Internal Revenue Code:Sec. 45G. Railroad track maintenance credit

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Contents


Location


     TITLE 26 - INTERNAL REVENUE CODE
      Subtitle A - Income Taxes
       CHAPTER 1 - NORMAL TAXES AND SURTAXES
        Subchapter A - Determination of Tax Liability
         PART IV - CREDITS AGAINST TAXES

Statute


   SEC. 45G. RAILROAD TRACK MAINTENANCE CREDIT.

    (a) General Rule.--For purposes of section 38, the railroad track
maintenance credit determined under this section for the taxable year
is an amount equal to 50 percent of the qualified railroad track
maintenance expenditures paid or incurred by an eligible taxpayer during 
the taxable year.
    (b) Limitation.--
    (1) In general.--The credit allowed under subsection (a) 
        for any taxable year shall not exceed the product of--
                  (A) $3,500, multiplied by
                  (B) the sum of--
                  (i) the number of miles of railroad track 
                      owned or leased by the eligible taxpayer as of the 
                      close of the taxable year, and
                 (ii) the number of miles of railroad track 
                      assigned for purposes of this subsection to the 
                      eligible taxpayer by a Class II or Class III 
                      railroad which owns or leases such railroad track 
                      as of the close of the taxable year.
    (2) Assignments.--With respect to any assignment of a mile 
        of railroad track under paragraph (1)(B)(ii)--
            (A) such assignment may be made only once per 
                taxable year of the Class II or Class III railroad and 
                shall be treated as made as of the close of such taxable 
                year,
            (B) such mile may not be taken into account under 
                this section by such railroad for such taxable year, and
            (C) such assignment shall be taken into account 
                for the taxable year of the assignee which includes the 
                date that such assignment is treated as effective.
    (c) Eligible Taxpayer.--For purposes of this section, the term 
`eligible taxpayer' means--
            (1) any Class II or Class III railroad, and
            (2) any person who transports property using the rail 
        facilities of a Class II or Class III railroad or who furnishes 
        railroad-related property or services to a Class II or Class III 
        railroad, but only with respect to miles of railroad track 
        assigned to such person by such Class II or Class III railroad 
        for purposes of subsection (b).
    (d) Qualified Railroad Track Maintenance Expenditures.--For 
purposes of this section, the term `qualified railroad track maintenance 
expenditures' means gross expenditures (whether or not otherwise chargeable to 
capital account) for maintaining railroad track (including roadbed, 
bridges, and related track structures) owned or leased as of January 1, 
2005, by a Class II or Class III railroad (determined without regard to any 
consideration for such expenditures given by the Class II or 
Class III railroad which made the assignment of such track).
    (e) Other Definitions and Special Rules.--
            (1) Class ii or Class iii railroad.--For purposes of this 
        section, the terms `Class II railroad' and `Class III railroad' 
        have the respective meanings given such terms by the Surface 
        Transportation Board.
            (2) Controlled groups.--Rules similar to the rules of 
        paragraph (1) of section 41(f) shall apply for purposes of this 
        section.
            (3) Basis adjustment.--For purposes of this subtitle, if a 
        credit is allowed under this section with respect to any 
        railroad track, the basis of such track shall be reduced by the 
        amount of the credit so allowed.

    (f) Application of Section.--This section shall apply to qualified 
railroad track maintenance expenditures paid or incurred during taxable 
years beginning after December 31, 2004, and before January 1, 2008.


Sources

      Pub.L. 108-357, Sec.245, dated October 22, 2004.

Miscellaneous

                               AMENDMENTS

2006 - Tax Relief and Health Care Act of 2006 (P.L. 109-432)
SEC. 423. MODIFICATION OF RAILROAD TRACK MAINTENANCE CREDIT.
    (a) In General.--Section 45G(d) <<NOTE: 26 USC 45G.>> (defining 
qualified railroad track maintenance expenditures) is amended--
            (1) by inserting ``gross'' after ``means'', and
            (2) by inserting ``(determined without regard to any 
        consideration for such expenditures given by the Class II or 
        Class III railroad which made the assignment of such track)'' 
        after ``Class II or Class III railroad''.

2005 - P.L. 109-135, Section 403
  (f) Amendments Related to Section 245 of the Act.--
            (1) Subsection (b) of section 45G is amended to read as 
        follows:
    ``(b) Limitation.--
            ``(1) In general.--The credit allowed under subsection (a) 
        for any taxable year shall not exceed the product of--
                    ``(A) $3,500, multiplied by
                    ``(B) the sum of--
                          ``(i) the number of miles of railroad track 
                      owned or leased by the eligible taxpayer as of the 
                      close of the taxable year, and
                          ``(ii) the number of miles of railroad track 
                      assigned for purposes of this subsection to the 
                      eligible taxpayer by a Class II or Class III 
                      railroad which owns or leases such railroad track 
                      as of the close of the taxable year.
            ``(2) Assignments.--With respect to any assignment of a mile 
        of railroad track under paragraph (1)(B)(ii)--
                    ``(A) such assignment may be made only once per 
                taxable year of the Class II or Class III railroad and 
                shall be treated as made as of the close of such taxable 
                year,
                    ``(B) such mile may not be taken into account under 
                this section by such railroad for such taxable year, and
                    ``(C) such assignment shall be taken into account 
                for the taxable year of the assignee which includes the 
                date that such assignment is treated as effective.''.
            (2) Paragraph (2) of section 45G(c) is <<NOTE: 26 USC 
        45G.>> amended to read as follows:
            ``(2) any person who transports property using the rail 
        facilities of a Class II or Class III railroad or who furnishes 
        railroad-related property or services to a Class II or Class III 
        railroad, but only with respect to miles of railroad track 
        assigned to such person by such Class II or Class III railroad 
        for purposes of subsection (b).''.

                    EFFECTIVE DATE OF 2006 AMENDMENT
2006 - Tax Relief and Health Care Act of 2006 (P.L. 109-432)
SEC. 423(b) Effective Date.--The <<NOTE: 26 USC 45G note.>> amendment made 
by this section shall take effect as if included in the amendment made 
by section 245(a) of the American Jobs Creation Act of 2004.

References


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