Qualified Railroad Track Maintenance Credit

2014

Instructions for Form 8900

Department of the Treasury
Internal Revenue Service

Qualified Railroad Track Maintenance Credit
Section references are to the Internal Revenue Code
unless otherwise noted.

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 www.irs.gov/
form8900.

What's New

The qualified railroad track maintenance credit was
extended to cover qualified railroad track maintenance
expenditures paid or incurred in tax years beginning in
2014.

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.
Class I railroads include only the following seven
entities.
BNSF.
CSX.
Feb 06, 2015

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

Cat. No. 66497D

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.
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.

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, 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.

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.
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.

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.

Notes

Line 3a

The assignee cannot reassign miles.
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.

(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

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

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 1120S), Shareholder's Share of
Income, Deductions, Credits, etc., box 13 (code P).

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.

Partnerships and S corporations must always report the
above credits on line 6. All other filers figuring a separate
credit on earlier lines must 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.

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

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Instructions for Form 8900 (2014)

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.

hh

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Learning about the law or the form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preparing and sending the form to the IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 hr., 4 min.
53 min.
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.

Instructions for Form 8900 (2014)

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