short-term obligations held by: (i) accrual-method holders; (ii) banks; and (iii) regulated investment companies and common trust funds. • In addition, IRC §1281 applies to any short-term obligation (i) held primarily for sale to customers in the ordinary course of the taxpayer’s trade or business; (ii) identified as part of a hedging transaction, or (iii) which is a stripped bond or coupon held by the person who stripped the bond or coupon. Finally special rules apply to partnerships, S corporations, trusts, and other pass-through entities.