PUBLIC LAW 98-369—JULY 18, 1984 with respect to the pass-thru entity (or a predecessor), and "(ii) which ends with the first taxable year after the taxable year referred to in clause (i) for which the ownership test of subparagraph (C) is not met and with respect to which the Secretary consents to the termination of the required accrual period. "(C) OWNERSHIP TEST.—The ownership test of this subparagraph is met for any taxable year if, on at least 90 days during the taxable year, 20 percent or more of the value of the interests in the pass-thru entity are held by persons described in paragraph (1) or by other pass-thru entities to which subparagraph (A) applies. "(D) PASS-THRU ENTITY.—The term 'pass-thru entity' means any partnership, S corporation, trust, or other passthru entity.
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98 STAT. 549
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"(c) CROSS REFERENCE.— "For special rules limitinf^ the application of this section to ori^^inal issue discount in the case of nonj^overnmental obli^^ations, see section 1283(c). "SEC. 1282. DEFERRAL OF INTEREST DEDUCTION ALLOCABLE TO ACCRUED DISCOUNT.
26 USC 1282.
"(a) GENERAL RULE.—Except as otherwise provided in this section, the net direct interest expense with respect to any short-term obligation shall be allowed as a deduction for the taxable year only to the extent that such expense exceeds the sum of the daily portions of the acquisition discount for each day during the taxable year on which the taxpayer held such obligation. "(b) SECTION NOT TO APPLY TO OBLIGATIONS TO WHICH SECTION 1281 APPLIES.—
Ante, p. 548.
"(1) IN GENERAL.—This section shall not apply to any shortterm obligation to which section 1281 applies. "(2) ELECTION TIONS.—
TO H A V E S E C T I O N
1 2 8 1 A P P L Y TO A L L OBLIGA-
"(A) IN GENERAL.—A taxpayer may make an election under this paragraph to have section 1281 apply to all short-term obligations acquired by the taxpayer on or after the 1st day of the 1st taxable year to which such election applies. ,Hr
"(B)
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PERIOD TO WHICH ELECTION APPLIES.—An election
under this paragraph shall apply to the taxable year for which it is made and for all subsequent taxable years, unless the taxpayer secures the consent of the Secretary to the revocation of such election. "(c) CERTAIN RULES MADE APPLICABLE.—Rules similar to the rules of subsections (b) and (c) of section 1277 shall apply for purposes of this section.
Ante, p. 545.
"(d) CROSS REFERENCE.— "For special rules limiting the application of this section to original issue discount in the case of nongovernmental obligations, see section 1283(c). "SEC. 1283. DEFINITIONS AND SPECIAL RULES.
"(a) DEFINITIONS.—For purposes of this subpart— "(1) SHORT-TERM OBLIGATION.—
26 USC 1283.
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