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Form 8866: Interest Computation Under the Look-Back Method for Property Depreciated Under the Income Forecast Method
IRS Form 8866 is used for Interest Computation Under the Look-Back Method for Property Depreciated Under the Income Forecast Method. Generally, a filer must use this form for each recomputation year if the property's unadjusted basis was over $100,000 at year-end.
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IRS Form 8866 - Interest Computation Under the Look-Back Method for Property Depreciated Under the Income Forecast Method
IRS Form 8866 is used for Interest Computation Under the Look-Back Method for Property Depreciated Under the Income Forecast Method. Generally, a filer must use this form for each recomputation year if the property's unadjusted basis was over $100,000 at year-end.
Risk Radar
Scan points- 1Do not forget to sign both spouses on Form 8866 if filing a joint return.
- 2Filing when interest should be refunded without filing separately with the IRS.
- 3Not signing both spouses on Form 8866 if filing a joint return.
- 4Completing Line 1 of a corrected Form 8866 using adjusted taxable income from Line 3 of the original.
- 5Failing to include interest due in the appropriate line on your specific tax return (e.g., Schedule 2, Part II, line 17n).
Plain English
This form helps calculate how much interest is owed or refunded when using the look-back method for certain depreciated assets. It applies to properties that were put into service after September 13, 1995, and are depreciated under the income forecast method. The IRS needs this information to ensure correct tax interest amounts are accounted for.
Submission Date
- Filing date: 2026-01-23 16:10:35
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use this form when calculating interest due or to be refunded under the look-back method of section 167(g)(2) for property placed in service after September 13, 1995, that is depreciated using the income forecast method.
- Do not use Form 8866 if the property had an unadjusted basis (total capitalized cost) of $100,000 or less at the end of the recomputation year.
- Check for specific inclusion requirements on your tax return, such as Schedule 2 (Form 1040), line 17n, when filing Form 8866.
Form selector
Use this form or another form?
Owe Interest
Include interest due in the appropriate line on your return.
✓ Check Schedule 2 (Form 1040) for specific lines.
Refund Due
Do not attach Form 8866 to your income tax return when filing this form separately with the IRS.
✓ Ensure you use the correct mailing address based on filer type.
S Corporations
Include interest due in the amount entered for additional taxes (e.g., line 23c).
✓ Write 'From Form 8866' next to the amount on the dotted line.
Deadline or filing window
Filing is required by the date you are required to file your income tax return, including extensions. The interest computation period generally runs from the due date (not including extensions) of the prior year's return until the earlier of: the due date (not including extensions) of the recomputation year's return, or the date that year's return is filed and all its income tax has been fully paid.
Checklist
What you need before filling it out
General Rule
Property placed in service after 9/13/1995, depreciated under income forecast method · Instructions p.1
Exception Threshold
Unadjusted basis of $100,000 or less at end of recomputation year · Instructions p.1
Interest Owed Filing
Attach Form 8866 to income tax return · Instructions p.2
Refund Due Filing
File Form 8866 separately with IRS · Instructions p.2
Individuals Mailing Address
Philadelphia, PA 19255-0001 · Instructions p.2
Partnerships Check Info
EIN, daytime phone number, and 'Form 8866 Interest' · Instructions p.2
Before you submit
- 1Fill in the recomputation year at the top of Form 8866.
- 2Complete all identifying information (Name, Address, Identifying Number) on Form 8866.
- 3Check the appropriate box to show your type of taxpayer on Form 8866.
- 4If owed interest, ensure you attach Form 8866 to your income tax return.
- 5If refunded interest is due, ensure you file Form 8866 separately with the IRS (do not attach it).
- 6Sign Form 8866 if filing as an individual or joint filer.
- 7If paying by check/money order, verify that the partnership’s EIN and daytime phone number are written on the payment.
How to file this form
- 1Complete all required fields on Form 8866, including specifying the recomputation year at the top.
- 2Determine if interest is owed or to be refunded based on your calculations using Form 8866.
- 3If you owe interest, attach Form 8866 to your income tax return and include the amount in the appropriate line (e.g., Schedule 2 for individuals).
- 4If interest is to be refunded, file Form 8866 separately with the IRS at the applicable address.
- 5Sign Form 8866 if filing as an individual or joint filer, and complete the paid preparer section if applicable.
- 6Attach separate sheets to the back of Form 8866 if more space is needed, ensuring your name/ID number are on each sheet.
- 7Mail or submit Form 8866 following the specific instructions for your tax return (e.g., follow amended return instructions if correcting a prior filing).
Known limitations
- 1The look-back method does not apply for property that had an unadjusted basis (total capitalized cost) of $100,000 or less at the end of the recomputation year.
- 2Generally, only the taxpayer that depreciated the property under the income forecast method in a year where an overpayment occurred may request a refund of interest on that overpayment.
- 3The income forecast method generally is limited to depreciation for motion picture films, video tapes, sound recordings, copyrights, books, and patents.
Field map
Compact field-by-field guide
Entity Info
1 items
Name and taxpayer ID of the entity claiming the credit.
Credit Info
1 items
Type of credit or incentive being claimed.
Calculation
2 items
The base amount used to calculate the credit.
Calculated credit amount after applying formulas and limitations.
Certification
1 items
Detailed breakdown supporting the credit calculation.
Signatures
1 items
Sign and date the form.
Almost done reviewing the fields?
Fillable formOpen in Editor->The current edition is December 2025, and users should refer to IRS.gov/Form8866 for the latest information regarding developments related to Form 8866.
What changed or needs a fresh check
- Edition date — confirm the revision reads December 2025.
- IRS Website — confirm instructions and latest information are available at www.irs.gov/Form8866.
- Filing Status — confirm if you or your spouse must sign, especially for joint returns.
- Preparer Completion — confirm the paid preparer section is completed if applicable.
- Interest Payable Check — confirm the check is made payable to 'United States Treasury' for full amount.
Quick Facts
Downloads
After you file
- 1Attach Form 8866 to the income tax return if interest is owed or no interest is to be refunded.
- 2Keep a copy of Form 8866 and any attached schedules for records.
- 3File Form 8866 by the date required to file the income tax return (including extensions).
- 4If filing an additional Form 8866, sign only the first one submitted.
- 5When correcting Form 8866, do not enter the adjusted taxable income from line 3 of the original form on line 1 of the corrected form.
- 6If both original and corrected forms show interest you owe, file an amended income tax return following its instructions.
Sources
- SRCInstructions p.1 — Use Form 8866 to figure the interest due or to be refunded under section 167(g)(2) for property placed in service after September 13, 1995.
- SRCInstructions p.1 — Generally, you must file Form 8866 for each recomputation year if the property is depreciated under the income forecast method.
- SRCInstructions p.1 — The look-back method does not apply if the unadjusted basis of the property was $100,000 or less at the end of the recomputation year.
- SRCInstructions p.2 — If you owe interest, attach Form 8866 to your income tax return; signing is not required.
- SRCInstructions p.2 — For partnerships, include any interest due on Form 1065, line 25.
- SRCInstructions p.2 — File Form 8866 by the date you are required to file your income tax return (including extensions).
- SRCInstructions p.2 — If both original and corrected Forms 8866 show interest owed, file an amended income tax return following its instructions.
- SRCInstructions p.1 — The income forecast method generally applies to motion picture films, video tapes, sound recordings, copyrights, books, and patents.
Common confusion points
Do I have to sign Form 8866 if I am filing it?
The paid preparer section does not need to be completed on Form 8866.
What do I do when both my original and corrected Forms 8866 show interest you owe?
If my original form shows interest owed but the corrected form shows a refund, what is the filing procedure?
When completing line 5 of a corrected Form 8866, what amount should I exclude from the total tax calculation?
Should I write 'Amended' on the top margin if both forms show interest to be refunded?
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Questions about IRS Form 8866
What is IRS Form 8866 used for?
This form helps calculate how much interest is owed or refunded when using the look-back method for certain depreciated assets. It applies to properties that were put into service after September 13, 1995, and are depreciated under the income forecast method. The IRS needs this information to ensure correct tax interest amounts are accounted for.
Who must file IRS Form 8866?
Generally, a filer must use Form 8866 to figure interest under the look-back method for each recomputation year for property placed in service after September 13, 1995, that is depreciated under the income forecast method. An exception exists if the property's unadjusted basis (total capitalized cost) was $100,000 or less at the end of the recomputation year.
What information does IRS Form 8866 require?
The form collects information necessary to compute interest for prior years. Specific details include identifying the applicable tax rates (e.g., 35% in 2017 or earlier vs. 21% in 2018 or later) and detailing the increase or decrease in tax for each prior year on lines 7 and 8.
When is IRS Form 8866 due?
A filer must file Form 8866 by the date they are required to file their income tax return, including extensions. If additional Forms 8866 are needed (to show more than 2 prior tax years), only the first Form 8866 needs to be signed.
Where do I file IRS Form 8866?
If interest is to be refunded to a filer, they should file Form 8866 separately with the IRS. Individuals must send it to Philadelphia, PA 19255-0001; all other filers must send it to Cincinnati, OH 45999-0001.
How do I complete IRS Form 8866?
The filing sequence requires completing all necessary fields first. If you owe interest, attach Form 8866 to your return; if refunded, file it separately with the IRS. Regardless of payment method, the Signatures section must be completed according to instructions for your income tax return, and a paid preparer must also complete this section.
What happens if IRS Form 8866 is filed incorrectly?
If a filer does not file Form 8866, provides fraudulent information, or fails to provide the required information when applying Section 167(g), they may forfeit any refund of interest otherwise owed and be subject to other penalties.
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