[Federal Register Volume 71, Number 236 (Friday, December 8, 2006)]
[Rules and Regulations]
[Pages 71039-71040]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-20799]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1 and 602

[TD 9286]
RIN 1545-BE91


Railroad Track Maintenance Credit; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendment.

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SUMMARY: This document corrects temporary regulations (TD 9286) that 
were published in the Federal Register on Friday, September 8, 2006 (71 
FR 53009) providing rules for claiming the railroad track maintenance 
credit under section 45G of the Internal Revenue Code for qualified 
railroad track maintenance expenditures paid or incurred by a Class II 
railroad or Class III railroad and other eligible taxpayers during the 
taxable year.

DATES: This correction is effective September 8, 2006.

FOR FURTHER INFORMATION CONTACT: Winston H. Douglas, (202) 622-3110 
(not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    The temporary regulations (TD 9286) that is the subject of this 
document is under section 45G of the Internal Revenue Code.

Need for Correction

    As published, the temporary regulations (TD 9286) contain errors 
that may prove to be misleading and are in need of clarification.

List of Subjects

26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

26 CFR Part 602

    Reporting and recordkeeping requirements.

Correction of Publication

0
Accordingly, 26 CFR parts 1 and 602 are corrected by making the 
following correcting amendments:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

    Authority: 26 U.S.C. 7805 * * *


0
Par. 2. Section 1.45G-0T is amended by removing the entry for Sec.  
1.45G-1T(e) and (e)(2) and redesignating the entries for Sec.  1.45G-
1T(e)(1) and Sec.  1.45G-1T(e)(1)(i), (ii) and (iii) as the entries for 
(e), (e)(1), (e)(2) and (e)(3) respectively.

0
Par. 3. Section 1.45G-1T is amended by:
0
1. Removing paragraph (e)(2);
0
2. Redesignating paragraphs (e)(1)(i), (e)(1)(ii), and (e)(1)(iii) as 
paragraphs (e)(1), (e)(2), and (e)(3), respectively;
0
3. Revising paragraph (a), sixth sentence, paragraph (b)(9), paragraph 
(d)(6) Example 2.(ii), last sentence, paragraph headings (e), (e)(1), 
(e)(2) and (e)(3), paragraph (e)(2), second and fifth sentences, 
paragraph (e)(3), first sentence, Example 1.(i), third sentence, 
Example 1.(iii), second sentence, Example 2.(iii), fourth sentence, and 
paragraph (g)(3). The revisions read as follows:


Sec.  1.45G-1T  Railroad track maintenance credit (temporary).

    (a) * * * Paragraph (e) of this section contains rules for 
adjusting basis for the amount of the RTMC claimed by an eligible 
taxpayer. * * *
    (b) * * *
    (9) Except as provided in paragraph (e)(2) of this section, 
railroad track is property described in STB property accounts 8 (ties), 
9 (rails and other track material), and 11 (ballast) in 49 CFR part 
1201, subpart A.
* * * * *
    (d) * * *
    (6) * * *
    Example 2. * * *
    (ii) * * * Because O's tentative amount of RTMC does not exceed O's 
credit limitation amount for the taxable year ending March 31, 2007, O 
may claim a RMTC for the taxable year ending March 31, 2007, in the 
amount of $75,000.
* * * * *
    (e) Adjustments to basis--* * *
    (1) In general. * * *
    (2) Basis adjustment made to railroad track. * * * For purposes of 
section 45G(e)(3) and this paragraph (e)(2), the adjusted basis of any 
railroad track with respect to which the eligible taxpayer claims the 
RTMC is limited to the amount of QRTME, if any, that is required to be 
capitalized into the qualifying railroad structure or an intangible 
asset. * * * If all or some of the QRTME paid or incurred by an 
eligible taxpayer during the taxable year is capitalized under section 
263(a) to more than one asset, whether tangible or intangible (for 
example, railroad track and bridges), the reduction to the basis of 
these assets under this paragraph (e)(2) is allocated among each of the 
assets subject to the reduction in proportion to the unadjusted basis 
of each asset at the time the QRTME is paid or incurred during that 
taxable year.
    (3) Examples. The application of this paragraph (e) is illustrated 
by the following examples. * * *
    Example 1. * * *
    (i) * * * X uses the track maintenance allowance method for track 
structure expenditures (for further guidance, see Rev. Proc. 2002-65 
(2002-2 CB 700) and Sec.  601.601(d)(2)(ii)(b) of this chapter). * * *
    (iii) * * * In accordance with paragraph (e)(2) of this section, X 
reduces the capitalized amount of $250,000 by the RTMC of $500,000 
claimed by X for 2006, but not below zero. * * *
    Example 2. * * *
    (iii) * * * In accordance with paragraph (e)(2) of this section, Z 
reduces the capitalized amount of $1 million by the RTMC of $500,000 
claimed by Z for 2006. * * *
* * * * *
    (g) * * *
    (3) Special rules for 2005 returns. If a taxpayer's Federal income 
tax return for a taxable year beginning after December 31, 2004, and 
ending before September 7, 2006, is filed before October 10, 2006, and 
the taxpayer is not filing an amended Federal income tax return for 
that taxable year pursuant to paragraph (g)(2) of this section before 
the taxpayer's next filed original Federal income tax return, see 
paragraphs (d)(4)(iv) and (f)(7) of this section for the statements 
that must be attached to the taxpayer's next filed original Federal 
income tax return.

[[Page 71040]]

PART 602--OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT

0
Par. 4. The authority citation for part 602 continues to read as 
follows:

    Authority: 26 U.S.C. 7805.


0
Par. 5. In Sec.  602.101, paragraph (b) is amended by revising the 
following entry in to the table to read as follows:


Sec.  602.101  OMB control numbers.

* * * * *
    (b) * * *

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                                                            Current OMB
   CFR part or section where identified and described       control No.
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                                * * * * *
1.45G-1T................................................       1545-2031
 
                                * * * * *
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LaNita Van Dyke,
Chief, Publications and Regulations Branch, Legal Processing Division, 
Associate Chief Counsel, (Procedure and Administration).
[FR Doc. E6-20799 Filed 12-7-06; 8:45 am]
BILLING CODE 4830-01-P