Instructions For Form 8900 - Qualified Railroad Track Maintenance Credit

2016

Department of the Treasury

Internal Revenue Service

Instructions for Form 8900

Qualified Railroad Track Maintenance Credit

Section references are to the Internal Revenue Code unless

Railroad-related services. Railroad-related services are

otherwise noted.

services that are provided directly to, and are unique to, a

railroad and that relate to railroad shipping, loading and

General Instructions

unloading of railroad freight, or repairs of rail facilities or

railroad-related property. For examples of what are and what are

Future Developments

not railroad-related services, see Regulations section

1.45G-1(b)(8).

For the latest information about developments related to Form

Eligible railroad track. Eligible railroad track is railroad track

8900 and its instructions, such as legislation enacted after they

located within the United States that is owned or leased by a

were published, go to

Class II or Class III railroad at the close of its tax year. The

Who Must File

railroad is treated as owning the railroad track if it is subject to

depreciation under section 167 by the railroad. Double track is

Eligible taxpayers use Form 8900 to claim the railroad track

treated as multiple lines of railroad track, rather than as a single

maintenance credit (RTMC) for qualified railroad track

line of railroad track. That is, one mile of single track is one mile,

maintenance expenditures (QRTME) paid or incurred during the

but one mile of double track is two miles.

tax year. If you are an assignor of miles of eligible railroad track,

you must file Form 8900 even if you do not claim any RTMC.

Qualifying railroad structure. Qualifying railroad structure is

See the instructions for line 3b for the additional information that

property located within the United States that includes, in part,

must be provided by assignors.

tunnels, bridges, and railroad track. For a complete description,

see Regulations section 1.45G-1(b)(4).

Partnerships and S corporations must file this form to claim

the credit. All other taxpayers are not required to complete or file

Qualified railroad track maintenance expenditures

this form if their only source for this credit is a partnership or S

(QRTME). QRTME are expenditures (whether or not otherwise

corporation. Instead, they can report this credit directly on line 4g

chargeable to a capital account) for maintaining, repairing, and

in Part III of Form 3800, General Business Credit.

improving a qualifying railroad structure that is owned or leased

as of January 1, 2015, by a Class II or Class III railroad. If you

Definitions

paid or incurred QRTME during the tax year, you do not have to

reduce that QRTME by any amount of direct or indirect

Eligible taxpayers. Eligible taxpayers include the following.

reimbursement to which you are entitled from a Class II or Class

1. Any Class II or Class III railroad, as these terms are

III railroad which made an assignment of eligible railroad track to

defined by the Surface Transportation Board.

you.

2. Any person (including a Class I railroad (see below)) who

Adjustments to Basis

transports property using the rail facilities of a Class II or Class III

railroad.

Some or all of the QRTME paid or incurred by an eligible

taxpayer may be required to be capitalized as a tangible asset or

3. Any person (including a Class I railroad (see below)) who

an intangible asset, if applicable. See Regulations section

furnishes railroad-related services or property to a Class II or

1.45G-1(e)(1).

Class III railroad.

Use the amount of RTMC to reduce the basis of a qualifying

For purposes of (2) or (3) above, the taxpayer is only eligible

railroad structure (including railroad track) asset or intangible

to claim the credit for miles of eligible railroad track assigned to it

asset, if applicable. The reduction is limited to the amount of

by a Class II or Class III railroad for purposes of the credit. See

QRTME capitalized for the asset. For further details, see

the instructions for line 3c.

Regulations section 1.45G-1(e)(2).

Class I railroads include only the following seven entities.

Member of Controlled Group or

BNSF.

CSX.

Business Under Common Control

Grand Trunk Corporation (a holding company for all of

Canadian National's U.S. railroad operations).

For purposes of figuring the credit, all members of a “controlled

Kansas City Southern.

group of corporations” and all members of a “group of

Norfolk Southern.

businesses under common control” are treated as a single

Soo Line (owned by Canadian Pacific).

taxpayer. See Regulations section 1.45G-1(f)(2) for a definition

Union Pacific.

of these terms. As a member, your credit is determined on a

proportionate basis to your share of the aggregate QRTME

Rail facilities. Rail facilities of a Class II or Class III railroad are

taken into account by the group for the RTMC. Enter your share

railroad yards, tracks, bridges, tunnels, wharves, docks,

of the credit on line 5. Attach a statement showing how your

stations, and other related assets that are used in the transport

share of the credit was figured, and write “See Attached” next to

of freight by a railroad and owned or leased by that railroad.

the entry space for line 5.

Railroad-related property. Railroad-related property is

property that is provided directly to a Class II or Class III railroad

and is unique to railroads. For a complete description, see

Regulations section 1.45G-1(b)(7).

Dec 07, 2016

Cat. No. 66497D

Instructions For Form 8900 - Qualified Railroad Track Maintenance Credit - 2016

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