View all text of Subpart C [§ 1281 - § 1283]
§ 1282. Deferral of interest deduction allocable to accrued discount
(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 such expense exceeds the sum of—
(1) the daily portions of the acquisition discount for each day during the taxable year on which the taxpayer held such obligation, and
(2) the amount of any interest payable on the obligation (other than interest taken into account in determining the amount of the acquisition discount) which accrues during the taxable year while the taxpayer held such obligation (and is not included in the gross income of the taxpayer for such taxable year by reason of the taxpayer’s method of accounting).
(b) Section not to apply to obligations to which section 1281 applies
(1) In general
(2) Election to have section 1281 apply to all obligations
(A) In general
(B) Period to which election applies
(c) Certain rules made applicable
(d) Cross reference
(Added Pub. L. 98–369, div. A, title I, § 41(a), July 18, 1984, 98 Stat. 549; amended Pub. L. 99–514, title XVIII, § 1803(a)(8)(B), Oct. 22, 1986, 100 Stat. 2794.)