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[quote user="schlimm"] According to IRS Publication 946:    Class Life is 14 years for locomotives and passenger train cars owned by the railroad company. GDS (MACRS) = 7 years.  ADS = 14 years. [/quote] The useful lives of equipment frequently are different for GAAP and IRS purposes.  The differences show up as deferred debits and credits on the Balance Sheet. Under GAAP a company estimates the useful life of "its" assets for depreciation. The IRS tables, which apply to a generic asset class, may have little to do with an entity's experience and, therefore, result in dramatically different depreciation schedules. Amtrak's locomotives operate under different constraints than UP's locomotives and, therefore, for GAAP purposes probably have different expected useful lives. But the IRS treats them alike. The shorter useful life expectancy allowed by the IRS means that the company can deduct a higher amount of depreciation for the accounting period.  This results in a lower tax obligation than would be the case under GAAP.  And it results in a deferred credit on the Balance Sheet.   Without access to Amtrak's books, we don't know how long Amtrak depreciates the locomotives and cars used for its trains.  I am using the 42 years, unless someone has better information, because it results in a lower amount of depreciation allocated to the Texas trains than would be the case using the IRS tables or other generic tables.
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