26 U.S.C. § 1282: Deferral of interest deduction allocable to accrued discount

the daily portions of the acquisition discount for each day during the taxable year on which the taxpayer held such obligation, and 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). This section shall not apply to any short-term obligation to which section 1281 applies. 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. 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. Rules similar to the rules of subsections (b) and (c) of section 1277 shall apply for purposes of this section. For special rules limiting the application of this section to original issue discount in the case of nongovernmental obligations, see section 1283(c).