To amend the Internal Revenue Code of 1986 to provide an election of deduction in lieu of a basis increase where indebtedness secured by property has original issue discount and is held by a cash method taxpayer.

Amends the Internal Revenue Code with respect to certain reacquisitions of real property to allow an election of deduction in lieu of basis increase where indebtedness secured by property has original issue discount and is held by a cash method taxpayer.