26 C.F.R. § 1.281-1 In general.
Title 26 - Internal Revenue
Section 281 provides special rules for the computation of the taxable incomes of a terminal railroad corporation and its shareholders when the terminal railroad corporation, as a result of taking related terminal income into account, reduces a charge which was made or which would be made for related terminal services furnished to a railroad corporation. Section 281 and paragraphs (a) and (b) of §1.281–2 provide that the “reduced amount” described in paragraph (c) of §1.281–2 is not includable in gross income of the terminal railroad corporation, is not treated as a dividend or other distribution to its railroad shareholders, and is not treated as an amount paid -or incurred by the railroad shareholders to the terminal railroad corporation. Section 281 and paragraph (a)(2) of §1.281–2 provide that no deduction otherwise allowable to a terminal railroad corporation shall be disallowed as a result of the “reduced amount” described in paragraph (c) of §1.281–2. Section 1.281–3 defines the terms terminal railroad corporation, related terminal income, related terminal services, agreement, and railroad corporation. Section 1.281–4 describes the effective dates and special rules for application of section 281 to taxable years ending before October 23, 1962. [T.D. 7356, 40 FR 23732, June 2, 1975]
Title 26: Internal Revenue
PART 1—INCOME TAXES
Terminal Railroad Corporations and Their Shareholders
§ 1.281-1 In general.
