In Revenue Procedure 2017-22, the IRS clarified earlier guidance
regarding safe harbors for corporate taxpayers receiving grants
from the government for capital improvements to transportation
services.
Section 118 provides that gross income does not include
contributions to a corporation's capital from non-shareholders.
When money is contributed, the corporation must reduce the basis of
any property acquired within 12 months by the amount of the
contribution. I.R.C. § 362(c). Any excess contribution must be
applied to reduce the basis of other property held by the
corporation. Id.
In Revenue Procedure 2010-46, the IRS set forth a safe harbor
for capital investments in transportation trades or businesses.
Specifically, Revenue Procedure 2010-46 applies to grants received
under "(1) the Supplemental Discretionary Grants for Capital
Investments in Surface Transportation Infrastructure (TIGER
Discretionary Grants) program as authorized by Title XII, Division
A of
