Form 8697 

(Rev. November 2018) 

Department of the Treasury 

Internal Revenue Service 

Interest Computation Under the Look-Back 

Method for Completed Long-Term Contracts 

▶ Go to www.irs.gov/Form8697 for instructions and latest information.

OMB No. 1545-1031 

Attachment 

Sequence No. 97 

For the filing year beginning , and ending . See instructions. 

Type 

or 

Print

Name 

Number, street, and apt., room, or suite no. If a P.O. box, see instructions. 

City or town, state, and ZIP code 

A Identifying number 

B Check applicable box to show type of taxpayer: 

Corporation 

Individual 

Estate or trust 

S corporation 

Partnership 

C If you were an owner of an interest in a pass-through entity (such as a partnership or an S corporation) that holds one or more long-term contracts to which this 

interest computation relates, enter the name and employer identification number of the entity. Attach a schedule if there is more than one such entity. 

Name of entity Employer identification number 

Part I Regular Method (see instructions)

Filing Year

 

Year ended 

mo. yr. 

Redetermination Years

(a) 

Year ended 

mo. yr. 

(b) 

Year ended 

mo. yr. 

(c) 

Totals 

(Add columns (a) 

and (b).) 

1 Taxable income or loss for the prior years shown on tax 

return (or as previously adjusted) before net operating loss 

or capital loss carrybacks (other than carrybacks that must 

be taken into account to properly compute interest under 

section 460) (see instructions). If you were required to file 

Form 8697 for an earlier year, enter adjusted taxable 

income for the prior years from line 3, Form 8697, for the 

most recent filing year that affects the prior years . . .

2 Adjustment to income to reflect the difference between: 

(a) the amount of income required to be allocated for 

post-February 1986 contracts completed or adjusted 

during the tax year based on the actual contract price 

and costs, and (b) the amount of income reported for 

such contracts based on estimated contract price and 

costs. See instructions and attach a schedule listing each 

separate contract, unless you were an owner of an 

interest in a pass-through entity reporting this amount 

from Schedule K-1 or a similar statement . . . . .

3 Adjusted taxable income for look-back purposes. 

Combine lines 1 and 2. If line 3 is a negative amount, see 

instructions . . . . . . . . . . . . . .

4 Income tax liability on line 3 amount using tax rates in 

effect for the prior years (see instructions) . . . . .

5 Income tax liability shown on return (or as previously 

adjusted) for the prior years (see instructions). If you were 

required to file Form 8697 for an earlier year, enter the 

amount required to be reported on line 4, Form 8697, for 

the most recent filing year that affects the prior years .

6 Increase or decrease in tax for the prior years on which 

interest is due (or is to be refunded). Subtract line 5 from 

line 4 . . . . . . . . . . . . . . .

7 Interest due on increase, if any, shown on line 6 (see 

instructions) . . . . . . . . . . . . .

8 Interest to be refunded on decrease, if any, shown on line 

6 (see instructions) . . . . . . . . . . .

9 Net amount of interest to be refunded to you. If line 8, column (c), exceeds line 7, column (c), enter the excess. File 

Form 8697 separately; do not attach it to your tax return (see instructions) . . . . . . . . . . . . .

10 Net amount of interest you owe. If line 7, column (c), exceeds line 8, column (c), enter the excess. Attach Form 8697 

to your tax return. See instructions for where to include this amount on your return . . . . . . . . . .

For Privacy Act and Paperwork Reduction Act Notice, see instructions. Cat. No. 64598V Form 8697 (Rev. 11-2018) 
Form 8697 (Rev. 11-2018) Page 2 

Part II Simplified Marginal Impact Method (see instructions)

Date of each prior year to which interest 

computation relates: 

(a) 

Year ended 

mo. yr. 

(b) 

Year ended 

mo. yr. 

(c) 

Year ended 

mo. yr. 

(d) 

Totals 

(Add columns (a), 

(b), and (c).) 

1 Adjustment to regular taxable income to reflect the 

difference between: (a) the amount of such income required 

to be allocated for post-February 1986 contracts completed 

or adjusted during the tax year based on actual contract 

price and costs, and (b) the amount of such income 

reported for such contracts based on estimated contract 

price and costs. See instructions and attach a schedule 

listing each separate contract, unless you were an owner of 

an interest in a pass-through entity reporting this amount 

from Schedule K-1 or a similar statement . . . . .

2 Increase or decrease in regular tax for prior years. Multiply 

line 1 in each column by the applicable regular tax rate 

(see instructions) . . . . . . . . . . . .

Note: For prior years beginning before 1987, skip lines 3 

and 4 and enter on line 5 the amount from line 2. 

3 Adjustment to alternative minimum taxable income to reflect 

the difference between: (a) the amount of such income 

required to be allocated for post-February 1986 contracts 

completed or adjusted during the tax year based on actual 

contract price and costs, and (b) the amount of such income 

reported for such contracts based on estimated contract 

price and costs. See instructions and attach a schedule 

listing each separate contract, unless you were an owner of 

an interest in a pass-through entity reporting this amount 

from Schedule K-1 or a similar statement . . . . .

4 

Note: For tax years beginning after 2017, the alternative 

minimum tax for corporations has been repealed. 

Increase or decrease in alternative minimum tax (AMT) for 

prior years. Multiply line 3 in each column by the 

applicable AMT rate (see instructions) . . . . . .

5 Enter the larger of line 2 or line 4. See instructions if either 

amount is negative . . . . . . . . . . .

Pass-through entities: Skip line 6 and enter on line 7 the 

amount from line 5. 

6 Overpayment ceiling. For each column in which line 5 is a 

negative number, enter your total tax liability for the prior year, 

as adjusted for past applications of the look-back method 

and after net operating loss, capital loss, net section 1256 

contracts loss, and credit carryovers and carrybacks to that 

year. For each column in which line 5 is a positive number, 

leave line 6 blank and enter on line 7 the amount from line 5

7 Increase or decrease in tax for the prior years on which interest is 

due (or is to be refunded). Enter the amount from line 5 or line 6, 

whichever is smaller. Treat both numbers as positive when making 

this comparison, but enter the amount as a negative number .

8 Interest due on increase, if any, shown on line 7 (see 

instructions) . . . . . . . . . . . . .

9 Interest to be refunded on decrease, if any, shown on line 

7 (see instructions) . . . . . . . . . . .

10 Net amount of interest to be refunded to you. If line 9, column (d), exceeds line 8, column (d), enter the excess. File 

Form 8697 separately; do not attach it to your tax return (see instructions) . . . . . . . . . . . . .

11 Net amount of interest you owe. If line 8, column (d), exceeds line 9, column (d), enter the excess. Attach Form 8697 

to your tax return. See instructions for where to include this amount on your return . . . . . . . . . .

Signature(s) Complete this section only if this form is being filed separately. 

Sign 

Here 

Under penalties of perjury, I declare that I have examined this form, including accompanying schedules and statements, and to the best of my knowledge 

and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. 

▶ Your signature Date 

Spouse's signature. If a joint return, both must sign Date 

Paid 

Preparer 

Use Only

Print/Type preparer's name Preparer's signature Date Check if 

self-employed

PTIN

Firm's name ▶ Firm's EIN ▶

Firm's address ▶ Phone no.

Form 8697 (Rev. 11-2018)