EXPENDITURES IN CONNECTION WITH CERTAIN RAILROAD ROLLING STOCK.

SEC. 706. EXPENDITURES IN CONNECTION WITH CERTAIN RAILROAD ROLLING STOCK. (a) In General.—Section 263 (relating to capital expenditures) is amended by adding at the end thereof the following new subsection: “(e) Expenditures in Connection With Certain Railroad Rolling Stock.—In the case of expenditures in connection with the rehabilitation of a unit of railroad rolling stock (except a locomotive) used by a domestic common carrier by railroad which would, but for this subsection, be properly chargeable to capital account, such expenditures, if during any 12-month period they do not exceed an amount equal to 20 percent of the basis of such unit in the hands of the taxpayer, shall be treated (notwithstanding subsection (a)) as deductible repairs under section 162 or 212.” (b) Effective Date.—The amendment made by subsection (a) shall apply with respect to taxable years beginning after December 31, 1969.