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only in column (d) of the first Form

g. Tax years beginning in 2002

38.6%

Line 5

8697.

h. Tax years beginning in 2003

If both lines 2 and 4 are negative, enter

or later . . . . . . . . . . . . . . . . . .

35%

whichever amount is greater. Treat both

Line 1

numbers as positive when making this

2. Corporations (other than S

In each column, show a net increase to

comparison, but enter the amount as a

corporations) and pass-through entities

income as a positive amount and a net

negative number. (If the amount on one

not included in 1 above:

decrease to income as a negative

line is negative, but the amount on the

amount.

other line is positive, enter the positive

amount.)

On an attached schedule:

a. Tax years ending before July 1,

•

Identify each completed long-term

1987 . . . . . . . . . . . . . . . . . . . .

46%

contract by contract number, job name,

Lines 8 and 9

b. For tax years beginning before

or any other reasonable method used

July 1, 1987, that include July 1,

For the increase (or decrease) in tax for

in your records to identify each

1987, the rate is 34% plus the

each prior year, interest due or to be

contract; and

following:

•

For each contract, report in columns

refunded must be computed at the

for each prior year: (a) the amount of

applicable interest rate and

Number of days in tax year before 7/1/87

income previously reported based on

compounded on a daily basis from the

12%

estimated contract price and costs and

Number of days in tax year

due date (not including extensions) of

(b) the amount of income allocable to

the return for the prior year until the

each prior year based on actual

c. Tax years beginning after

earlier of:

contract price and costs. Total the

June 30, 1987, and ending

•

The due date (not including

columns for each prior year and show

before 1993 . . . . . . . . . . . . . .

34%

extensions) of the return for the filing

the net adjustment to income from

d. For tax years beginning

year or

long-term contracts.

before 1993 that include January

•

1, 1993, the rate is 34% plus the

The date the return for the filing year

An owner of an interest in a

following:

is filed and any income tax due for that

pass-through entity is not required to

year has been fully paid.

provide the detailed schedule listed

above for prior years. The entity should

Number of days in tax year after 12/31/92

provide the line 1 amounts with

See Applicable Interest Rates in the

Number of days in tax year

Schedule K-1 or on a separate

instructions for Part I, lines 7 and 8,

statement for its tax year in which the

earlier.

e. Tax years beginning after

contracts are completed or adjusted.

1992 . . . . . . . . . . . . . . . . . . .

35%

Note. Taxpayers reporting line 1

Line 10

amounts from more than one Schedule

Line 3

See the instructions for Part I, line 9,

K-1 (or a similar statement) must attach

earlier.

a schedule detailing by entity the net

See the instructions for Part II, line 1,

change to income from long-term

on this page and complete line 3 in the

contracts.

same manner, using only income and

Line 11

deductions allowed for alternative

See the instructions for Part I, line 10,

Line 2

minimum tax (AMT) purposes.

earlier.

Multiply the amount on line 1 by the

Line 4

applicable regular tax rate for each prior

Table 1

year shown in column (a), (b), or (c).

Multiply the amount on line 3 by the

Interest Rates for Non-corporate

The applicable regular tax rate is as

applicable AMT rate, which is as

Taxpayers

follows:

1. Individuals and pass-through

From

Through

Rate

Table

Page

1. Individuals and pass-through

1/1/04

3/31/04

615

entities in which, at all times during the

4/1/04

6/30/04

617

year, more than 50% of the interests in

7/1/04

9/30/04

615

the entity are held by individuals directly

10/1/04

12/31/04

617

or through other pass-through entities:

1/1/05

3/31/05

569

or through other pass-through entities:

4/1/05

9/30/05

571

10/1/05

6/30/06

573

a. Tax years beginning before

a. Tax years beginning in

7/1/06

12/31/07

575

1987 . . . . . . . . . . . . . . . . . . .

50%

1987 through 1990 . . . . . . .

21%

1/1/08

3/31/08

621

b. Tax years beginning in 1987

38.5%

b. Tax years beginning in

4/1/08

6/30/08

619

c. Tax years beginning in 1988,

1991 or 1992 . . . . . . . . . . .

24%

7/1/08

9/30/08

617

1989, or 1990 . . . . . . . . . . . . .

28%

10/1/08

12/31/08

619

c. Tax years beginning in

d. Tax years beginning in 1991

1/1/09

3/31/09

569

1993 or later . . . . . . . . . . . .

28%

4/1/09

12/31/10

567

or 1992 . . . . . . . . . . . . . . . . .

31%

1/1/11

3/31/11

565

e. Tax years beginning in 1993

2. Corporations (other than S

4/1/11

9/30/11

567

through 2000 . . . . . . . . . . . . . 39.6%

corporations) and pass-through

10/1/11

3/31/12

565

f. Tax years beginning in 2001

39.1%

entities not included in 1 above

20%

-6-

Instructions For Form 8697 Draft (Rev. December 2011) - Interest Computation Under The Look-Back Method For Completed Long-Term Contracts Page 6

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