SEC Form 4
FORM 4 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940
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 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
1. Name and Address of Reporting Person*
GROSS WILLIAM H
(Last) (First) (Middle)
C/O PIMCO
840 NEWPORT CENTER DRIVE, SUITE 100
(Street)
NEWPORT BEACH CA 92660
(City) (State) (Zip)
2. Issuer Name and Ticker or Trading Symbol
PIMCO INCOME STRATEGY FUND [ PFL ] 		5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
Director 10% Owner
Officer (give title below) X Other (specify below)
See Remarks
3. Date of Earliest Transaction (Month/Day/Year)
04/08/2010
4. If Amendment, Date of Original Filed (Month/Day/Year)
 6. Individual or Joint/Group Filing (Check Applicable Line)
X Form filed by One Reporting Person
Form filed by More than One Reporting Person
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4)
Code V Amount (A) or (D) Price
Common Stock 04/08/2010 X 25,116 A (1) 100,466 D
Common Stock 04/08/2010 J 1,000,000(2) A (3) 1,100,466 D
Common Stock 3,726 I By Spouse
Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 6. Date Exercisable and Expiration Date (Month/Day/Year) 7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Subscription Rights (Right to Buy) $10.77(1) 04/08/2010 X 75,350(4) 03/24/2010 04/23/2010 Common Stock 25,116(4) $0 0 D
Explanation of Responses:
1. The subscription price will be determined based upon a formula equal to 90% of the average of the last reported sale prices of the Issuer's common shares on the NYSE on April 23, 2010 (the "Expiration Date") and on each of the four preceding trading days (the "Formula Price"). If, however, the Formula Price is less than 80% of the Issuer's net asset value per common share on the Expiration Date, then the subscription price will be 80% of the Issuer's net asset value per common share on that day. Rights holders may not know the subscription price at the time of exercise and will be required initially to pay for both the common shares subscribed for pursuant to the primary subscription and, if eligible, any additional common shares subscribed for pursuant to the over-subscription privilege at the estimated subscription price of $10.77 per common share.
2. Represents 1,000,000 shares subscribed for by the Reporting Person pursuant to an over-subscription privilege under the rights offering referenced herein. Shareholders as of the rights offering's record date ("Record Date Shareholders") who exercised all rights issued to them were entitled to subscribe for additional common shares at the subscription price. If sufficient common shares are not available to honor all over-subscription requests, available common shares will be allocated pro rata among the Record Date Shareholders who over-subscribe, based on the number of rights issued to them by the Issuer on the record date.
3. Record Date Shareholders who exercise all rights issued to them (other than those rights that cannot be exercised because they represent the right to acquire less than one share) are entitled to subscribe for additional shares at the same subscription price pursuant to the over-subscription privilege, subject to certain limitations and subject to allotment as noted in Footnote 2.
4. The subscription rights entitle the holder to purchase one new common share for every three rights held (1-for-3).
Remarks:
Mr. Gross is Portfolio Manager of the Issuer. Mr. Gross is the Co-Chief Information Officer of Pacific Investment Management Company LLC (PIMCO) and is a member of PIMCO's Executive Committee. PIMCO serves as sub-adviser for the Issuer.
/s/ Michael Flaherty, Attorney-in-Fact for William H. Gross 04/08/2010
** Signature of Reporting Person Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB Number.