If you were an owner of an interest in a pass-through entity that has depreciated one or more properties under the income forecast method, enter your tax year that ends with or includes the end of the entity's recomputation year.

Enter the name shown on your Federal income tax return for the recomputation year. If you are an individual filing a joint return, also enter your spouse's name as shown on Form 1040.

Enter your address only if you are filing this form separately. Include the apartment, suite, room, or other unit number after the street address.

If you are an individual, enter your social security number. Other filers must use their EIN.

Enter at the top of each column the ending month and year for:

Do not reduce taxable income or increase a loss on line 1 by any carryback of a net operating loss, net section 1256 contracts loss, or capital loss, except to the extent that carryback resulted from or was adjusted by the redetermination of depreciation under the income forecast method for look-back purposes.

In each column, show a net increase to taxable income as a positive amount and a net decrease as a negative amount.

In figuring the net adjustment to be entered in each column on line 2, be sure to take into account any other income and expense adjustments that may result from the increase (or decrease) to depreciation under the income forecast method (for example, for an individual, a change to adjusted gross income may affect charitable contributions or medical expenses).

Include the following on an attached schedule.

An owner of an interest in a pass-through entity is not required to provide the detail listed in 1 and 2 with respect to prior years. The entity should provide the line 2 amounts with Schedule K-1 or on a separate statement for its recomputation year.

Reduce the tax liability to be entered on lines 4 and 5 by allowable credits (other than refundable credits, for example, the credit for taxes withheld on wages, the earned income credit, the additional child tax credit, the credit for Federal tax paid on fuels, etc.), but do not take into account any credit carrybacks to the prior year in computing the amount to enter on lines 4 and 5 (except to the extent of carrybacks that resulted from or were adjusted by the redetermination of depreciation for look-back purposes). Include on lines 4 and 5 any taxes (such as alternative minimum tax) required to be taken into account in the computation of your tax liability (as originally reported or as redetermined).

Pass-through entities. Multiply the amount on line 2 by the applicable regular tax rate for each prior year shown in column (a), (b), or (c). The applicable regular tax rate is as follows.

For the increase or decrease in tax for each prior year, interest due or to be refunded must be computed at the adjusted overpayment rate determined under section 460(b)(7) and compounded on a daily basis, generally from the due date (not including extensions) of the return for the prior year until the earlier of:

You must determine the adjusted overpayment rate for each interest accrual period. The interest accrual period starts on the day after the return due date (not including extensions) for each prior tax year and ends on the return due date for the following tax year. The adjusted overpayment rate in effect for the entire interest accrual period is the overpayment rate determined under section 6621(a)(1) for the calendar quarter in which the interest accrual period begins. Taxpayers other than corporations use Table 1 on this page to figure the interest for each interest accrual period that began during the applicable period shown in the table. Corporations generally use Table 2, for each interest accrual period that began during the applicable period shown in that table on page 4, but must use Table 3 to figure the interest on any portion of the increase or decrease in tax exceeding $10,000.

Tables of interest factors to compute daily compound interest were published in Rev. Proc. 95-17, 1995-1 C.B. 556. The overpayment rate in effect for each calendar quarter in which an interest accrual period begins and the table and corresponding page number in 1995-1 C.B. for calendar quarters through September 30, 2005, are shown in Table 1 below and in Tables 2 and 3 on page 4.

For periods beginning after September 30, 2005, use the applicable overpayment rate under section 6621(a)(1) in the revenue rulings published quarterly in the Internal Revenue Bulletin.

Additional interest to be refunded for periods after the due date of the return, if any, will be computed by the IRS and included in your refund. Report the amount on line 9 (or the amount refunded by the IRS if different) as interest income on your income tax return for the tax year in which it is received or accrued.

Corporations (other than S corporations) may deduct this amount (or the amount computed by the IRS if different) as interest expense for the tax year in which it is paid or incurred. For individuals and other taxpayers, this interest is not deductible.