[Code of Federal Regulations]
[Title 26, Volume 1]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.281-1]

[Page 737]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.281-1  In general.

    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 Sec. 1.281-2 
provide that the ``reduced amount'' described in paragraph (c) of Sec. 
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 Sec. 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 Sec. 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]