.490
2001–55, 2001–47 I.R.B.497
2001–56, 2001–47 I.R.B.500
2001–57, 2001–46 I.R.B.488
2001–58, 2001–50 I.R.B.570
1
A cumulative list of all revenue rulings, revenue
procedures, Treasury decisions, etc., published in
Internal Revenue Bulletins 2001–1 through 2001–26 is
in Internal Revenue Bulletin 2001–27, dated July 2, 2001.
2001–53 I.R.BiiDecember 31, 2001

Revenue Rulings—Continued
2001–59, 2001–51 I.R.B.585
2001–60, 2001–51 I.R.B.587
2001–61, 2001–50 I.R.B.573
2001–63, 2001–52 I.R.B.606
Social Security Contribution
and Benefit Base; Domestic
Employee Coverage Threshold:
2001–51 I.R.B.603
Treasury Decisions:
8947, 2001–28 I.R.B.36
8948, 2001–28 I.R.B.27
8949, 2001–28 I.R.B.33
8950, 2001–28 I.R.B.34
8951, 2001–29 I.R.B.63
8952, 2001–29 I.R.B.60
8953, 2001–29 I.R.B.44
8954, 2001–29 I.R.B.47
8955, 2001–32 I.R.B.101
8956, 2001–32 I.R.B.112
8957, 2001–33 I.R.B.125
8958, 2001–34 I.R.B.183
8959, 2001–34 I.R.B.185
8960, 2001–34 I.R.B.176
8961, 2001–35 I.R.B.194
8962, 2001–35 I.R.B.201
8963, 2001–35 I.R.B.197
8964, 2001–42 I.R.B.320
8965, 2001–43 I.R.B.344
8966, 2001–45 I.R.B.422
8967, 2001–50 I.R.B.568
December 31, 2001iii2001–53 I.R.B.

Finding List of Current Actions
on Previously Published Items
1
Bulletins 2001–27 through 2001–52
Announcements:
2000–48
Modified by
Notice 2001–43, 2001–30 I.R.B.72
2001–117
Modified by
Ann. 2001–124, 2001–52 I.R.B.630
Notices:
88–129
Amplified and modified by
Notice 2001–82, 2001–52 I.R.B.619
90–60
Amplified and modified by
Notice 2001–82, 2001–52 I.R.B.619
98–52
Modified by
Notice 2001–56, 2001–38 I.R.B.277
99–41
Modified and superseded by
Notice 2001–62, 2001–40 I.R.B.307
2000–15
Supplemented and superseded by
Notice 2001–51, 2001–34 I.R.B.190
2001–4
Modified by
Notice 2001–43, 2001–30 I.R.B.72
2001–9
Modified by
Notice 2001–46, 2001–32 I.R.B.122
2001–42
Modified by
Notice 2001–57, 2001–38 I.R.B.279
2001–61
Supplemented by
Notice 2001–68, 2001–47 I.R.B.504
2001–70
Clarified and supplemented by
Notice 2001–74, 2001–49 I.R.B.551
Proposed Regulations:
LR–97–79
Withdrawn by
REG–100548–01, 2001–29 I.R.B.67
LR–107–84
Withdrawn by
REG–100548–01, 2001–29 I.R.B.67
Proposed Regulations—Continued
REG–106186–98
Withdrawn by
Ann. 2001–121, 2001–50 I.R.B.584
REG–110311–98
Supplemented by
T.D. 8961, 2001–35 I.R.B.194
REG–106917–99
Corrected by
Ann. 2001–86, 2001–35 I.R.B.207
REG–103735–00
Supplemented by
T.D. 8961, 2001–35 I.R.B.194
REG–103736–00
Supplemented by
T.D. 8961, 2001–35 I.R.B.194
REG–130477–00
Supplemented by
Ann. 2001–82, 2001–32 I.R.B.123
REG–130481–00
Supplemented by
Ann. 2001–82, 2001–32 I.R.B.123
Revenue Procedures:
83–78
Revoked by
Rev. Proc. 2001–49, 2001–39 I.R.B.300
84–84
Revoked by
Rev. Proc. 2001–49, 2001–39 I.R.B.300
90–58
Obsoleted by
Rev. Proc. 2001–58, 2001–50 I.R.B.579
91-52
Obsoleted by
Rev. Proc. 2001–58, 2001–50 I.R.B.579
93–27
Clarified by
Rev. Proc. 2001–43, 2001–34 I.R.B.191
97–13
Modified by
Rev. Proc. 2001–39, 2001–28 I.R.B.38
97–19
Modified by
Notice 2001–62, 2001–40 I.R.B.307
98–44
Superseded by
Rev. Proc. 2001–40, 2001–33 I.R.B.130
Revenue Procedures—Continued
99–27
Superseded by
Rev. Proc. 2001–42, 2001–36 I.R.B.212
99–49
Modified and amplified by
Rev. Proc. 2001–46, 2001–37 I.R.B.263
Rev. Rul. 2001–60, 2001–51 I.R.B.587
2000–19
Superseded by
Rev. Proc. 2001–45 I.R.B.227
2000–20
Modified by
Notice 2001–42, 2001–30 I.R.B.70
Rev. Proc. 2001–55, 2001–49 I.R.B.552
2000–27
Modified by
Rev. Proc. 2001–55, 2001–49 I.R.B.552
2000–28
Superseded by
Rev. Proc. 2001–50, 2001–45 I.R.B.437
2000–39
Corrected by
Ann. 2001–73, 2001–28 I.R.B.40
Superseded by
Rev. Proc. 2001–47, 2001–42 I.R.B.332
2000–48
Superseded by
Rev. Proc. 2001–54, 2001-48 I.R.B.530
2001–2
Modified by
Rev. Proc. 2001–41, 2001–33 I.R.B.173
2001–3
Modified by
Rev. Proc. 2001–51, 2001–43 I.R.B.369
2001–6
Modified by
Notice 2001–42, 2001–30 I.R.B.70
Rev. Proc. 2001–55, 2001–49 I.R.B.552
Revenue Rulings:
55–290
Modified and superseded by
Rev. Rul. 2001–60, 2001–51 I.R.B.587
57–589
Obsoleted by
REG–106917–99, 2001–27 I.R.B.4
65–316
Obsoleted by
REG–106917–99, 2001–27 I.R.B.4
67–274
Amplified by
Rev. Rul. 2001–46, 2001–42 I.R.B.321
1
A cumulative list of current actions on previously published
items in Internal Revenue Bulletins 2001–1 through 2001–26 is
in Internal Revenue Bulletin 2001–27, dated July 2, 2001.
2001–53 I.R.BivDecember 31, 2001

Revenue Rulings—Continued
68–125
Obsoleted by
REG–106917–99, 2001–27 I.R.B.4
69–563
Obsoleted by
REG–106917–99, 2001–27 I.R.B.4
70–379
Obsoleted by
Rev. Rul. 2001–39, 2001–33 I.R.B.125
74–326
Obsoleted by
REG–106917–99, 2001–27 I.R.B.4
78–127
Modified by
Rev. Rul. 2001–40, 2001–38 I.R.B.276
78–179
Obsoleted by
REG–106917–99, 2001–27 I.R.B.4
89–42
Modified and superseded by
Rev. Rul. 2001–48, 2001–42 I.R.B.324
90–95
Distinguished by
Rev. Rul. 2001–46, 2001–42 I.R.B.321
92–19
Supplemented by
Rev. Rul. 2001–38, 2001–33 I.R.B.124
97–31
Modified and superseded by
Rev. Rul. 2001–48, 2001–42 I.R.B.324
98–1
Modified by
Rev. Rul. 2001–51, 2001–45 I.R.B.427
Treasury Decisions:
8948
Corrected by
Ann. 2001–90, 2001–35 I.R.B.208
December 31, 2001v2001–53 I.R.B.