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

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2011

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) . . . . . . . . . . . . . . . . .

1

2

Enter 50% (.50) of line 1 .

3a

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

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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 . . .
c

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2

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3a

3b (

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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, report this amount on Form 3800, line 4g . . . . . . . . . . . . . .

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

What’s New
The carryforwards, carrybacks, and passive activity limitations
for this credit are no longer reported on this form; instead, they
must be reported on Form 3800, General Business Credit.

Who Must File
Eligible taxpayers use Form 8900 to claim the railroad track
maintenance credit (RTMC) for qualified railroad track
maintenance expenditures (QRTME) paid or incurred during the
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.
See the instructions for line 3b for the additional information that
must be provided by assignors.
Taxpayers, other than partnerships and S corporations,
whose only source of this credit is from a partnership or
S corporation, are not required to complete or file this form.
Instead, they can report this credit directly on Form 3800.

Definitions
Eligible taxpayers include:
1. Any Class II or Class III railroad, as these terms are defined
by the Surface Transportation Board.
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 for 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.
For Paperwork Reduction Act Notice, see instructions.

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3d
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7

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 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 (2011)

Form 8900 (2011)

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 for 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
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 for
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 for
the assignment in the form of a statement attached to the tax
return for the tax year for which the assignment is made.

Page 2

• 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 for 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.
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, 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.