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Form 8964-TRA: Section 987 Transition Information
IRS Form 8964-TRA is used to report section 987 transition information for owners of a Qualified Business Unit (QBU). This form must be filed in the first tax year beginning after December 31, 2024.
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IRS Form 8964-TRA - Section 987 Transition Information
IRS Form 8964-TRA is used to report section 987 transition information for owners of a Qualified Business Unit (QBU). This form must be filed in the first tax year beginning after December 31, 2024.
Risk Radar
Scan points- 1If a schedule is required but all reportable amounts are zero, the schedule MUST still be filed with at least one zero amount.
- 2Filing a single Form 8964-TRA when multiple QBUs require separate filings.
- 3Omitting required information from a section because it exceeds space, instead of completing all entry spaces.
- 4Not completing Part II when an eligible pretransition method was applied (or vice versa).
- 5Failing to attach the form to the corresponding income tax return or exempt organization return.
Plain English
This form helps taxpayers show how they are switching their accounting method for Section 987 gain or loss. It documents the necessary transition rules when moving from an old way of tracking this income/loss to the new IRS prescribed method. An owner must use Form 8964-TRA to report these specific changes.
Submission Date
- Filing date: 2026-01-12 10:10:42
- 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 reporting the section 987 transition information required by Regulations section 1.987-10(k) for an owner of a Qualified Business Unit (QBU).
- Do not use it when you are filing for a partnership or S corporation, as these entities are not required to file Form 8964-TRA.
- Check Form 8964-ELE instead when electing to treat all section 987 QBUs with the same functional currency.
Form selector
Use this form or another form?
Owner of a terminating QBU
Must complete it specifically for that unit.
✓ Check Part I box for the terminating QBU.
Deferral event or outbound loss occurred before transition date
The owner must file regarding the specific deferral/outbound loss QBU.
✓ Ensure the correct QBU is identified in Part I.
Owner of a section 987 QBU on transition date
Must complete it for the tax year beginning on the transition date.
✓ File with the return for that specific tax year.
Deadline or filing window
Form 8964-TRA should generally be filed for the tax year that begins on the transition date. For owners of terminating QBUs, the form must be filed in the first tax year beginning after December 31, 2024. The filing deadline is tied to the due date of the associated income tax return (or exempt organization return).
Checklist
What you need before filling it out
Owner of Section 987 QBU
Must complete Form 8964-TRA · Instructions p.1
Tax Year Start Date
The tax year beginning on the transition date · Instructions p.1
QBU Definition
Any separate and clearly identified unit of trade or business with maintained records · Instructions p.1
Filer Requirement Exception
Partnership or S corporation · Instructions p.1
Adjustment Amount
Enter amount of adjustments to prevent duplications or omissions under Regulations section 1.987-10(j) · Form p.1, Line 7/8
Filing Location/Method
Attach to income tax return (or exempt organization return) and file by due date · Instructions p.1 / When and Where To File section
Before you submit
- 1Complete a separate Form 8964-TRA for each applicable QBU.
- 2Check the appropriate box in Part I corresponding to the filer/QBU status.
- 3If filing for a terminating QBU, ensure it is filed in the first tax year beginning after December 31, 2024.
- 4Ensure that if any schedule is required but all reportable amounts are zero, the schedule is still included with one or more zero amounts.
- 5For adjustments (Line 7/8), attach a statement detailing the description and amount of those adjustments.
- 6Attach Form 8964-TRA to your income tax return (or exempt organization return).
- 7File both the form and the return by the due date (including extensions) for that return.
How to file this form
- 1Complete a separate Form 8964-TRA for each applicable Qualified Business Unit (QBU), ensuring an owner fills it out.
- 2Check the appropriate box in Part I to identify the filer's status (e.g., QBU Owner, Deferral QBU Owner).
- 3Attach a statement detailing any adjustments required under Regulations section 1.987-10(j) and enter the corresponding amount on Form 8964-TRA.
- 4Attach the completed Form 8964-TRA to your income tax return (or exempt organization return) and file both by the due date.
Known limitations
- 1Form 8964-TRA must be completed separately for each applicable Qualified Business Unit (QBU) of a taxpayer.
- 2The form is required for any taxpayer that has a qualified business unit (QBU) with a functional currency other than the dollar.
- 3If an owner is terminating a QBU, they must complete Form 8964-TRA specifically for that terminating QBU.
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 (12-2025). For the latest information, filers should visit IRS.gov/Form8964TRA; this page notes that on December 11, 2024, final regulations were issued under section 987 of the Internal Revenue Code.
What changed or needs a fresh check
- Edition date — confirm the revision date reads 12/2025.
- Form Number — confirm the form number is Form 8964-TRA.
- Mailing address — note that forms should not be sent to IRS's main address, but rather filed by the return due date.
- Signature — confirmation of required signatures is not stated in the source, but filing implies owner completion.
- Tax Year Start Date — confirm the form is being filed for a tax year beginning on the transition date (unless terminating).
- QBU Identification — confirm that a separate Form 8964-TRA is completed for each applicable QBU.
Quick Facts
Downloads
After you file
- 1Keep a copy of the filed Form 8964-TRA with your tax return.
- 2When filing computer-generated versions, attach an approval letter to Form 8964-TRA unless the form is identical to the IRS-prescribed version.
- 3If you determine the filed Form 8964-TRA is incorrect or incomplete, file a corrected Form 8964-TRA along with an amended tax return.
- 4When filing corrections, enter “Corrected” at the top of the form and attach a statement detailing the changes.
Sources
- SRCInstructions p.1 — The purpose of Form 8964-TRA is to report the section 987 transition information required under Regulations section 1.987-10(k).
- SRCInstructions p.1 — Form 8964-TRA should be filed for the tax year beginning on the transition date.
- SRCInstructions p.1 — The owner of a terminating QBU must complete Form 8964-TRA with respect to that specific QBU.
- SRCInstructions p.1 — Form 8964-TRA should be filed in the first tax year beginning after December 31, 2024.
- SRCInstructions p.2 — A Qualified Business Unit (QBU) is generally defined as any separate and clearly identified unit of a trade or business of a taxpayer provided that separate books and records are maintained.
- SRCInstructions p.3 — When translating a foreign currency amount into U.S. dollars, the exchange rate must be reported as the units of foreign currency that equal one U.S. dollar, rounded to at least four places.
Common confusion points
What exchange rate should I use when translating foreign currency amounts into U.S. dollars?
The exchange rate must be reported as the units of foreign currency that equal one U.S. dollar, rounded to at least four places.
→ Ensure you do not report it as the number of U.S. dollars equaling one unit of foreign currency.
What is a Qualified Business Unit (QBU)?
A QBU is generally defined as any separate and clearly identified unit of a trade or business of a taxpayer, provided that separate books and records are maintained.
→ Check your business structure to confirm if the unit meets this definition.
When do I file Form 8964-TRA?
It must be filed in the first tax year beginning after December 31, 2024.
→ If you have a terminating QBU, ensure it is included in that specific filing period.
What happens if my required schedule has zero amounts for all items?
The schedule should still be filed even if all reportable amounts are zero.
→ Do not omit the schedule entirely; file it with one or more zero entries.
How do I handle information that exceeds the space provided in a section on Form 8964-TRA?
Complete all entry spaces within the section first, and then attach any remaining information on additional sheets.
→ Avoid writing only “See attached” in the section box.
What is the owner functional currency net value adjustment?
It is the difference between (i) the basis of the QBU’s assets minus liabilities translated at the transition exchange rate, and (ii) the basis of the QBU's assets reduced by liabilities translated into the owner's functional currency.
→ Confirm this calculation matches the method prescribed by section 987 regulations.
Workflow map
Related forms and next steps
Before
Current
After
Often used with
⚠ If something goes wrong
- A corrected Form 8964-TRA must be filed with an amended tax return.
Questions about IRS Form 8964-TRA
What is IRS Form 8964-TRA used for?
This form helps taxpayers show how they are switching their accounting method for Section 987 gain or loss. It documents the necessary transition rules when moving from an old way of tracking this income/loss to the new IRS prescribed method. An owner must use Form 8964-TRA to report these specific changes.
Who must file IRS Form 8964-TRA?
An owner must complete Form 8964-TRA with respect to a section 987 QBU if they owned it on the transition date. A deferral QBU owner or an outbound loss QBU owner must also complete this form if their respective event occurred before the transition date.
What information does IRS Form 8964-TRA require?
Part I identifies the general information, such as the type of QBU and whether a fresh start method was applied. Part II details Pretransition Gain or Loss for owners who used an eligible pretransition method, while Part III is completed when no eligible pretransition method was applied.
When is IRS Form 8964-TRA due?
Generally, Form 8964-TRA should be filed for the tax year beginning on the transition date. If the QBU is terminating, it must be filed in the first tax year beginning after December 31, 2024.
Where do I file IRS Form 8964-TRA?
The taxpayer attaches Form 8964-TRA to their income tax return and files both by that return's due date (including extensions). The form can be sent to the Internal Revenue Service at 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224.
How do I complete IRS Form 8964-TRA?
The filer must complete a separate Form 8964-TRA for each applicable QBU. If an eligible pretransition method was used, the owner completes Part II; otherwise, they complete Part III. All required information must be entered into the section fields rather than just stating 'See attached' and attaching documents.
What happens if IRS Form 8964-TRA is filed incorrectly?
If Form 8964-TRA is filed incorrectly or incompletely, a corrected version must be submitted with an amended tax return using the instructions for that original return. Failure to file correctly means the owner's obligation to state transition information under Regulations section 1.987-10(k) may not be satisfied.
What exchange rate should I use when translating foreign currency amounts into U.S. dollars?
The exchange rate must be reported as the units of foreign currency that equal one U.S. dollar, rounded to at least four places. Ensure you do not report it as the number of U.S. dollars equaling one unit of foreign currency.
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