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TITLE 26-INTERNAL REVENUE CODE (c) Exception In the case of a taxpayer who uses an accrual method of accounting, subsection (a) shall not apply to a debt which accrued as a receivable on a bona fide sale of goods or services in the ordinary course of the taxpayer's trade or busi- ness if- (1) for the taxable year in which such re- ceivable accrued, more than 30 percent of all receivables which accrued in the ordinary course of the trades and businesses of the taxpayer were due from political parties, and (2) the taxpayer made substantial continu- ing efforts to collect on the debt. (Aug. 16, 1954, ch. 736, 68A Stat. 82; Oct. 4, 1976, Pub. L. 94-455, title XXI, § 2104(a), 90 Stat. 1901.) AMENDMENTS 1976-Subsec. (c). Pub. L. 94-455 added subsec. (c). EFFECTIVE DATE OF 1976 AMENDMENT Section 2104(b) oi Pub. L. 94-455 provided that: "The amendment made by subsection (a) [enacting subsec. (c) of this section] shall apply to taxable years beginning after December 31, 197t." SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 166, 276, 527 of this title. § 272. Disposal of coal or domestic iron ore Where the disposal of coal or iron ore is cov- ered by section 631, no deduction shall be al- lowed for expenditures attributable to the making and administering of the contract under which such disposition occurs and to the preservation of the economic interest retained under such contract, except that if in any tax- able year such expenditures plus the adjusted depletion basis of the coal or iron ore disposed of in such taxable year exceed the amount real- ized under such contract, such excess, to the extent not availed of as a reduction of gain under section 1231, shall be a loss deductible under section 165(a). This section shall not apply to any taxable year during which there is no income under the contract. (Aug. 16, 1954, ch. 736, 68A Stat. 82; Feb. 26, 1964, Pub. L. 88-272, title II, § 227(a)(3), (b)(3), 78 Stat. 98.) AMENDMENTS 1964-Pub. L. 88-272 inserted "or domestic iron ore" in the section catchline, and "or iron ore" wherever appearing in the text. EFFECTIVE DATE OF 1964 AMENDMENT Section 227(c) of Pub. L. 88-272 provided that: "The amendments made by this section (to sections 272, 631, 1016, 1231, and 1402, and to the analysis preced- ing sections 261 and 631 of this title, and to section 411 of Title 42, Public Health and Welfare] shall apply with respect to amounts received or accrued in taxablk years beginning after December 31, 1963, attributable to iron ore mined in such taxable years." CROSS REFERENCES Adjustment to basis for deductions disallowed under this section, see section 1016 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 631, 1016 of this title. § 273. llolders of life or terminable interest Amounts paid under the laws of a State, the District of Columbia, a possession of the United States, or a foreign country as income to the holder of a life or terminable interest acquired by gift, bequest, or inheritance shall not be re- duced or diminished by any deduction for shrinkage (by whatever name called) in the value of such interest due to the lapse of time. (Aug. 16, 1954, ch. 736, 68A Stat. 83; Oct. 4, 1976, Pub. L. 94-455, title XIX, § 1901(c)(2), 90 Stat. 1803.) AMENDMENTS 1976-Pub. L. 94-455 struck out reference to amounts paid under laws of a Territory. EFFECTIVE DATE OF 1976 AMENDMENTS Amendment by section 1901(c) of Pub. L. 94-455 ef- fective for taxable years beginning after Dec. 31, 197G, see section 1901(d) of Pub. L. 94-455, set out as an Ef- fective Date of 1976 Amendment note under section 2 of this title. § 274. Disallowance of certain entertainment, etc., ex- penses (a) Entertainment, amusement, or recreation (1) In general No deduction otherwise allowable under this chapter shall be allowed for any item- (A) Activity With respect to an activity which is of a type generally considered to constitute en- tertainment, amusement, or recreation, unless the taxpayer establishes that the item was directly related to, or, in the case of an item directly preceding or following a substantial and bona fide business discus- sion (including business meetings at a con- vention or otherwise), that such item was associated with, the active conduct of the taxpayer's trade or business, or (B) Facility With respect to a facility used in connec- tion with an activity referred to .in subpara- graph (A), unless the taxpayer establishes that the facility was used primarily for the furtherance of the taxpayer's trade or busi- ness and that the item was directly related to the active conduct of such trade or busi- ness, and such deduction shall in no event exceed the portion of such item directly related to, or, in the case of an item described in subpar- agraph (A) directly preceding or following a substantial and bona fide business discussion (including business meetings at a convention or otherwise), the portion of such item associ- ated with, the active conduct of the taxpay- er's trade or business. (2) Special rules For purposes of applying paragraph (1)- (A) Dues or fees to any social, athletic, or sporting club or organization shall be treat- ed as items with respect to facilities. Page 217