Rev. Rul. 89-86A,

1989-2 C.B. 276, 1989-29 I.R.B. 5.

                       Internal Revenue Service

                                 Revenue Ruling

                            Published: July 17, 1989

Section 7872. -- Treatment of Loans with Below-Market Interest Rates

  Rev. Rul. 89-86, 1989-27 I.R.B. 8, which sets forth the applicable federal rates and various other rates for July 1989, did not contain the blended annual rate for purposes of section 7872(e)(2) of the Internal Revenue Code. In Rev. Rul. 86-17, 1986-1 C.B. 377, the Internal Revenue Service stated the blended annual rate would be published annually with the applicable federal rates for July. The omitted blended annual rate is 8.94 percent.

  Rev. Rul. 89-86 is modified by adding table 6 which contains the blended annual rate for 1989 for purposes of section 7872(e)(2) of the Code.

REV. RUL. 89-86 TABLE 6

  Section 7872(e)(2) blended annual rate for 1989       8.94%

  Rev. Rul. 89-86 will incorporate this modification when it is published in the cumulative bulletin.

EFFECT OF OTHER DOCUMENTS

  Rev. Rul. 89-86 is modified.

Rev. Rul. 89-86A, 1989-2 C.B. 276, 1989-29 I.R.B. 5.