8900 Instructions for Form 8900

Instructions for Form 8900

Department of the Treasury
Internal Revenue Service

(Rev. February 2020)

Qualified Railroad Track Maintenance Credit
Class I railroads include only the following seven entities.

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

• BNSF.
• CSX.
• Grand Trunk Corporation (a holding company for all of Canadian

General Instructions
Future Developments

For the latest information about developments related to Form 8900
and its instructions, such as legislation enacted after they were
published, go to IRS.gov/Form8900.

What’s New
Credit extension. The qualified railroad track maintenance credit
was retroactively extended to cover qualified railroad track
maintenance expenditures paid or incurred in tax years beginning in
2018, 2019, 2020, 2021, or 2022. A safe harbor rule allows
assignments, including related expenditures paid or incurred, for tax
years beginning on or after January 1, 2018, and ending before
January 1, 2020, to be treated as effective as of the close of that tax
year if made pursuant to a written agreement entered into no later
than March 19, 2020.
Periodic updating. Form 8900 and its instructions will no longer be
updated annually. Instead, they'll only be updated when necessary.
Use these instructions and the Form 8900 (Rev. February 2020) for
tax years beginning after 2017. For previous tax years, see the
applicable Form 8900 and instructions. For example, use the 2017
Form 8900 with the 2017 Instructions for Form 8900 for tax year
ending December 31, 2017.
For 2018 claims, use Form 8900 (Rev. February 2020)

TIP because it has lines 1 through 5 available if needed.

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.
Partnerships and S corporations must file this form to claim the
credit. All other taxpayers are not required to complete or file this
form if their only source for this credit is a partnership or S
corporation. Instead, they can report this credit directly on line 4g in
Part III of Form 3800, General Business Credit.

Definitions
Eligible taxpayers. Eligible taxpayers include the following.
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.
Feb 20, 2020

National's U.S. railroad operations).
• Kansas City Southern.
• Norfolk Southern.
• Soo Line (owned by Canadian Pacific).
• Union Pacific.

Rail facilities. 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. 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. 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. 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,
1 mile of single track is 1 mile, but 1 mile of double track is 2 miles.
Qualifying railroad structure. 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).
Qualified railroad track maintenance expenditures (QRTME).
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,
2015, 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

Cat. No. 66497D

• 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

Regulations section 1.45G-1(f)(2) for a definition of these terms. As
a member, your credit is determined on a proportionate basis to your
share of the aggregate QRTME taken into account by the group for
the 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.

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

Specific Instructions
Line 1

!

CAUTION

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

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.
1. The name and taxpayer identification number of each
assignor.
2. The effective date of each assignment (treated as being
made by the assignor at the end of its tax year) to the assignee.
3. The number of miles of eligible railroad track assigned by
each assignor to the assignee for the tax year of the assignee.

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, earlier) owned or leased by you.

Line 3b

Notes

(This line only applies to you if you are a Class II or Class III
railroad.)

• The assignee cannot reassign miles.
• If the assignor, in its required statement (see the instructions for

See What's New, earlier, for a safe harbor rule that may
apply.

!

See What's New, earlier, for a safe harbor rule that may
apply.

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.

CAUTION

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 you assign is treated as being assigned on the
last day of your tax year.

Line 6

Enter total qualified railroad track maintenance credits from:
• Schedule K-1 (Form 1065), Partner's Share of Income,
Deductions, Credits, etc., box 15 (code P); and
• Schedule K-1 (Form 1120-S), Shareholder's Share of Income,
Deductions, Credits, etc., box 13 (code P).

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.

Partnerships and S corporations report the above credits on
line 6. All other filers figuring a separate credit on earlier lines also
report the above credits on line 6. All others not using earlier lines to
figure a separate credit can report the above credits directly on Form
3800, Part III, line 4g.

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.

h

The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden for individual and
business taxpayers filing this form is approved under OMB control number 1545-0074 and 1545-0123 and is included in the estimates shown
in the instructions for their individual and business income tax return. The estimated burden for all other taxpayers who file this form is shown
below.
Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Learning about the law or the form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preparing and sending the form to the IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 hr., 4 min.
0 hr., 53 min.
1 hr., 00 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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Instructions for Form 8900 (Rev. 02-2020)