123STA T . 3 40PUBLIC LA W 111 –5—FE B.1 7, 200 9‘ ‘ (I I )includesth e amo unt o f income to w hich p a r a g raph ( 1 ) applies and such other information as the S ecretar y may prescri b e . ‘‘(ii) ELECTION I R RE V OC AB LE. — Such election , once made, is irre v ocable. ‘‘(iii) P A S S - T H R U ENTITIES.—In the case of a part- nership, S corporation, or other pass-thru entity, the election under this subsection shall be made by the partnership, the S corporation, or other entity involved. ‘‘( C ) COOR D INATION W ITH OTHER E X CLUSIONS.—If a ta x - payer elects to have this subsection apply to an applicable debt instrument, subparagraphs ( A ),( B ), (C), and ( D )of subsection (a)(1) shall not apply to the income from the discharge of such indebtedness for the taxable year of the election or any subse q uent taxable year. ‘‘(D) ACCELERATION O F DEFERRED ITE M S.— ‘‘(i) IN G ENERAL.—In the case of the death of the taxpayer, the liquidation or sale of substantially all the assets of the taxpayer (including in a title 11 or similar case), the cessation of business by the tax- payer, or similar circumstances, any item of income or deduction which is deferred under this subsection (and has not previously been ta k en into account) shall be taken into account in the taxable year in which such event occurs (or in the case of a title 11 or similar case, the day before the petition is filed). ‘‘(ii) S P ECIAL RULE FOR PASS-THRU ENTITIES.— T he rule of clause (i) shall also apply in the case of the sale or exchange or redemption of an interest in a partnership, S corporation, or other pass- thru entity by a partner, shareholder, or other person holding an ownership interest in such entity. ‘‘( 6 ) SPECIAL RULE FOR PARTNERSHIPS.—In the case of a partnership, any income deferred under this subsection shall be allocated to the partners in the partnership immediately before the discharge in the manner such amounts would have been included in the distributive shares of such partners under section 704 if such income were recogni z ed at such time. Any decrease in a partner ’ s share of partnership liabilities as a result of such discharge shall not be taken into account for purposes of section 7 52 at the time of the discharge to the extent it would cause the partner to recognize gain under section 7 3 1. Any decrease in partnership liabilities deferred under the preceding sentence shall be taken into account by such partner at the same time, and to the extent remaining in the same amount, as income deferred under this subsection is recognized. ‘‘(7) SECRETARIAL AUTHORIT Y .—The Secretary may pre- scribe such regulations, rules, or other guidance as may be necessary or appropriate for purposes of applying this sub- section, including— ‘‘(A) extending the application of the rules of paragraph (5)(D) to other circumstances where appropriate, ‘‘(B) requiring reporting of the election (and such other information as the Secretary may require) on returns of tax for subsequent taxable years, and Ap p licab ili ty.
