<PAGE> PAGE 1
000 A000000 12/31/1999
000 C000000 0000852244
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001 A000000 THE PRIMARY INCOME FUNDS, INC.
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<PAGE> PAGE 2
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008 A00AA01 ARNOLD INVESTMENT COUNSEL INCORPORATED
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<PAGE> PAGE 3
008 D03AA01 53202
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010 A00AA01 SUNSTONE FINANCIAL GROUP, INC
010 B00AA01 84-5792
010 C01AA01 MILWAUKEE
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012 A00AA01 FIRSTAR MUTUAL FUND SERVICES, LLC
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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<PAGE> PAGE 6
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<PAGE> PAGE 7
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<PAGE> PAGE 8
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<PAGE> PAGE 9
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<PAGE> PAGE 10
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<PAGE> PAGE 11
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<PAGE> PAGE 12
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<PAGE> PAGE 13
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<PAGE> PAGE 14
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SIGNATURE JIM ARNOLD
TITLE ADMINISTRATOR
<TABLE> <S> <C>
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<CIK> 0000852244
<NAME> THE PRIMARY INCOME FUNDS, INC.
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<NAME> THE PRIMARY U.S. GOVERNMENT FUND
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</TABLE>
Exhibit to Accompany
Item 77J
Form N-SAR
The Primary Funds, Inc.
( the "Fund")
According to the provisions of Statement of Position 93 - 2 (SOP 93 - 2)
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment
Companies," the Fund is required to report the accumulated net investment
income (loss) and accumulated net capital gain (loss) accounts to
approximate amounts available for future distributions on a tax basis (or to
offset future realized capital gains).
Accordingly, at December 31, 1999, reclassifications were recorded to decrease
paid in capital and increase undistributed net investment income by $18
for the Primary U.S. Government Securities Fund; to decrease undistributed net
investment income by $11, decrease paid in capital by $1 and increase
undistributed net realized gain on investments by $12 for the Primary Income
Fund.
These reclassifications have no impact on the net asset value of the Fund and
are designed to present the Fund's capital accounts on a tax basis.
