§281 Terminal railroad corporations and their shareholders

Summary

Terminal railroad corporations must not count as taxable income any part of a railroad shareholder’s liability that is wiped out by giving that shareholder credit with related terminal income, nor any part of a charge they would have made for terminal services but reduced because they counted related terminal income when setting the charge. They also keep any normal tax deductions even if these credits or charge computations occur. If applying this rule would create or increase a net operating loss for a taxable year that ends after the date this law was enacted, the rule does not apply to that part. The same no-counting rule applies to the corporation’s shareholders, subject to that net-loss limit. These rules only work if there was a written agreement signed by all shareholders before the taxable year began. Definitions (one line each): "Terminal railroad corporation" — a U.S. railroad company not in an affiliated group (except possibly as the common parent) whose owners are rail carriers, whose main business is terminal and switching services, that serves its owners substantially, and whose owners use the same tax year. "Related terminal income" — income from terminal services normally provided to railroads or their employees/passengers/shippers; from non-rail uses of mainly-rail facilities; from railroads for services tied to operations; and from the U.S. for mail handling. "Related terminal services" — the services and facility uses counted in related terminal income. The Treasury (IRS) will write rules needed to implement these points.