Bulletin No. 2003–22 June 2, 2003

Rev. Rul. 2003–58, page 959. Medical expenses. This ruling holds that amounts paid by an individual for medicines that may be purchased without a prescription of a physician are not deductible under section 213 of the Code, but amounts paid by an individual for equipment, supplies, or diagnostic devices that may be purchased without a prescription of a physician may be deductible under section 213.

T.D. 9057, page 964. REG–152524–02, page 979. A corporation that files a consolidated return that acquires a subsidiary may elect to waive all or a portion of that subsidiary’s loss carryovers from a separate return limitation year. Waived loss carryovers are deemed to have expired. Generally, such an election is irrevocable. Temporary and proposed regulations under section 1502 of the Code provide guidance on when a corporation may make a limited amendment to a previous election to waive these loss carryovers. In addition, these regulations permit a selling group to reapportion separate, subgroup, and consolidated section 382 limitations so that an acquiring group may use the loss carryovers that are no longer subject to the previous election. A public hearing on the proposed regulations is scheduled for August 6, 2003.

T.D. 9058, page 962. Final regulations under section 817A of the Code affect insurance companies that define the interest rate to be used with respect to certain insurance contracts that guarantee higher returns for an initial, temporary period. Notice 97–32 revoked.

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REG–164754–01, page 975. Proposed regulations under section 61 of the Code provide guidance for federal income, gift, and employment tax purposes on the valuation of economic benefits provided under a split-dollar life insurance arrangement. The regulations supplement proposed regulations published in the Federal Register on July 9, 2002 (REG–164754–01, 2002–30 I.R.B. 212) that provide comprehensive guidance on split-dollar life insurance arrangements for federal income, gift, and employment tax purposes. A public hearing is scheduled for July 29, 2003.

Notice 2003–28, page 971. This notice clarifies that an Indian Tribal Government (ITG) or an organization an ITG has authorized to place Indian children is an authorized placement agency for purposes of section 32(c)(3)(B)(iii).

Rev. Proc. 2003–39, page 971. Like-kind exchanges; LKE programs. Safe harbor rules are provided under section 1031 of the Code, which allows for deferral of gain realized on a like-kind exchange of property, with respect to programs involving ongoing exchanges of tangible personal property using a single intermediary (“LKE Programs”).

June 2, 2003 2003–22 I.R.B.