OMB No. 1545-1983 Qualified Railroad Track Maintenance Credit Form 8900

© Attach to your tax return. Department of the Treasury

Internal Revenue Service

Attachment

Sequence No. 144

Name(s) shown on return Identifying number

1

1

2 2

5

4

6

7

Form 8900 (Rev. 12-2006)

Qualified railroad track maintenance expenditures paid or incurred

(see instructions)

3a

Qualified railroad track maintenance credit from partnerships and S corporations

7 Add lines 5 and 6. Partnerships and S corporations, report this amount on Schedule K;

all others, report the credit on the applicable line of Form 3800 (e.g., line 1o of the 2006

Form 3800)

3a

Cat. No. 37708X

Enter 50% (.50) of line 1

Number of miles of railroad track owned or leased by you (see

instructions)

Multiply line 3d by $3,500

6

For Paperwork Reduction Act Notice, see back of form.

5 Enter the smaller of line 2 or line 4

4

b Less: number of miles of railroad track owned or leased by you and

assigned to other eligible taxpayers for purposes of this credit. See

instructions for more information, including required statement

d Total. Combine lines 3a through 3c ©

3b

3d

c Number of miles of railroad track assigned to you by the owner or

lessee for purposes of this credit. See instructions for more

information, including required statement 3c

( )

(Rev. December 2006)

General Instructions

Section references are to the Internal Revenue Code unless

otherwise noted.

● The tax liability limit is no longer figured on this form. Instead, it

must be figured on Form 3800, General Business Credit.

● Taxpayers that are not partnerships or S corporations, and whose

only source of this credit is from those pass-through entities, are not

required to complete or file this form. Instead, they can report this

credit directly on line 1o of the 2006 version of Form 3800.

● The IRS will revise this December 2006 version of the form only

when necessary. Continue to use this version for tax years beginning

after 2005 until a new revision is issued.

What’s New

● For tax years ending after September 6, 2006, assignors and

assignees are required to provide additional information. See the

instructions for line 3b and line 3c.

Who Must File

Eligible taxpayers use Form 8900 to claim the railroad track

maintenance credit (RTMC) with respect to qualified railroad track

maintenance expenditures (QRTME) paid or incurred during the tax

year. If you are an assignor with respect to miles of eligible railroad

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

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

must be provided by assignors.

Definitions

Eligible taxpayers include:

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

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

railroad.

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

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

III railroad.

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

the Surface Transportation Board (STB).

For purposes of 2 or 3 above, the taxpayer is only eligible to claim

the credit with respect to miles of eligible railroad track assigned to it

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

instructions for line 3c.

Class I railroads include only the following seven entities:

● BNSF,

● CSX,

● Grand Trunk Corporation (a holding company for all of Canadian

National’s U.S. railroad operations),

● Kansas City Southern,

● Norfolk Southern,

● Soo Line (owned by Canadian Pacific), and

● Union Pacific.

Rail facilities of a Class II or Class III railroad are railroad yards,

tracks, bridges, tunnels, wharves, docks, stations, and other related

assets that are used in the transport of freight by a railroad and

owned or leased by that railroad.

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 Temporary Regulations section

1.45G-1T(b)(7).

Railroad-related services are services that are provided directly to,

and are unique to, a railroad and that relate to railroad shipping,

loading and unloading of railroad freight, or repairs of rail facilities or

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

not, railroad-related services, see Temporary Regulations section

1.45G-1T(b)(8).
Form 8900 (Rev. 12-2006) Page 2

Specific Instructions

Figure the current year credit from your trade or business on lines 1

through 5. Skip lines 1 through 5 if you are only claiming a credit

that was allocated to you from an S corporation or partnership.

Line 1

Qualified railroad track maintenance expenditures must be paid or

incurred by an eligible taxpayer during the tax year.

You must reduce on line 3b the number of miles of eligible

railroad track entered on line 3a that you assigned to another eligible

taxpayer for purposes of the credit computation. You can only

assign each mile of railroad track once during your tax year. Each

mile of railroad track that you assign is treated as being assigned on

the last day of your tax year.

Line 3c

Adjustments to Basis

Paperwork Reduction Act Notice. We ask for the information on

this form to carry out the Internal Revenue laws of the United States.

You are required to give us the information. We need it to ensure

that you are complying with these laws and to allow us to figure and

collect the right amount of tax.

You are not required to provide the information requested on a

form that is subject to the Paperwork Reduction Act unless the form

displays a valid OMB control number. Books or records relating to a

form or its instructions must be retained as long as their contents

may become material in the administration of any Internal Revenue

law. Generally, tax returns and return information are confidential, as

required by section 6103.

The time needed to complete and file this form will vary

depending on individual circumstances. The estimated burden for

individual taxpayers filing this form is approved under OMB control

number 1545-0074 and is included in the estimates shown in the

instructions for their individual income tax return. The estimated

burden for all other taxpayers who file this form is shown below.

Recordkeeping 3 hr., 49 min.

Learning about the law or the form 42 min.

Preparing, copying, assembling, and

sending the form to the IRS 47 min.

If you have comments concerning the accuracy of these time

estimates or suggestions for making this form simpler, we would be

happy to hear from you. See the instructions for the tax return with

which this form is filed.

Eligible railroad track is railroad track located within the United

States that is owned or leased by a Class II or Class III railroad at

the close of its tax year. The railroad is treated as owning the

railroad track if it is subject to depreciation under section 167 by the

railroad. Double track is treated as multiple lines of railroad track,

rather than as a single line of railroad track. That is, one mile of

single track is one mile, but one mile of double track is two miles.

QRTME are expenditures (whether or not otherwise chargeable to a

capital account) for maintaining, repairing, and improving a qualifying

railroad structure that is owned or leased as of January 1, 2005, by a

Class II or Class III railroad. If you paid or incurred QRTME during

the tax year, you do not have to reduce that QRTME by any amount

of direct or indirect reimbursement to which you are entitled from a

Class II or Class III railroad which made an assignment of eligible

railroad track to you.

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

may be required to be capitalized as a tangible asset or an intangible

asset, if applicable. See Temporary Regulations section

1.45G-1T(e)(1).

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

railroad structure (including railroad track) asset or intangible asset, if

applicable. The reduction is limited to the amount of QRTME

capitalized with respect to the asset. For further details, see

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

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

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

under common control” are treated as a single taxpayer. See

Temporary Regulations section 1.45G-1T(f)(2) for a definition of these

terms. As a member, compute your credit based on your

proportionate share of QRTME giving rise to the group’s RTMC.

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

how your share of the credit was figured, and write “See Attached” 

next to the entry space for line 5.

The payment by an eligible taxpayer, as an assignee, to a Class II

or Class III railroad, as an assignor, in exchange for an assignment

of miles of eligible railroad track for purposes of the credit

computation is treated as QRTME paid or incurred by the assignee

and not the assignor.

Enter the number of eligible railroad track miles (see Eligible

railroad track above) owned or leased by you.

An assigned mile of eligible railroad track need not correspond to

any specific mile of eligible railroad track with respect to which the

eligible taxpayer actually pays or incurs the QRTME. Further, an

assignment requires no transfer of legal title or other indicia of

ownership of the eligible railroad track, and need not specify the

location of any assigned mile of eligible railroad track. However, the

following information must be provided with respect to the

assignment in the form of a statement attached to the tax return for

the tax year for which the assignment is made.

● The name and taxpayer identification number of each assignee.

● The total number of miles of the assignor’s eligible railroad track.

● The number of miles of eligible railroad track assigned by the

assignor for the tax year to the assignee.

● The total number of miles of eligible railroad track assigned by the

assignor for the tax year to all assignees.

The following information must be provided with respect to the

assignment in the form of a statement attached to the tax return for

the tax year for which the assignment is made.

● The total number of miles of eligible railroad track assigned to the

assignee for the assignee’s tax year.

● Attestation that the assignee has in writing, and has retained as

part of the assignee’s records for purposes of Regulations section

1.6001-1(a), the following information from each assignor:

a. The name and taxpayer identification number of each assignor;

b. The effective date of each assignment (treated as being made

by the assignor at the end its tax year) to the assignee; and

2. If the assignor, in its required statement (see the

instructions for line 3b above), assigns more miles than it

has at the end of its tax year, the excess will be used to

reduce each assignee’s allocation in the same proportion

as the assignee’s original allocation of miles bears in

relation to the total miles originally assigned.

c. The number of miles of eligible railroad track assigned by each

assignor to the assignee for the tax year of the assignee.

Notes. 1. The assignee cannot reassign miles.

Qualifying railroad structure is property located within the United

States that includes, in part, tunnels, bridges, and railroad track. For

a complete description, see Temporary Regulations section

1.45G-1T(b)(4).

Line 3a (This line only applies to you if you are a Class II or Class

III railroad.)

Line 3b (This line only applies to you if you are a Class II or Class

III railroad.)

Member of Controlled Group or Business

Under Common Control