PUBLIC LAW 91-172-DEC. 30, 1969
stock are not in short supply and shall prescribe regulations desijj:natino; such types. The term '(jualified railroad rolling- stock' shall not include any rolling stock which— ' ' (A) is of the type of roHin<j; stock desionated by such re<rulations as not in short supply, and " (B) is placed in service after (i) 19r2, or (ii);]() days after the date on which such reoulations are pronudj>"ated, whichever is later. " (5) A D J U S T E D BASIS.—
" (A) The adjusted basis of any (jualitied railroad rollinjr stock, with respect to which an election has been made under this section, shall not be increased, for purposes of this section, for amounts chargeable to capital account for additions or improvements after the amortizaticm period has begun. " (B) Costs incurred in connection with a used unit of railroad rolling stock which are properly chargeable to capital account shall be treated as a separate unit of railroad rolling stock for purposes of this section. "^^^ '^^^^ depreciation deduction provided by section 167 shall, despite the provisions of subsection (a), be allowed with. respect to the portion of the adjusted basis which is not taken into account in applying this section. "(6) CoNSTUFCTivE TERMiNATiox.—If at any time during the amortization period any qualified railroad rolling stock ceases to meet the requirements of subsection (d)(1), the taxpayer shall be deemed to ha^e terminated under subsection (c) his election under this section. Such termination shall be effective beginning with the month following the month in which such cessation occurs. " (7) ME'nroD OF ACCOUNTIX(} FOK DATE PLACED ix SEHVICE.—For
purposes of subsections (a) and (b), in the case of (pialified railroad rolling stock placed in service after December HI, 1969, and before January 1, 1970, the taxpayer may elect (unless paragraph (3) is applicable) to begin the 60-month period with the date when such rolling stock is treated as having been placed in service under a method of accounting for acquisitions and retirements of property which— " (A) prescribes a date when property is placed in service, and " (B) is consistently followed by the taxpayer. "(f) L I F E TENAXT AX^D KEMAIXDERMAX.—In the case of qualified railroad rolling stock leased to a domestic common carrier, and held by one person for life with remainder to another person, the deduction under this section shall be computed as if the life tenant were the absolute owner of the property and shall be allowable to the life tenant. " (g) CROSS REFEREXCE.— "For treatment of certain Rain derived from the disposition of property the adjusted basis of which is determined with regard to this section, see section 1245." "SEC. 185. AMORTIZATION OF RAILROAD GRADING AND TUNNEL BORES. " (a) GEXERAL R U E E. — I n the case of a domestic common carrier by
railroad, the taxpayer shall, at his election, be entitled to a deduction with respect to the amortization of the adjusted basis (for determining gain) of his qualified railroad grading and tunnel bores. The amortization deduction proA'ided by this section with respect to such property shall be in lieu of any depreciation deduction, or other amortization deduction, with respect to such property for any taxable year to which the election applies.