Instructions For Form 8697 (Rev. 2013) (Page 4 of 7) in pdf

Lines 4 and 5

apartment, suite, room, or other unit

line 2 amounts should be zero and

number after the street address. If the

reflected in column 2(c). If there are

Reduce the tax liability to be entered on

Post Office does not deliver mail to the

additional adjustments that result from

lines 4 and 5 by allowable credits (other

street address and you have a P.O. box,

the application of the look-back, leave

than refundable credits, for example,

show the box number instead.

column 2(c) blank and reflect the

the credit for taxes withheld on wages,

amounts in the schedule below as

the earned income credit, the credit for

Item A—Identifying

described in item 3.

federal tax on fuels, etc.), but do not

Number

take into account any credit carrybacks

Include the following on an attached

to the prior year in computing the

If you are an individual, enter your social

schedule.

amount to enter on lines 4 and 5 (other

security number. Other filers must use

1. Identify each completed

than carrybacks that resulted from or

their EIN.

long-term contract by contract number,

were adjusted by the redetermination of

job name, or any other reasonable

Part I—Regular Method

your income from a long-term contract

method used in your records to identify

for look-back purposes). Include on

Use Part I only if you are not electing, do

each contract.

lines 4 and 5 any taxes (such as

not have an election in effect, or are not

2. For each contract, report in

alternative minimum tax) required to be

required to use the simplified marginal

columns for each prior year: (a) the

taken into account in the computation of

impact method as described in the

amount of income previously reported

your tax liability (as originally reported or

instructions for Part II, later.

based on estimated contract price and

as redetermined).

costs and (b) the amount of income

Filing year column

Lines 7 and 8

allocable to each prior year based on

Enter the filing year listed at the top of

actual contract price and costs. Total

For the increase or decrease in tax for

this form.

the columns for each prior year and

each prior year, interest due or to be

Columns (a) and (b)

show the net adjustment to income from

refunded must be computed at the

long-term contracts.

applicable interest rate and

Enter at the top of each column the

compounded on a daily basis, generally

3. Identify any other adjustments

ending month and year for:

from the due date (not including

that result from a change in income from

Each prior tax year in which you were

extensions) of the return for the prior

long-term contracts and show the

required to report income from the

year until the earlier of:

amounts in the columns for the affected

completed long-term contract(s) and

The due date (not including

years so that the net adjustment shown

Any other tax year affected by such

extensions) of the return for the filing

in each column on the attached

years.

year or

schedule agrees with the amounts

The date the return for the filing year

Note. If there were more than 2 prior

shown on line 2.

is filed and any income tax due for that

years, attach additional Forms 8697 as

An owner of an interest in a

year has been fully paid.

needed. On the additional Forms 8697,

pass-through entity is not required to

enter your name, identifying number,

Exceptions:

provide the detail listed in 1 and 2 above

and tax year. Complete lines 1 through

The time period for determining

with respect to prior years. The entity

8 (as applicable), but do not enter totals

interest may be different in cases

should provide the line 2 amounts with

in column (c). Enter totals only in

involving loss or credit carrybacks or

Schedule K-1 or on a separate

column (c) of the first Form 8697.

carryovers in order to properly reflect

statement for its tax year in which the

Line 1

the time period during which the

contracts are completed or adjusted.

taxpayer or IRS had use of the

Do not reduce taxable income or

Note. Taxpayers reporting line 2

hypothetical underpayment or

increase a loss on line 1 by any

amounts from more than one

overpayment. See Regulations section

carryback of a net operating loss, capital

Schedule K-1 (or a similar statement)

1.460-6(c)(4)(ii) and (iii) for additional

loss, or net section 1256 contracts loss,

must attach a schedule detailing by

information.

except to the extent that carrybacks

entity the net change to income from

If a net operating loss, capital loss,

must be taken into account to properly

long-term contracts.

net section 1256 contracts loss, or

compute interest under section 460.

credit carryback is being increased or

Line 3

Line 2

decreased as a result of the adjustment

If line 3 results in a negative amount, it

made to net income from long-term

In each column, show a net increase to

represents a look-back net operating

contracts, the interest due or to be

income as a positive amount and a net

loss (NOL). The adjustment in line 2

refunded must be computed on the

decrease to income as a negative

either created, increased, or decreased

increase or decrease in tax attributable

amount.

the net operating loss. The change in

to the change to the carryback only from

the amount of the net operating loss

In figuring the net adjustment to be

the due date (not including extensions)

would be carried back or forward to the

entered in each column on line 2, be

of the return for the prior year that

appropriate tax year and the

sure to take into account any other

generated the carryback and not from

hypothetical tax would be recomputed

income and expense adjustments that

the due date of the return for the year in

in the carryback/forward year. See

may result from the increase (or

which the carryback was absorbed. See

Regulations section 1.460-6(c)(3)(v).

decrease) to income from long-term

section 6611(f).

However, the computation period for

contracts (for example, a change to

In the case of a decrease in tax on

computing interest on NOLs is different.

adjusted gross income affecting medical

line 6, if a refund has been allowed for

See the exceptions listed on lines 7 and

expenses under section 213). If there

any part of the income tax liability shown

8 below.

are no adjustments besides the

on line 5 for any year as a result of a net

look-back adjustments, the sum of all

-4-

Instructions For Form 8697 (Rev. 2013) Page 4

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