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TITLE 26-INTERNAL REVENUE CODE this section and amending the analysis of sections pre- ceding section 261 of this title] shall apply with re- spect to demolitions commencing after June 30, 1976, and before January 1, 1981." PART X-TERMINAL RAILROAD CORPO- RATIONS AND THEIR SHAREHOLDERS Sec. 281. Terminal railroad corporations and their share- holders. AMENDMENTS 1962-Pub. L. 87-870, § 1(a), Oct. 23, 1962, 76 Stat. 1158, added Part X and item 281. § 281. Terminal railroad corporations and their share- holders (a) Computation of taxable income of terminal rail. road corporations (1) In general In computing the taxable income of a ter- minal railroad corporation- (A) such corporation shall not be consid- ered to have received or accrued- (1) the portion of any liability of any railroad corporation, with respect to relat- ed terminal services provided by such cor- poration, which is discharged by crediting such liability with an amount of related terminal income, or (it) the portion of any charge which would be made by such corporation for re- lated terminal services provided by it, but which is not made as a result of taking re- lated terminal income into account in computing such charge; and (B) no deduction otherwise allowable under this chapter shall be disallowed as a result of any discharge of liability described in subparagraph (A)(i) or as a result of any computation of charges in the manner de- scribed in subparagraph (A)(ii). (2) Limitation In the case of any taxable year ending after the date of the enactment of this section, paragraph (1) shall not apply to the extent that it would (but for this paragraph) operate to create (or increase) a net operating loss for the terminal railroad corporation for the tax- able year. (b) Computation of taxable income of shareholders Subject to the limitation in subsection (a)(2), in computing the taxable income of any share- holder of a terminal railroad corporation, no amount shall be considered to have been re- ceived or accrued or paid or incurred by such shareholder as a result of any discharge of li- ability described in subsection (a)(1)(A)(i) or as a result of any computation of charges in the manner described in subsection (a)(1)(A)(ii). (c) Agreement required In the case of any taxable year, subsections (a) and (b) shall apply with respect to any dis- charge of liability described in subsection (a)(1)(A)(l), and to any computation of charges in the manner described in subsection (a)(1)(A)(ii), only if such discharge or computa- tion (as in the case may be) was provided for in a written agreement, to which all of the share- holders of the terminal railroad corporation were parties, entered into before the beginning of such taxable year. (d) Definitions For purposes of this section- (1) Terminal railroad corporation The term "terminal railroad corporation" means a domestic railroad corporation which Is not a member, other than as a common parent corporation, of an affiliated group (as defined in section 1504) and- (A) all of the shareholders of which are domestic railroad corporations subject to part I of the Interstate Commerce Act (49 U.S.C. 1 and following); (B) the primary business of which is the providing of railroad terminal and switch- ing facilities and services to domestic rail- road corporations subject to part I of the Interstate Commerce Act and to the ship- pers and passengers of such railroad corpo- rations; (C) a substantial part of the services of which for the taxable year is rendered to one or more of its shareholders; and (D) each shareholder of which computes its taxable income on the basis of a taxable year beginning or ending on the same day that the taxable year of the terminal rail- road corporation begins or ends. (2) Related terminal income The term "related terminal income" means the income (determined in accordance with regulations prescribed by the Secretary) of a terminal railroad corporation derived- (A) from services or facilities of a charac- ter ordinarily and regularly provided by ter- minal railroad corporations for railroad cor- porations or for the employees, passengers, or shippers of railroad corporations; (B) from the use by persons other than railroad corporations of portions of a facili- ty, or a service which is used primarily for railroad purposes; (C) from any railroad corporation for ser- vices or facilities provided by such terminal railroad corporation in connection with rail- road operations; and (D) from the United States in payment for facilities or services in connection with mail handling. For purposes of subparagraph (B), a substan- tial addition, constructed after the date of the enactment of this section, to a facility shall be treated as a separate facility. (3) Related terminal services The term "related terminal services" in- cludes only services, and the use of facilities, taken into account in computing related ter- minal income. (e) Regulations The Secretary shall prescribe such regula- tions as may be necessary to carry out the pur- poses of this section. (Added Pub. L. 87-870, § 1(a), Oct. 23, 1962, 76 Stat. 1158, and amended Pub. L. 94-455, title XIX, §§ 1901(a)(40), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1771, 1834.) Page 228