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Understanding Related Terminal Income [Internal Revenue]: A Comprehensive Guide
Definition & Meaning
Related terminal income refers to the taxable income that a terminal railroad corporation earns during a tax year from specific services or facilities it provides directly. This income is calculated without considering certain tax provisions, such as those related to net operating losses or capital gains. Examples of qualifying income include rent from leasing terminal facilities to railroad users. However, income from dividends or capital asset sales does not qualify as related terminal income.
Table of content
Legal Use & context
Related terminal income is primarily relevant in the context of federal income tax law, particularly for terminal railroad corporations. This term is significant for tax compliance and reporting, as it helps determine taxable income derived from specific railroad-related activities. Legal professionals may assist clients in accurately reporting this income, and users can manage tax filings using legal templates from US Legal Forms.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A terminal railroad corporation earns income by charging railroad companies for the use of its switching facilities. This income qualifies as related terminal income.
Example 2: A terminal corporation rents space to a restaurant within its terminal building, primarily serving railroad employees. This income is also considered related terminal income.
Relevant laws & statutes
The primary regulation governing related terminal income is found in 26 CFR 1.281-3, which outlines the definition and criteria for qualifying income for terminal railroad corporations.
Comparison with related terms
Term
Definition
Difference
Terminal Income
General income derived from terminal operations.
Related terminal income is specifically defined and excludes certain types of income.
Taxable Income
Income subject to income tax.
Related terminal income is a subset of taxable income specific to terminal railroad corporations.
Common misunderstandings
What to do if this term applies to you
If you are involved with a terminal railroad corporation, ensure that you accurately report related terminal income according to IRS regulations. Consider using legal templates from US Legal Forms to assist with tax filings. If your situation is complex, consulting a tax professional or attorney may be beneficial.
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