26 USC 281 - Terminal railroad corporations and their shareholders

U.S Code last checked for updates: May 17, 2024

§ 281.

Terminal railroad corporations and their shareholders

(a)

Computation of taxable income of terminal railroad corporations

(1)

In general

In computing the taxable income of a terminal railroad corporation—

(A)

such corporation shall not be considered to have received or accrued—

(i)

the portion of any liability of any railroad corporation, with respect to related terminal services provided by such corporation, which is discharged by crediting such liability with an amount of related terminal income, or

(ii)

the portion of any charge which would be made by such corporation for related terminal services provided by it, but which is not made as a result of taking related terminal income into account in computing such charge; and

(B)

no deduction otherwise allowable under this chapter shall be disallowed as a result of any discharge of liability described in subparagraph (A)(i) or as a result of any computation of charges in the manner described in subparagraph (A)(ii).

(2)

Limitation

(b)

Computation of taxable income of shareholders

(c)

Agreement required

(d)

Definitions

For purposes of this section—

(1)

Terminal railroad corporation

The term “terminal railroad corporation” means a domestic railroad corporation which is not a member, other than as a common parent corporation, of an affiliated group (as defined in section 1504) and—

(A)

all of the shareholders of which are rail carriers subject to part A of subtitle IV of title 49;

(B)

the primary business of which is the providing of railroad terminal and switching facilities and services to rail carriers subject to part A of subtitle IV of title 49 and to the shippers and passengers of such railroad corporations;

(C)

a substantial part of the services of which for the taxable year is rendered to one or more of its shareholders; and

(D)

each shareholder of which computes its taxable income on the basis of a taxable year beginning or ending on the same day that the taxable year of the terminal railroad corporation begins or ends.

(2)

Related terminal income

The term “related terminal income” means the income (determined in accordance with regulations prescribed by the Secretary) of a terminal railroad corporation derived—

(A)

from services or facilities of a character ordinarily and regularly provided by terminal railroad corporations for railroad corporations or for the employees, passengers, or shippers of railroad corporations;

(B)

from the use by persons other than railroad corporations of portions of a facility, or a service, which is used primarily for railroad purposes;

(C)

from any railroad corporation for services or facilities provided by such terminal railroad corporation in connection with railroad operations; and

(D)

from the United States in payment for facilities or services in connection with mail handling.

For purposes of subparagraph (B), a substantial addition, constructed after the date of the enactment of this section, to a facility shall be treated as a separate facility.

(3)

Related terminal services

(e)

Regulations

(Added Pub. L. 87–870, § 1(a), Oct. 23, 1962, 76 Stat. 1158; amended Pub. L. 94–455, title XIX, §§ 1901(a)(40), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1771, 1834; Pub. L. 95–473, § 2(a)(2)(D), (E), Oct. 17, 1978, 92 Stat. 1464; Pub. L. 104–88, title III, § 304(b), Dec. 29, 1995, 109 Stat. 943.)

cite as: 26 USC 281