Form 8900 Qualified Railroad Track Maintenance Credit

Form 8900 (Rev. Dec. 2006)
Qualified Railroad Track Maintenance Credit

Purpose:

This is the first circulated draft of the Form 8900 (Rev. Dec. 2006) for your
review and comments. Changes made to the form are explained on the attachment.

TPCC meeting: No meeting is planned, but you may request one by contacting John R. Nelson
Prior Revisions

The 2005 Form 8900 is available at:
http://www.irs.gov/pub/irs-pdf/f8900.pdf

Other products

Circulations of draft tax forms and instructions are posted at
http://taxforms.web.irs.gov/draft_products.html.
Draft publications are not available.

Comments

Please email, fax, or call, any comments by June 21, 2006.

John R. Nelson
Tax Law Specialist,
SE:W:CAR:MP:T:B:P
Phone: 202-927-9488
Fax: 202-622-3262
Email: [email protected]

Major Changes for 2006
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We deleted Part II, relating to computation of the allowable credit from the form.
Beginning in 2006, all taxpayers will be required to complete Form 3800, General
Business Credit, to make this computation.
Beginning in 2006, this form will become a continuous use form. That is, it will
be revised only as needed instead of annually. Under current law, this credit is set
to expire on December 31, 2007.
In response to a request from the Office of Chief Counsel, we added an additional
entry for lines 3b and 3c that requests information from the assignee (line 3b) or
assignor (line 3c.)
The final version of the Instructions for “Controlled Groups” will be replaced
with the following text:

Member of controlled group or business under common control. For purposes of
figuring the credit, all members of a controlled group of corporations (as defined in section 41(f)(1)(A) and (f)(5)) and all members of a group of businesses under common control (as defined in section 41(f)(1)(B)), are treated as a single taxpayer. As a member,
compute your credit based on your proportionate share of qualified railroad track maintenance expenditures giving rise to the group’s railroad track maintenance credit. 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.
Note: Please disregard the instructions for “Controlled Groups” in this 1st draft.

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I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
FORM 8900, PAGE 1 OF 2
MARGINS: TOP 13mm (1⁄ 2 "), CENTER SIDES.
PRINTS: HEAD TO HEAD
PAPER: WHITE, WRITING, SUB. 20
INK: BLACK
FLAT SIZE: 216mm (81⁄ 2 ") 3 279mm (11")
PERFORATE: NONE
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Date

Form

8900

Action

Date

O.K. to print
Revised proofs
requested

OMB No. 1545-1983

Qualified Railroad Track Maintenance Credit

(Rev. December 2006)
Department of the Treasury
Internal Revenue Service

©

Signature

Attachment
Sequence No.

Attach to your tax return.

Name(s) shown on return

144

Identifying number

1

Qualified railroad track maintenance expenditures paid or incurred
(see instructions)
2 Enter 50% (.50) of line 1
3a Number of miles of railroad track owned or leased by you (see
instructions)
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)
Enter the name of the assignee (see instructions)

1
2
3a

3b (

)

©

c Number of miles of railroad track assigned to you by the owner or
lessee for purposes of this credit (see instructions)
Enter the name of the assignor (see instructions)
©

3c

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d Total. Combine lines 3a through 3c
4 Multiply line 3d by $3,500
5 Enter the smaller of line 2 or line 4
6 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)

©

3d
4
5
6

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General Instructions

Definitions

Section references are to the Internal Revenue Code unless
otherwise noted.

Eligible Taxpayer

What’s New

1. Any Class II or Class III railroad, as these terms are
defined by the Surface Transportation Board (STB).

● 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
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.
● For tax years beginning in 2006, railroads that assigned
track to another railroad, or have been assigned trackage by
another railroad, will be required to provide additional
information relating to such trackage. See the instructions for
more information.

Purpose of Form
Eligible taxpayers use Form 8900 to claim the credit with
respect to qualified railroad track maintenance expenditures
paid or incurred during tax years beginning after December
31, 2004 and before January 1, 2008.

For Paperwork Reduction Act Notice, see instructions.

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.
For purposes of 2 or 3 above, the taxpayer is only eligible
to claim the credit with respect to miles of 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.

Cat. No. 37708X

Form

8900

(Rev. 12-2006)

2
I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
FORM 8900, PAGE 2 OF 2
MARGINS; TOP 13mm (1⁄ 2 "), CENTER SIDES.
PRINTS: HEAD TO HEAD
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 216mm (81⁄ 2 ") x 279mm (11")
PERFORATE: NONE
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 8900 (Rev. 12-2006)

Page

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Qualified Railroad Track Maintenance Expenditures

Line 7

Qualified railroad track maintenance expenditures means
expenditures (whether or not otherwise chargeable to a
capital account) for maintaining railroad track (including
roadbed, bridges, and related track structures) owned or
leased as of January 1, 2005, by a Class II or Class III
railroad.

S corporations and partnerships. Allocate the line 7 credit
among the shareholders or partners. Show the credit for
each shareholder or partner on Schedule K-1. Electing large
partnerships include this credit in “general credits.”

Basis Reduction

You must reduce the basis of any railroad track by the
amount of the credit on line 5 related to that railroad track.

Specific Instructions
Part I—Current Year Credit

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

2

Qualified railroad track maintenance expenditures must be
paid or incurred by an eligible taxpayer during the tax year.

Line 3a (This line only applies to you if you are a Class II or
Class III railroad.)
You (a) must own or lease each mile of railroad track by the
close of your tax year that corresponds to the credit
computation and (b) that mile must have been owned or
leased by a Class II or Class III railroad as of January 1, 2005.
Line 3b (This line only applies to you if you are a Class II or
Class III railroad.)
You must reduce on line 3b the number of miles of 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.

Member of controlled groups or business under common
control. For purposes of figuring the credit, all members of a
controlled group of corporations (as defined in section 41(f)(5)
and Regulations section 1.41-6T), and all members of a
group of businesses under common control, are treated as a
single taxpayer. The credit allowed each member is based on
its proportionate share of qualified railroad track maintenance
expenditures giving rise to the group’s railroad track
maintenance credit. Use Part I to figure the credit for the
entire group, but enter only this member’s share of the credit
on line 7. Attach a statement showing how this member’s
share of the credit was figured, and write “See Attached”
next to the entry space for line 7.

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.

If there is more than one assignee, attach a statement
identifying the assignees and the mileage assigned to each one.

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.

Line 3c

Recordkeeping

The eligible taxpayer (a) must be assigned each mile of
railroad track for purposes of the credit (i) by the close of the
tax year that corresponds to the credit computation and (ii) by
the Class II or Class III railroad that owns or leases that
railroad track and (b) that mile must have been owned or
leased by a Class II or Class III railroad as of January 1, 2005.

Learning about the law or the form

30 min.

Preparing, copying, assembling, and
sending the form to the IRS

38 min.

If there is more than one assignor, attach a statement
identifying the assignors and the mileage assigned by each.

6 hr., 56 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.

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