Seaboard C. L. R. Co. v. Commissioner
United States Tax Court
Petitioner is the successor by merger to ACL, an interstate railroad which used the retirement-replacement-betterment method of accounting for its track structure during the years at issue. Held, during the years at issue: 1. In applying the retirement-replacement-betterment method of accounting, the deductions claimed by ACL for rail replaced or retired along its lines must be reduced by the fair market value of the rail which is recovered for reuse, i.e., relay rail.
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Petitioner is the successor by merger to ACL, an interstate railroad which used the retirement-replacement-betterment method of accounting for its track structure during the years at issue. Held, during the years at issue: 1. In applying the retirement-replacement-betterment method of accounting, the deductions claimed by ACL for rail replaced or retired along its lines must be reduced by the fair market value of the rail which is recovered for reuse, i.e., relay rail. Louisville & Nashville Railroad Co. v. Commissioner, 66 T.C. 962 (1976), on appeal (6th Cir., June 2, 1978), followed. 2. The…
1Opinion of the Court
Tannenwald, Judge:*
Respondent determined that petitioner Seaboard Coast Line Railroad Co. is liable as successor by merger to Atlantic Coast Line Railroad Co. (hereinafter referred to as ACL) for deficiencies in Federal income tax for the calendar years and in the amounts as follows:
Year Deficiency Year Deficiency
1958 . $96,311.98 1960 . $630,831.47
1959 . 621,908.52 1961 . 654,260.35
Upon leave of Court granted February 10, 1975, respondent filed an amendment to his answer wherein he claimed increased deficiencies in petitioner’s Federal income taxes for the years 1958 through 1960 in the…
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