8964-TRA

Section 987 Transition Information

Agency
IRS
Revision
December 2025
Fillable fields
35
Pages
1
Official source
IRS form page
Checked
October 21, 2026
Fill 8964-TRA online
Page 1 of form 8964-TRA

Form 8964-TRA: Section 987 Transition Information

Form 8964-TRA is used to report the section 987 transition information required under Regulations section 1.987-10(k). The instructions say final regulations under section 987 were issued on December 11, 2024 (TD 10016, 89 FR 100138), and that section 987 applies to any taxpayer that has a qualified business unit (QBU) with a functional currency other than the dollar.

The transition rules address how taxpayers move from their previous methods of accounting for section 987 gain or loss to the method in the regulations. In particular, the instructions say an owner computes pretransition gain or loss for each section 987 QBU, deferral QBU and outbound loss QBU. Part I describes the prior method and the transition rates, and Parts II and III compute the pretransition gain or loss.

The form is attached to the owner's return, with a separate Form 8964-TRA for each applicable QBU. You can fill out the PDF free in your browser on this page and download it without an account.

Top of page 1 of Form 8964-TRA: Section 987 Transition Information, as printed by IRS

What's on Form 8964-TRA

Identifying information

The QBU's tax year, the filer's name and identifying number, and the QBU's name, identifying number and reference ID number.

Part I: prior method

A description of the prior method used for section 987 gain or loss and whether it was an eligible pretransition method, plus four boxes for the owner type.

Part I: date and rates

The transition date under Regulations section 1.987-10(c), the transition exchange rate and the pretransition translation rate.

Part II: eligible pretransition method

Lines 1 to 8 for an owner that applied an eligible pretransition method, from the deemed termination amount to adjustments under 1.987-10(j).

Part III: no eligible method

Lines 1 to 8 for an owner that did not apply an eligible pretransition method, starting from the sum of annual unrecognized section 987 gain or loss.

How to fill out Form 8964-TRA

  1. 1

    Tax year and names

    Enter the QBU's tax year, which the instructions say is the tax year of the owner. If a name changed within the past 3 years, show the prior name in parentheses after the current name.

  2. 2

    Part I description and box

    Describe the prior method and check the owner box. For a QBU under the small business election, explain why in Part I and skip Parts II and III. For the fresh start method, complete only line 8 in Part II.

    Part I description and box on page 1 of Form 8964-TRA: Section 987 Transition Information, as printed by IRS
  3. 3

    Transition date and rates

    The transition date is generally the first day of the first tax year beginning after December 31, 2024, or the day after termination for a terminating QBU. Rates use a divide-by convention rounded to at least four places.

  4. 4

    Part II

    Used when the owner applied an eligible pretransition method. An owner of a section 987 QBU completes lines 1 to 5 and 8, a deferral QBU owner lines 6 and 8, and an outbound loss QBU owner lines 7 and 8.

  5. 5

    Part III

    Used when no eligible method was applied. A section 987 QBU owner completes lines 1 to 3 and 8, a deferral QBU owner lines 1 to 5 and 8, and an outbound loss QBU owner lines 1 to 3 and 6 to 8. Lines 1 and 2 need attached statements by year.

  6. 6

    Line 8 and attachments

    In either part, line 8 holds adjustments to avoid duplication or omission of income under Regulations section 1.987-10(j), with a statement describing each adjustment and its amount.

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Where it goes, timing and corrections

Attach to the return

The instructions say to attach Form 8964-TRA to the income tax return (or, if applicable, exempt organization return) and file both by the due date, including extensions, for that return.

Which returns

The instructions say Form 8964-TRA can be attached to Forms 1040, 1120 and 5471.

One form per QBU

Complete a separate Form 8964-TRA for each applicable QBU, the instructions say.

Zero amounts

When a schedule is required but all reportable amounts are zero, the instructions say it should still be filed with one or more zero amounts.

Corrections

A corrected Form 8964-TRA is filed with an amended return, with "Corrected" entered at the top and a statement identifying the changes.

Recent developments

The IRS page for the form lists "Updated rules related to CFC exemption election" dated 27-AUG-2026.

Related forms

Who completes Form 8964-TRA?

  • Owners of a section 987 QBU

    An owner completes the form for a section 987 QBU it owned on the transition date, filed for the tax year beginning on the transition date.

  • Deferral and outbound loss QBU owners

    A deferral QBU owner or the owner of an outbound loss QBU completes it if the deferral event or outbound loss event occurred before the transition date.

  • Owners of a terminating QBU

    The instructions say the form is filed in the first tax year beginning after December 31, 2024, for a terminating QBU.

  • Consolidated groups

    If the filer is a domestic corporation in a consolidated group, the instructions say to list the common parent as the filer and enter its identifying information.

  • Partnerships and S corporations

    The instructions say a partnership or S corporation is not required to file Form 8964-TRA.

The instructions say the filer is generally the owner of the section 987 QBU. An owner can be a U.S. person, a controlled foreign corporation (CFC), a U.S. partnership or a foreign partnership.

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Questions about Form 8964-TRA

What is a section 987 QBU?

The instructions define it as an eligible QBU that has a functional currency different from that of its owner. A QBU is generally a separate and clearly identified unit of a trade or business with separate books and records.

Do partnerships file Form 8964-TRA?

The instructions say a partnership or S corporation is not required to file Form 8964-TRA.

Part II or Part III?

The instructions say to complete Part II if the owner applied an eligible pretransition method and Part III if it did not.

How are exchange rates entered?

With a divide-by convention rounded to at least four places, shown as the units of foreign currency that equal one U.S. dollar when translating into dollars.

When is the form filed?

Attached to the owner's return for the tax year beginning on the transition date. For a terminating QBU, the instructions say the first tax year beginning after December 31, 2024.

Where are section 987 elections made?

The instructions say all elections under the section 987 regulations are made by filing Form 8964-ELE, Section 987 Elections.