601.95 Termination of requirements.

If FDA determines after approval under this subpart that the requirements established in §§ 601.91(b)(2), 601.92, and 601.93 are no longer necessary for the safe and effective use of a biological product, FDA will so notify the applicant. Ordinarily, for biological products approved under § 601.91, these requirements will no longer apply when FDA determines that the postmarketing study verifies and describes the biological product’s clinical benefit. For biological products approved under § 601.91, the restrictions would no longer apply when FDA determines that safe use of the biological product can be ensured through appropriate labeling. FDA also retains the discretion to remove specific postapproval requirements upon review of a petition submitted by the sponsor in accordance with § 10.30 of this chapter.

Dated: May 23, 2002.

Lester M. Crawford,

Deputy Commissioner.

[FR Doc. 02-13583 Filed 5-30-02; 8:45 am]





Internal Revenue Service

26 CFR Part 1

[TD 8998]

RIN 1545-BA74

Loss Limitation Rules

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Temporary regulations.


SUMMARY: This document contains amendments to temporary regulations issued under sections 337(d) and 1502. The amendments clarify certain aspects of the temporary regulations relating to the deductibility of losses recognized on dispositions of subsidiary stock by members of a consolidated group. The amendments in these temporary regulations apply to corporations filing consolidated returns, both during and after the period of affiliation, and also affect purchasers of the stock of members of a consolidated group. The text of these temporary regulations also serves as the text of the proposed regulations set forth in the notice of proposed rulemaking on this subject in the Proposed Rules section in this issue of the Federal Register.

DATES: Effective Date: These regulations are effective May 31, 2002.

Applicability Date: For dates of applicability see § 1.337(d)-2T(g) and 1.1502—20T(i).


Sean P. Duffley (202) 622-7530 or Lola L. Johnson (202) 622-7550 (not toll-free numbers).


Paperwork Reduction Act

The collection of information contained in these regulations has been previously reviewed and approved by the Office of Management and Budget under control number 1545—1774. Responses to this collection of information are voluntary. No material changes to this collection of information are made by these regulations.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the Office of Management and Budget.

Books or records relating to the collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.


On March 12, 2002, the IRS and Treasury published in the Federal Register at 67 FR 11034 (2002-13 I.R.B. 668) temporary regulations under sections 337(d) and 1502 (the temporary regulations). The temporary regulations set forth rules that limit the deductibility of loss recognized by a consolidated group on the disposition of stock of a subsidiary member and that require certain basis reductions on the deconsolidation of stock of a subsidiary member. Section 1.1502-20T(i) of the temporary regulations provides that, in the case of a disposition or deconsolidation of a subsidiary before March 7, 2002, and for such transactions effected pursuant to a binding written contract entered into before March 7, 2002, that was in continuous effect until the disposition or deconsolidation, a consolidated group may determine the amount of allowable stock loss or basis reduction by applying § 1.1502—20 in its entirety, § 1.1502-20 without regard to the duplicated loss component of the loss disallowance rule, or § 1.337(d)-2T. For dispositions and deconsolidations that occur on or after March 7, 2002, and that are not within the scope of the binding contract rule, § 1.1502-20T(i) provides that allowable loss and basis reduction are determined under § 1.337(d)-2T, not § 1.1502-20.

Explanation of Provisions

Since the publication of the temporary regulations, several questions have been raised concerning the interpretation and application of the temporary regulations. In response to these questions, the IRS and Treasury are promulgating the regulations in this Treasury decision as temporary regulations to clarify and amend the temporary regulations as described below in this preamble. The following paragraphs describe these amendments.

Netting Rule

Commentators requested that § 1.337(d)-2T be amended to provide a netting rule similar to that set forth in § 1.1502—20(a)(4), pursuant to which gain and loss from certain dispositions of stock may be netted. This Treasury decision adds § 1.337(d)-2T(a)(4) to provide such a rule and also adds § 1.337(d)-2T(b)(4), which provides a similar netting rule for basis reductions on deconsolidations of subsidiary stock.

Time For Filing Election Described in § 1.1502-20T(i)

Section 1.1502-20T(i) currently provides that an election to determine allowable loss by applying § 1.1502—20 (without regard to the duplicated loss component of the loss disallowance rule) or § 1.337(d)-2T must be made by including a statement with or as part of the original return for the taxable year that includes the later of March 7, 2002, and the date of the disposition or deconsolidation of the stock of the subsidiary, or with or as part of an amended return filed before the date the original return for the taxable year that includes March 7, 2002, is due. Commentators noted that this provision may not permit the election to be made on an original return for the 2001 taxable year where the disposition occurs during the 2001 taxable year. The IRS and Treasury believe that it is appropriate to permit the election to be made on such a return. Therefore, this Treasury decision amends § 1.1502— 20T(i) to provide that the statement may be filed with or as part of a timely filed (including any extensions) original return for any taxable year that includes any date on or before March 7, 2002. In addition, if the date of the disposition or deconsolidation of the stock of the subsidiary is after March 7, 2002, the statement may be filed with or as part of a timely filed (including any extensions) original return for the taxable year that includes such date. This latter alternative effectively permits the statement to be filed with the original return that includes the date



1An example of a drug approval based on human surrogate markers is our August 30, 2000, approval of an efficacy supplement for ciprofloxacin. Ciprofloxacin HCl was approved for postexposure management of inlialational anthrax. The approval was based, in part, on human studies demonstrating that ciprofloxacin achieved serum concentrations reaching or exceeding levels associated with improved survival of animals exposed to aerosolized Bacillus anthracis spores. The results from these studies were combined with the knowledge of effectiveness in humans of ciprofloxacin for other bacterial infections, including pneumonia. The validity of the human surrogate marker was supported by animal studies.

2In some cases, however, such as with anti- infective drug products, it would usually be expected that human data on safety and effectiveness for other indications may be available.

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