Form 8900 Qualified Railroad Track Maintenance Credit

Form

8900

OMB No. 1545-1983

Qualified Railroad Track Maintenance Credit

Department of the Treasury
Internal Revenue Service

▶

2010

Attach to your tax return.

Attachment
Sequence No. 144
Identifying number

Name(s) shown on return

1

Qualified railroad track maintenance expenditures paid or incurred
(see instructions) . . . . . . . . . . . . . . . . .

2
3a

1

Enter 50% (.50) of line 1 . . . . . . . . . . . . . . . . . . .
Number of miles of railroad track owned or leased by you (see
instructions) . . . . . . . . . . . . . . . . . . .
3a
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 . . .
3b (
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

.

.

.

.

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, go to line 8 . . . . . . . . . . . . . . . . . . . . . . . . .
Qualified railroad track maintenance credit included on line 7 from passive activities
8
instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . .

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2

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(see
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3d
4
5
6
7
8
9

9
10

Subtract line 8 from line 7 . . . . . . . . . . . . . . . . . . . . . . .
Qualified railroad track maintenance credit allowed for 2010 from passive activities (see
instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10

11

Carryforward of any qualified railroad track maintenance credit that originated in a tax year that
began after 2007 and carryback of the qualified railroad track maintenance credit from 2011 (see
instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Add lines 9 through 11. Report this amount on Form 3800, line 29g . . . . . . . . . . .

11
12

12

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

What’s New
The qualified railroad track maintenance credit was extended to cover
tax years beginning in 2010 and 2011.

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:
1. Any Class II or Class III railroad, as these terms are defined by the
Surface Transportation Board (STB).
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 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:
For Paperwork Reduction Act Notice, see instructions.

• 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 Regulations section 1.45G-1(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 Regulations section 1.45G-1(b)(8).
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.
Qualifying railroad structure is property located within the United
States that includes, in part, tunnels, bridges, and railroad track. For a
complete description, see Regulations section 1.45G-1(b)(4).
Cat. No. 37708X

Form 8900 (2010)

Page 2

Form 8900 (2010)

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.

Adjustments to Basis
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 Regulations section 1.45G-1(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 Regulations section
1.45G-1(e)(2).

Member of Controlled Group or Business Under
Common Control
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 Regulations
section 1.45G-1(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.

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.
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.
Line 3a (This line only applies to you if you are a Class II or Class III
railroad.)
Enter the number of eligible railroad track miles (see Eligible railroad
track above) owned or leased by you.
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 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.
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.

Line 3c
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 of its tax year) to the assignee; and
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.
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.

Line 8
Enter the amount included on line 7 that is from a passive activity.
Generally, a passive activity is a trade or business in which you did not
materially participate. Rental activities are generally considered passive
activities, whether or not you materially participate. For details, see
Form 8582-CR, Passive Activity Credit Limitations (for individuals,
estates, and trusts), or Form 8810, Corporate Passive Activity Loss and
Credit Limitations (for corporations).

Line 10
Enter the passive activity qualified railroad track maintenance credit
allowed for 2010 from Form 8582-CR or Form 8810.

Line 11
Use line 11 to show any carryforward of the qualified railroad track
maintenance credit from a tax year that began after 2007. For
carryforwards of the credit from years prior to 2008, show the
carryforwards on line 6 of Form 3800.
Also use line 11 to show any carryback if you amend your 2010 return
to carry back an unused qualified railroad track maintenance credit from
2011. Use line 11 of the 2009 Form 8900 to show any carryback of an
unused credit from 2010.
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 . . . . . . . . . . . . . 4 hr., 4 min.
Learning about the law or the form . . . . . . . . 53 min.
Preparing, copying, assembling, and
sending the form to the IRS . . . . . . . . . . . 1 hr.
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.