Formulář 990- T Návod
Pokyny pro formulář 990-T, osvobození od daně z příjmu od daně (a daň z příjmu právnických osob podle § 6033 [e))
Rev. 2023
Související formuláře
- Formulář 990- T - Organizace osvobození Daňové přiznání k dani z obchodního příjmu (a proxy daň podle § 6033 [e) ])
Department of the Treasury
Internal Revenue Service
2023
Instructions for Form 990-T
Exempt Organization Business Income Tax Return (and Proxy Tax Under Section
6033(e))
Section references are to the Internal Revenue Code unless
What's New
otherwise noted.
Required electronic filing. If you are an organization or trust
Contents
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defined in section 511 and need to file Form 990-T, you are
required to file electronically. See When, Where, and How To
File, later, for more information.
Tax-exempt and governmental entities. For tax years
beginning after 2022, applicable entities (such as certain
tax-exempt and governmental entities) can elect to treat certain
general business credits as a payment of income tax. See
Applicable Entity Making an Elective Payment Election on IRA
2022 Credits, later.
Section 6417(d)(1)(A) applicable entity. Form 990-T, Item G
has been updated with a checkbox for applicable entities that
are not normally required to file an annual tax return and are
filing Form 990-T to make an elective payment election under
section 6417.
Part IV. Statements Regarding Certain Activities
Advanced manufacturing investment credit. Eligible filers
may elect to treat the advanced manufacturing investment credit
with respect to a facility as a payment of income tax under
section 48D(d). See section 48D and the Instructions for Form
3468.
Alternative minimum tax. The Inflation Reduction Act of 2022
(IRA 2022) amended section 55 to impose a new corporate
alternative minimum tax (CAMT) based on the adjusted financial
statement income (AFSI) of an applicable corporation. See Form
4626, Alternative Minimum Tax-Corporations, and its
Instructions, for more information.
Part VI. Interest, Annuities, Royalties, and Rents
General Instructions
Part VII. Investment Income of a Section 501(c)(7),
Purpose of Form
Use Form 990-T and Schedule A (as applicable) to:
Part VIII. Exploited Exempt Activity Income, Other
Report unrelated business income;
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Figure and report unrelated business income tax liability;
Report proxy tax liability;
Claim a refund of income tax paid by a regulated investment
Part X. Compensation of Officers, Directors, and
company (RIC) or a real estate investment trust (REIT), on
undistributed long-term capital gain;
Request a credit for certain federal excise taxes paid for small
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employer health insurance premiums paid, and
Make (along with filing Form 3800 and the applicable general
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business credit form(s)) an elective payment election under
section 48D or section 6417.
Appendix C. Public Inspection of Form 990-T
Who Must File
Organizations With Current Unrelated Business
Taxable Income (UBTI)
Returns Filed by Section 501(c)(3)
Future Developments
Any disregarded entity, domestic, or foreign organization
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exempt under section 501(a), section 529(a), or section 529A(a),
if it has gross income of $1,000 or more from a regularly
For the latest information about developments related to Form
990-T and its instructions, such as legislation enacted after they
conducted unrelated trade or business (see Regulations section
1.6012-2(e)). Gross income is gross receipts minus the cost of
goods sold, (see Regulations section 1.61-3). For a discussion
Jan 24, 2024
Cat. No. 11292U
of cost of goods sold, see Schedule A (Form 990-T), Part III.
Cost of Goods Sold, later.
Alaska Native Corporations,
The Tennessee Valley Authority,
Rural electric cooperatives, and
Other tax-exempt entities.
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The gross receipts from a gaming business include all
amounts wagered in games, not just the net proceeds
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CAUTION
after payment of prizes and other expenses. Cash prizes
Proposed regulations have been published that provide a
aren't included in cost of goods sold, but are reported on
Schedule A, Part II, line 14, as other deductions.
more detailed definition of an applicable entity. Entities may rely
on the definitions in the proposed regulations for tax years
ending before final regulations are published, provided the entity
follows the proposed regulations in their entirety and in a
consistent manner with respect to all elections made under
A disregarded entity, as described in Regulations
sections 301.7701-1 through 301.7701-3, is treated as a
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CAUTION
branch or division of its parent organization for federal
tax purposes. Therefore, financial information applicable to a
disregarded entity must be reported as the parent organization's
financial information.
The detailed description in the proposed regulations includes
the following.
An organization exempt from the tax imposed by subtitle A by
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Colleges and universities of states and other governmental
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reason of section 501(a);
The government of an U.S. territory or political subdivision or
units, and subsidiary corporations wholly owned by such
colleges and universities. However, a section 501(c)(1)
corporation that is an instrumentality of the United States and
both organized and exempt from tax by an Act of Congress
doesn’t have to file.
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instrumentality thereof;
Any State, the District of Columbia, or a political subdivision or
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instrumentality thereof;
The Tennessee Valley Authority;
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Qualified tuition programs described under section 529 that
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An Indian tribal government or a subdivision or instrumentality
have $1,000 or more of unrelated trade or business gross
income.
thereof;
Any Alaska Native Corporation (as defined in section 3 of the
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Qualified ABLE programs described under section 529A that
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Alaska Native Claims Settlement Act (43 U.S.C. 1602(m))); and
have $1,000 or more of unrelated trade or business gross
income.
Any corporation operating on a cooperative basis that is
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engaged in furnishing electric energy to persons in rural areas.
Pre-filing registration requirement. Before you file Form
990-T, if you intend to make an elective payment election on
Form 3800, you must complete a pre-filing registration for each
5884, Inflation Reduction Act (IRA) and CHIPS Act of 2022
(CHIPS) Pre-Filing Registration Tool. Also see Registering For
and Making Elective Payment and Transfer Elections in the
Instructions for Form 3800.
Trustees for the following trusts that have $1,000 or more of
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unrelated trade or business gross income.
1. Individual retirement accounts (IRAs), including traditional
IRAs described under section 408(a).
2. Simplified employee pension IRAs (SEP IRAs) described
under section 408(k).
3. Savings incentive match plan for employees of small
employers IRAs (SIMPLE IRAs) described under section 408(p).
4. Roth IRAs described under section 408A.
5. Coverdell education savings accounts (ESAs) described
under section 530.
Organizations With or Without Current UBTI
6. Archer medical savings accounts (Archer MSAs) described
under section 220.
Elective payment election. Applicable entities making an
elective payment election with respect to applicable credits (see
section 6417), and eligible taxpayers making an elective
payment election with respect to the advanced manufacturing
investment credit under section 48D.
7. Health savings accounts (HSAs) described under section 223.
Each account of a type listed above is treated as a
separate trust for unrelated business income tax
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CAUTION
purposes (even if there is a single owner or beneficiary
Organizations making an elective payment election must
complete and attach Form 3800, General Business Credit, as
well as the required form(s) on which you compute each
individual credit. If your organization is filing Form 990-T only to
make the elective payment election, see Elective Payment
Election under Which Parts to Complete, later.
Proxy tax. Organizations liable for the proxy tax on lobbying
and political expenditures. See Part II, Line 3. Proxy Tax, later, for
a discussion of the proxy tax. If your organization is only required
to file because of the proxy tax, see Proxy tax only under Which
Parts To Complete, later.
Other taxes or amounts. Organizations that are liable for
other taxes (such as tax deferred under section 1291 (Form
990-T, Part II, line 4) or section 1294 (Part III, line 4)), or
organizations liable for other amounts due (or entitled to a refund
of, or credit for other amounts such as recapture of tax credits or
interest adjustments (such as recapture of a credit or interest
due under a look-back rule (Form 990-T, Part III, line 3e)). See a
discussion of these items later. If your organization is required to
file Form 990-T only because of these taxes or other amounts,
see Other Taxes under Which Parts To Complete, later.
Qualified opportunity investment (annual report).
Organizations that deferred a capital gain into a qualified
opportunity fund (QOF) must file Form 990-T with Schedule D,
Form 8949, and Form 8997 attached. Each such organization
must file Form 990-T with Form 8997 attached annually until the
for multiple accounts) and must have its own employer
identification number (EIN) if it will file Form 990-T to report
gross unrelated business taxable income of $1,000 or more. A
custodian is treated as a trustee. See section 408(h). Individual
retirement annuities, unlike IRAs, aren't subject to unrelated
business income tax.
IRAs and other tax-exempt shareholders in a RIC or
REIT filing Form 990-T, only to obtain a refund of income
tax paid on undistributed long-term capital gains should
TIP
complete Form 990-T, as explained in IRAs and other
tax-exempt shareholders in a RIC or REIT, later.
Applicable entity making an elective payment
election on IRA 2022 credits
IRA 2022 extends, modifies, or creates several energy-related
investment and production tax credits. These credits are taken
as general business credits. IRA 2022 also created new section
6417, which permits an applicable entity to make an elective
payment election with respect to each applicable credit.
Under section 6417(d)(1)(A), applicable entities are defined
as:
State and local governments,
Indian tribal governments,
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Instructions for Form 990-T
organization disposes of the investment. See the Instructions for
Form 8997.
Other taxes. Organizations that are required to file Form
990-T only because they are liable for tax under section 1291 or
tax previously deferred under section 1294, recapture taxes, the
tax on a hospital organization’s non-compliant facility income, or
other items listed in the instructions for Part III, line 4, must
complete the following.
If you are filing Form 990-T only with regard to an
elective payment election, because of the proxy tax,
other taxes, or only to claim a refund, go directly to
TIP
Elective Payment Election Only, Proxy Tax Only, Other Taxes, or
Claim for Refund, later. If you are filing Form 990-T only to claim
the credit for small employer health insurance premiums, see the
instructions for Part III, line 6f, later.
The heading above Part I except items J and K.
The applicable lines of Parts II and III.
Signature area.
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Attach all appropriate forms and/or schedules showing the
computation of the applicable tax or taxes.
Which Parts To Complete
Other amounts due. Organizations that are required to file
Form 990-T only because they are liable for amounts due
because of the recapture of a tax credit, or other items listed in
the instructions for Part III, line 3, must complete the following.
Organizations with unrelated business taxable income.
Organizations with UBTI must complete Form 990-T, and also a
separate Schedule A (Form 990-T) for each separate unrelated
trade or business. See Regulations section 1.512(a)-6.
Complete all Schedules A (Form 990-T) first. See General
Instructions for Schedule A (Form 990-T), later.
The heading above Part I except items J and K.
The applicable lines of Parts II and III that require an entry.
Signature area.
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Attach all appropriate forms and/or schedules showing the
Consolidated returns. The consolidated return provisions of
section 1501 don't apply to exempt organizations, except for
organizations having title holding companies. If a title holding
corporation described in section 501(c)(2) pays any amount of
its net income for a tax year to an organization exempt from tax
under section 501(a) (or would, except that the expenses of
collecting its income exceeded that income), and the corporation
and organization file a consolidated return as described below,
then treat the title holding corporation as being organized and
operated for the same purposes as the other exempt
organization (in addition to the purposes described in section
501(c)(2)).
Two organizations exempt from tax under section 501(a), one
a title holding company and the other earning income from the
first, will be includible corporations for purposes of section
1504(a). If the organizations meet the definition of an affiliated
group and the other relevant provisions of chapter 6, then these
organizations may file a consolidated return. The parent
organization must attach Form 851, Affiliations Schedule, to the
consolidated return. For the first year a consolidated return is
filed or for the first year a new corporation is added to a
consolidated return, the title holding company must attach Form
1122, Authorization and Consent of Subsidiary Corporation To
Be Included in a Consolidated Income Tax Return. See
Regulations section 1.1502-100.
computation of the applicable tax or taxes.
Claim for refund (including special instructions for IRA
trustees or direct payments of certain credits). If your only
reason for filing a Form 990-T is to claim a refund or request a
credit, complete the following.
The heading above Part I except items J and K.
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Enter -0- on Part I, lines 1 and 11, and Part III, line 4.
Enter the credit or payment on Part III, lines 6a through 6g, as
appropriate.
Part III, lines 7, 10, and 11.
Signature area.
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For claims described below, follow the additional instructions
for that claim.
IRAs and other tax-exempt shareholders in a RIC or REIT.
If you are an IRA or other tax-exempt shareholder that is invested
in a RIC or a REIT and file Form 990-T only to obtain a refund of
income tax paid on undistributed long-term capital gains, follow
the steps under Claim for refund (including special instructions
for IRA trustees) above; check the applicable box in item H at the
top of Form 990-T; and attach Copy B of Form 2439, Notice to
Shareholder of Undistributed Long-Term Capital Gains.
Composite Form 990-T. If you are a trustee of more than one
IRA invested in a RIC, you may be able to file a composite Form
990-T to claim a refund of tax under section 852(b) instead of
filing a separate Form 990-T for each IRA. See Notice 90-18,
1990-1 C.B. 327, for information on who can file a composite
return. Complete the steps under Claim for refund (including
special instructions for IRA trustees) above and follow the
additional requirements in the notice.
Organizations with no UBTI. An organization with no UBTI
that needs to file Form 990-T should complete and file Form
990-T only. Such an organization does not complete or attach
Schedule A (Form 990-T) to its return.
Elective payment election only. Organizations filing with
regard to making an elective payment election and have no
unrelated business taxable income, including applicable entities
(as defined earlier) not subject to federal income tax and not
otherwise required to file any annual tax or information return,
must complete the following lines of Form 990-T.
Backup withholding. If your only reason for filing Form
990-T is to claim a refund of backup withholding, complete the
steps under Claim for refund (including special instructions for
IRA trustees) above and attach a copy of the Form 1099 showing
the withholding.
The heading area above Part I, except items B, C, E, J, K, and
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When, Where, and How To File
When To File
Part II, lines 3 and 7 (enter -0-).
Part III, lines 6g, 7, 10, and 11.
Signature area.
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15th day of 4th month or 15th day of 5th month. An
employees' trust defined in section 401(a), an IRA (including
SEPs and SIMPLEs), a Roth IRA, a Coverdell ESA, or an Archer
MSA must file Form 990-T by the 15th day of the 4th month after
the end of its tax year. All other organizations must file Form
990-T by the 15th day of the 5th month after the end of their tax
years. If the regular due date falls on a Saturday, Sunday, or legal
holiday, file no later than the next business day. If the return is
filed late, see Interest and Penalties, later.
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In addition, complete and attach Form 3800, and all forms
required to compute each applicable credit.
Proxy tax only. Organizations that are required to file Form
990-T only because they are liable for the proxy tax on lobbying
and political expenditures must complete the following.
The heading (above Part I) except items J and K.
Part II, lines 3 and 7.
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Part III.
Signature area.
Attach a statement showing the proxy tax computation.
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Instructions for Form 990-T
payment system that works in conjunction with EFTPS. Make
arrangements with your financial institution ahead of time, noting
the institution's availability, deadlines, and costs. To learn more,
Extensions. Filers may request an automatic extension of time
to file Form 990-T by using Form 8868, Application for Automatic
Extension of Time To File an Exempt Organization Return.
Note: For 2023, an applicable entity filing Form 990-T solely to
Timeliness of deposits. The IRS will use business days to
determine the timeliness of deposits. Business days are any day
that isn’t a Saturday, Sunday, or legal holiday in the District of
Columbia.
make an elective payment election that is:
A State, the District of Columbia, or political subdivision or
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instrumentality or agency thereof;
The Tennessee Valley Authority; or
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An Indian tribal government or a subdivision or instrumentality
Interest and Penalties
or agency thereof,
Your organization may be subject to interest and penalty charges
if it files a late return or fails to pay tax when due. Generally, the
organization isn't required to include interest and penalty
charges on Form 990-T because the IRS can figure the amount
and bill the organization for it.
does not need to file Form 8868 to request an automatic
extension of time to file Form 990-T. For 2023, a paperless
automatic extension will be provided to each such entity that has
registered its intention to make an elective payment election and
has obtained one or more registration numbers.
Interest. Interest is charged on taxes not paid by the original
due date of the return even if the organization uses Form 8868 to
request an automatic extension of time to file. Interest is also
charged on penalties imposed for failure to file, negligence,
fraud, substantial valuation misstatements, and substantial
understatements of tax from the due date (including extensions)
to the date of payment. The interest charge is figured at the
underpayment rate determined under section 6621.
Amended return. To correct errors or change a previously filed
return, check box F, “Check box if an amended return,” at the top
of the return. Also, in Part V, Supplemental Information, include a
statement that indicates the line numbers on the original return
that were changed and give the reason for each change.
Generally, the amended return must be filed within 3 years after
the date the original return was due or 3 years after the date the
organization filed it, whichever is later.
Late filing of return. An organization that fails to file its return
when due (including extensions of time for filing) is subject to a
penalty of 5% of the unpaid tax for each month or part of a month
the return is late, up to a maximum of 25% of the unpaid tax. The
minimum penalty for a return that is more than 60 days late is the
smaller of the tax due or $485. The penalty won't be imposed if
the organization can show that the failure to file on time was due
to reasonable cause. If you receive a notice about a penalty after
you file this return, reply to the notice with an explanation and we
will determine if you meet reasonable-cause criteria. Don’t
include an explanation when you file your return.
Where and How To File
Required electronic filing. If you are an organization or trust
defined in section 511 and need to file Form 990-T, you are
required to file electronically. For additional information, visit
If you are an applicable entity that is not an organization or
trust defined in section 511, and you are filing Form 990-T to
make an elective payment election, electronic filing is
encouraged but not required.
Late payment of tax. The penalty for late payment of taxes is
usually 1/2 of 1% of the unpaid tax for each month or part of a
month the tax is unpaid. The penalty can’t exceed 25% of the
unpaid tax. If you receive a notice about a penalty after you file
this return, reply to the notice with an explanation and we will
determine if you meet reasonable-cause criteria. Don’t include
an explanation when you file your return.
Estimated Tax Payments
Generally, an organization filing Form 990-T must make
installment payments of estimated tax if its estimated tax (tax
minus allowable credits) is expected to be $500 or more. Don't
include the proxy tax when computing your estimated tax liability
for 2023.
Estimated tax penalty. An organization that doesn’t make
estimated tax payments when due may be subject to an
underpayment penalty for the period of underpayment.
Generally, an organization is subject to this penalty if its tax
liability for the tax year is $500 or more and it didn’t make
estimated tax payments of at least the smaller of its tax liability
for the tax year or 100% of the prior year's tax. See section 6655
for details and exceptions.
Depository Method of Tax Payment
The organization must pay any tax due in full by the due date of
the return without extension.
Electronic Deposit Requirement
The organization must deposit all depository taxes (such as
employment tax, excise tax, and corporate income tax)
electronically. Generally, electronic funds transfers are made
using the Electronic Federal Tax Payment System (EFTPS). For
more information about EFTPS or to enroll in EFTPS, go to
Telecommunications Relay Services (TRS) for people who are
deaf, hard of hearing, or have a speech disability, dial 711 and
then provide the TRS assistant the 800-555-4477 number above
or 800-733-4829. Also, see Pub. 966, Electronic Federal Tax
Payment System: A Guide to Getting Started.
Trust fund recovery penalty. This penalty may apply if certain
excise, income, social security, and Medicare taxes that must be
collected or withheld aren't paid to the U.S. Treasury. These
taxes are generally reported on:
Form 720, Quarterly Federal Excise Tax Return;
Form 941, Employer's QUARTERLY Federal Tax Return;
Form 943, Employer's Annual Federal Tax Return for
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Agricultural Employees; or
Form 945, Annual Return of Withheld Federal Income Tax.
The trust fund recovery penalty may be imposed on all
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Depositing on time. For EFTPS deposits to be made timely,
the organization must submit the deposit by 8 p.m. Eastern time
the day before the deposit is due.
persons who are determined by the IRS to have been
responsible for collecting, accounting for, and paying over these
taxes, and who acted willfully in not doing so. The penalty is
equal to the unpaid trust fund tax. See the Instructions for Form
720; or Pub. 15 (Circular E), Employer's Tax Guide, for details,
including the definition of responsible persons.
Same-day wire payment option. If you fail to submit a deposit
transaction on EFTPS by 8 p.m. Eastern time the day before the
date a deposit is due, you can still make your deposit on time by
using the Federal Tax Application (FTA), a same-day federal tax
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Instructions for Form 990-T
Report distributions from retirement or profit-sharing plans,
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Other penalties. There are also penalties that can be imposed
for negligence, substantial understatement of tax, reportable
transaction understatements, and fraud. See sections 6662,
6662A, and 6663.
IRAs, SEPs, SIMPLEs, and insurance contracts;
Report proceeds from real estate transactions; and
Report distributions from an HSA, an Archer MSA, or a
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Medicare Advantage MSA.
Other Forms That May Be Required
When filing the above listed Form 1099 series
information returns, the organization must also file Form
1096, Annual Summary and Transmittal of U.S.
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Forms W-2 and W-3. File Form W-2, Wage and Tax Statement,
and Form W-3, Transmittal of Wage and Tax Statements, to
report wages, tips, other compensation, withheld income taxes,
and withheld social security/Medicare taxes for employees.
CAUTION
Information Returns.
Form 4466. File Form 4466, Corporation Application for Quick
Refund of Overpayment of Estimated Tax, to apply for a quick
refund if the organization overpaid its estimated tax for the year
by at least 10% of its expected income tax liability and at least
$500.
Form 461. Noncorporate taxpayers may need to file Form 461,
Limitation on Business Losses. See Form 461 and its
instructions.
Form 720. File Form 720, Quarterly Federal Excise Tax Return,
to report environmental excise taxes, communications and air
transportation taxes, fuel taxes, manufacturers taxes, ship
passenger tax, and certain other excise taxes. See Trust fund
recovery penalty, earlier.
Form 5498. File Form 5498, IRA Contribution Information, to
report contributions (including rollover contributions) to any IRA,
including a SEP, SIMPLE, or Roth IRA, and to report Roth IRA
conversions, IRAs, and the fair market value (FMV) of the
account.
Form 926. File Form 926, Return by a U.S. Transferor of
Property to a Foreign Corporation, if the organization is required
to report certain transfers to foreign corporations under section
6038B.
Form 5498-ESA. File Form 5498-ESA, Coverdell ESA
Contribution Information, to report contributions (including
rollover contributions) to a Coverdell ESA.
Form 940. File Form 940, Employer's Annual Federal
Unemployment (FUTA) Tax Return, if the organization is liable for
FUTA tax.
Form 5498-SA. File Form 5498-SA, HSA, Archer MSA, or
Medicare Advantage MSA Information, to report contributions to
an HSA or Archer MSA, and the FMV of an HSA, an Archer
MSA, or a Medicare Advantage MSA. See the Instructions for
Forms 1099-SA and 5498-SA.
Form 941 and Form 943. File Form 941, Employer's
QUARTERLY Federal Tax Return; or Form 943, Employer's
Annual Federal Tax Return for Agricultural Employees, to report
income tax withheld, and employer and employee social security
and Medicare taxes. Also, see Trust fund recovery penalty,
earlier.
Form 5713. File Form 5713, International Boycott Report, if the
organization had operations in, or related to, certain boycotting
countries.
Form 5884-C. File Form 5884-C, Work Opportunity Credit for
Qualified Tax-Exempt Organizations Hiring Qualified Veterans, to
claim the work opportunity credit for qualified first-year wages
paid to qualified veterans who begin working for the organization
on or after November 22, 2011, and before January 1, 2026.
Form 945. File Form 945, Annual Return of Withheld Federal
Income Tax, to report income tax withheld from nonpayroll
distributions or payments, including pensions, annuities, IRAs,
gambling winnings, and backup withholding.
Form 965-A and Form 965-B. See Form 965-A, Individual
Report of Net 965 Tax Liability; Form 965-B, Corporate and Real
Estate Investment Trust (REIT) Report of Net 965 Tax Liability
and Electing REIT Report of 965 Amounts; and their respective
instructions, for more information.
Form 5884-D. File Form 5884-D, Employee Retention Credit for
Certain Tax-Exempt Organizations Affected by Qualified
Disasters, to claim the employee retention credit against certain
payroll taxes if activities of the organization became inoperable
because of damage from a qualified disaster. See the
Instructions for Form 5884-D for more information.
Form 1098. File Form 1098, Mortgage Interest Statement, to
report the receipt from any individual of $600 or more of
mortgage interest (including points) in the course of the
organization's trade or business and reimbursements of overpaid
interest.
Form 6198. File Form 6198, At-Risk Limitations, if the
organization has a loss from an at-risk activity conducted as a
trade or business or for the production of income.
Forms 8275 and 8275-R. Taxpayers and income tax return
preparers file Form 8275, Disclosure Statement, and Form
8275-R, Regulation Disclosure Statement, to disclose items or
positions taken on a tax return or that are contrary to Treasury
regulations (to avoid parts of the accuracy-related penalty or
certain preparer penalties).
Forms 1099-A, B, DIV, INT, LTC, MISC, NEC, OID, R, S, and
SA. Organizations engaged in an unrelated trade or business
may be required to:
File an information return on Forms 1099-A, B, DIV, INT, LTC,
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MISC, NEC, OID, R, S, and SA;
Report acquisitions or abandonments of secured property
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Form 8300. File Form 8300, Report of Cash Payments Over
$10,000 Received in a Trade or Business, if the organization
received more than $10,000 in cash or foreign currency in one
transaction or in a series of related transactions. See Form 8300,
Instructions for Form 8300, and Regulations section
1.6050I-1(c).
through foreclosure;
Report proceeds from broker and barter exchange
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transactions;
Report certain dividends and distributions;
Report interest income;
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Report certain payments made on a per diem basis under a
long-term care insurance contract, and certain accelerated
death benefits;
Form 8582. File Form 8582, Passive Activity Loss Limitations,
for trusts that have losses (including prior-year unallowed losses)
from passive activities.
Report miscellaneous income (such as payments to providers
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of health and medical services, and miscellaneous income
payments);
Form 8697. File Form 8697, Interest Computation Under the
Look-Back Method for Completed Long-Term Contracts, to
figure the interest due or to be refunded under the look-back
method of section 460(b)(2). The look-back method applies to
Report nonemployee compensation;
Report original issue discount;
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Instructions for Form 990-T
certain long-term contracts that are accounted for under either
the percentage method or the completion-capitalized cost
method.
Analysis (OTSA). Other penalties, such as an accuracy-related
penalty under section 6662A, may also apply. See the
Instructions for Form 8886 for details.
Form 8810. File Form 8810, Corporate Passive Activity Loss
and Credit Limitations, for closely held corporations that have
losses or credits (including prior-year unallowed losses and
credits) from passive activities.
Form 8899. File Form 8899, Notice of Income From Donated
Intellectual Property, to report income from qualified intellectual
property.
Form 8925. File Form 8925, Report of Employer-Owned Life
Insurance Contracts, which must be filed by every applicable
policyholder owning one or more employer-owned life insurance
contracts issued after August 17, 2006.
Form 8865. File Form 8865, Return of U.S. Persons With
Respect To Certain Foreign Partnerships, if the organization:
1. Controlled a foreign partnership (that is, owned more than
a 50% direct or indirect interest in the partnership);
Form 8975. Certain U.S. persons that are the ultimate parent
entity of a U.S. multinational enterprise group with annual
revenue for the preceding reporting period of $850 million or
more are required to file Form 8975. Form 8975 and its
Schedules A (Form 8975) must be filed with the income tax
return of the ultimate parent entity of a U.S. multinational
enterprise group for the tax year in or within which the reporting
period covered by Form 8975 ends. For more information, see
Form 8975, Schedule A (Form 8975), and the Instructions for
Form 8975 and Schedule A (Form 8975).
2. Owned at least a 10% direct or indirect interest in a
foreign partnership while U.S. persons controlled that
partnership;
3. Had an acquisition, disposition, or change in proportional
interest in a foreign partnership that:
a. Increased its direct interest to at least 10% or reduced its
direct interest of at least 10% to less than 10%;
b. Changed its direct interest by at least a 10% interest; or
4. Contributed property to a foreign partnership in exchange
Form 8978. File Form 8978, Partner's Additional Reporting
Year Tax, to report adjustments shown on Form 8986, Partner's
Share of Adjustment(s) to Partnership-Related Items, received
from a partnership that has elected to push out adjustments to
partnership-related items to their partners.
for a partnership interest if:
a. Immediately after the contribution, the organization
directly or indirectly owned at least a 10% interest in the foreign
partnership; or
b. The FMV of the property the organization contributed to
the foreign partnership in exchange for a partnership interest,
when added to other contributions of property made to the
foreign partnership by the organization or a related person during
the preceding 12-month period, exceeds $100,000.
Form 8990. File Form 8990, Limitation on Business Interest
Expense Under Section 163(j), to claim a deduction for business
interest unless the taxpayer meets certain specified exceptions.
Also, Form 8990 must be filed by any taxpayer that owns an
interest in a partnership with current-year or prior-year carryover
excess business interest expense allocated from the
partnership.
Also, the organization may have to file Form 8865 to report
certain dispositions by a foreign partnership of property it
previously contributed to that foreign partnership if it was a
partner at the time of the disposition. See Form 8865 and its
separate instructions.
Form 8991. File Form 8991, Tax on Base Erosion Payments of
Taxpayers With Substantial Gross Receipts, for any corporation,
other than a RIC, a REIT, or an S corporation, that has aggregate
gross receipts of at least $500 million in 1 or more of the 3
preceding tax years ending with the preceding tax year.
Form 8886. File Form 8886, Reportable Transaction Disclosure
Statement, to disclose information for each reportable
transaction in which the organization participated. Form 8886
must be filed for each tax year that the federal income tax liability
of the organization is affected by its participation in the
transaction. The organization may have to pay a penalty if it is
required to file Form 8886 but doesn’t do so. The following are
reportable transactions.
Form 8993. File Form 8993, Section 250 Deduction for
Foreign-Derived Intangible Income (FDII) and Global Intangible
Low-Taxed Income (GILTI), for the allowance of a deduction for
the eligible percentage of FDII. The deduction is allowed only to
domestic corporations (not including REITs, RICs, and S
corporations).
Any listed transaction that is the same as, or substantially
•
Form 8994. File Form 8994, Employer Credit for Paid Family
similar to, tax avoidance transactions identified by the IRS.
and Medical Leave, to figure the employer credit for paid leave.
Any transaction offered under conditions of confidentiality for
•
which the organization paid an advisor a fee of at least
$250,000.
Form 8995. Refer to Form 8995, Qualified Business Income
Deduction Simplified Computation, if you are a trust filing Form
990-T and have unrelated business income, to determine if you
have qualified business income (QBI) and may be allowed a QBI
deduction under section 199A. See the instructions for Form
8995, Part I, line 9.
Certain transactions for which the organization has
•
contractual protection against disallowance of the tax benefits.
Any transaction resulting in a loss of at least $10 million in any
•
single year or $20 million in any combination of years.
Certain transactions identified by the IRS in published
•
Form 8995-A. Refer to Form 8995-A. Use this form to figure
your qualified business income deduction. Use separate
Schedules A, B, C, and/or D, as appropriate, to help calculate
the deduction.
guidance as a “transaction of interest” (a transaction that the IRS
believes has a potential for tax avoidance or evasion, but hasn’t
yet been identified as a listed transaction).
Form 8886-T. File Form 8886-T, Disclosure by Tax-Exempt
Entity Regarding Prohibited Tax Shelter Transaction, to disclose
information with respect to each prohibited tax shelter
Form 8997. File Form 8997, Initial and Annual Statement of
Qualified Opportunity Fund (QOF) Investments, annually to
report investments held in a QOF at any time during the year.
See the instructions for Form 8997.
transaction to which the organization is a party.
Penalties. The organization may have to pay a penalty if it is
required to disclose a reportable transaction under section 6011
and fails to properly complete and file Form 8886. The penalty is
$50,000 ($200,000 if the reportable transaction is a listed
transaction) for each failure to file Form 8886 with its return or for
failure to provide a copy of Form 8886 to the Office of Tax Shelter
Accounting Methods
An accounting method is a practice a taxpayer follows to
determine the year in which to report revenue and expenses for
federal income tax purposes. An accounting method includes
6
Instructions for Form 990-T
not only the overall plan of accounting for gross income or
deductions (for example, an accrual method or the cash receipts
and disbursement method), but also the treatment of an item
used in such overall plan. However, a practice that does not
affect the timing for reporting an item of income or deduction for
purposes of determining taxable income is not an accounting
method. A taxpayer, including a tax-exempt entity, adopts any
permissible accounting method in the first year in which it uses
the method in determining its taxable income. See Rev. Proc.
2015-13, 2015-5 I.R.B. 419.
Alternatively, if a taxpayer, including a tax-exempt entity, has
not yet adopted an accounting method for an item of income or
deduction, a change in how the entity reports the item isn’t a
change in accounting method. In this case, the procedures
applicable to requests for accounting method changes (the
requirement to file Form 3115) aren’t applicable. See Rev. Proc.
2015-13 for the definition of what constitutes an accounting
method change.
Thus, a tax-exempt entity that has never taken into account
an item of income or deduction in determining taxable income
does not have to request consent to change its method of
reporting that item on its Form 990-T. Additionally, a tax-exempt
entity that has never been subject to federal income tax on an
item of income or deduction, but that is required to file a Form
990-T solely due to owing a section 6033(e)(2) proxy tax, does
not have to request consent to change its method for reporting
the item.
Adjustments required when changing an accounting
method. A taxpayer, including a tax-exempt entity, that changes
its accounting method must generally calculate and report an
adjustment to ensure that no portion of the item being changed
is permanently omitted or duplicated (see section 481(a)).
However, depending on the specific method change, the IRS
may provide that an adjustment isn’t required or permitted.
An exempt organization may adopt an accounting
method not only for purposes of calculating taxable
!
CAUTION
income, but also for purposes of determining whether
taxable income will be subject to federal income tax. For
example, a tax-exempt entity may adopt an accounting method
for an item of income from an unrelated trade or business activity
even if the gross income from the activity is less than $1,000 and
is therefore not taxed for federal income tax purposes pursuant
to Regulations section 1.6012-2(e).
An accounting method for an item of income or deduction may
generally be adopted separately for each of the taxpayer’s trades
or businesses. However, in order to be permissible, an
accounting method must clearly reflect the taxpayer’s income.
Unless instructed otherwise, the organization should generally
use the same accounting method on the Form 990-T and all
schedules to report revenue and expenses that it regularly uses
to keep its books and records.
Generally, a taxpayer, including a tax-exempt entity, will
recognize a positive section 481(a) adjustment (that is,
!
CAUTION
an increase to income) ratably over 4 tax years and will
recognize a negative section 481(a) adjustment in full in the year
of change. See Rev. Proc. 2015-13 or its successor.
Accounting method change. Once a taxpayer, including a
tax-exempt entity, adopts an accounting method for federal
income tax purposes, the taxpayer must generally request the
IRS consent before it can change its accounting method (even if
the year in which the taxpayer seeks to make the change is a
year in which it generates only tax-exempt income or is
otherwise not taxed on its taxable income). In most cases, a
taxpayer requests consent to change an accounting method by
filing Form 3115, Application for Change in Accounting Method.
See Rev. Proc. 2015-13, or any successor, for general
procedures for obtaining consent to change an accounting
method. See the Instructions for Form 3115 and Pub. 538 for
more information and exceptions. See Rev. Proc. 2021-34 for
additional procedures that may apply for obtaining automatic
consent to change methods of accounting for revenue
recognition and certain other methods of accounting that may
affect the accounting for revenue recognition. Also see Rev.
Proc. 2022-09 for additional procedures that may apply for
obtaining automatic consent to change certain methods of
accounting related to small businesses.
An organization may elect a 1-year adjustment period for a
positive section 481(a) adjustment that is less than $50,000. See
the Instructions for Form 3115 for more information and the
requirements to make this election.
Include any positive section 481(a) adjustment on
Schedule A (Form 990-T), Part I, line 12 (Other income). If the
section 481(a) adjustment is negative, report it as a deduction on
Schedule A (Form 990-T), Part II, line 14 (Other deductions).
The section 481(a) adjustment should not be reported on Form
990-T as a negative number.
However, as discussed above, if a tax-exempt entity has not
yet adopted an accounting method for an item, a change in how
the entity reports the item for purposes of filing the Form 990-T is
not a change in accounting method. In this case, an adjustment
under section 481(a) isn’t required or permitted.
Accounting Period
Depending on the specific accounting method change being
requested, the taxpayer may be able to request automatic
consent. This means that, as long as the taxpayer follows the
applicable procedures, the taxpayer does not have to wait for
formal approval by the IRS before applying the new accounting
Changes for 2022; as modified by Rev. Proc. 2022-23; 2022-18
allowing late elections under sections 168(j)(8) and 168(l)(3)(D),
and also providing guidance allowing a late election under
section 181(a)(1), for a list of accounting method changes that
may qualify for automatic consent.
For example, a tax-exempt entity that has adopted an
accounting method for an item of income from an unrelated trade
or business must generally request consent before it can change
its method of accounting for that item in any subsequent year.
This is true regardless of whether gross income from the
unrelated trade or business is $1,000 or more in such
subsequent year.
The return must be filed using the organization's established
annual accounting period. If the organization has no established
accounting period, file the return on the calendar-year basis.
Applicable entities such as state and local governmental
entities and Indian tribal governments that have not established
an annual accounting period for purposes of filing a tax return
should identify their annual accounting period on their first Form
990-T.
Fiscal year. If the organization has established a fiscal year
accounting period, use the 2023 Form 990-T to report on the
organization's fiscal year that began in 2023 and ended 12
months later. A fiscal year accounting period should normally
coincide with the natural operating cycle of the organization. Be
certain to indicate in Item A of Form 990-T, the date the
organization's fiscal year began in 2023 and the date the fiscal
year ended in 2024.
To change an accounting period, some organizations may
make a notation on a timely filed Form 990, 990-EZ, 990-PF, or
7
Instructions for Form 990-T
990-T. Others may be required to file Form 1128, Application To
Adopt, Change, or Retain a Tax Year. For details on which
procedure applies to your organization, see Rev. Proc. 85-58,
1985-2 C.B. 740, and the Instructions for Form 1128.
Name and Address
The name and address on Form 990-T should be the same as
the name and address shown on other Forms 990.
Include the suite, room, or other unit number after the street
address. If the Post Office doesn’t deliver mail to the street
address and the organization has a P.O. box, show the box
number instead of the street address.
For the short-period return, figure the tax by placing the
organization's taxable income on an annual basis. If the
organization changes its accounting period, file Form 990-T for
the short period that begins with the first day after the end of the
old tax year and ends on the day before the first day of the new
tax year. For details, see section 443.
If the organization receives its mail in care of a third party
(such as an accountant or an attorney), enter on the street
address line “C/O” followed by the third party's name and street
address or P.O. box.
Reporting 990-T Information on Other Returns
Change of name. If the organization has changed its
name, it must check the box next to “Name of
!
Your organization may be required to file an annual information
return on:
CAUTION
organization” and also provide the following when filing
this return, if it is:
Form 990, Return of Organization Exempt From Income Tax;
Form 990-EZ, Short Form Return of Organization Exempt
•
A corporation, is incorporated with the state or limited liability
•
•
From Income Tax;
•
company treated as a corporation for tax purposes (that is, not a
disregarded entity)—an amendment to the articles of
incorporation or articles of organization along with proof of filing
with the state;
Form 990-PF, Return of Private Foundation or Section 4947(a)
(1) Nonexempt Charitable Trust Treated as a Private Foundation;
or
Form 5500, Annual Return/Report of Employee Benefit Plan.
A trust—an amendment to the trust agreement with the
•
•
trustee(s) signature; or
An association, or an unincorporated association—an
•
If so, include on that information return the unrelated business
amendment to the articles of association, constitution, by-laws,
or other organizing document with signatures of at least two
officers/members.
gross income and expenses (but not including the specific
deduction claimed on Part I, line 8, or any expense carryovers
from prior years) reported on Form 990-T for the same tax year.
Items A Through L
Rounding Off to Whole Dollars
Item A. If the organization has changed its address since it last
You may round off cents to whole dollars on the organization’s
return and schedules. If you do round to whole dollars, you must
round all amounts. To round, drop amounts under 50 cents and
increase amounts from 50 to 99 cents to the next dollar. For
example, $1.39 becomes $1 and $2.50 becomes $3. If you have
to add two or more amounts to figure the amount to enter on a
line, include cents when adding the amounts and round off only
the total. If you are entering amounts that include cents, make
sure to include the decimal point. There is no cents column on
the form.
filed a return, check item A.
If a change in address occurs after the return is filed, use
Form 8822-B, Change of Address or Responsible
TIP
Party — Business, to notify the IRS of the new address.
Item B. Check the box under which the organization receives its
tax exemption.
Qualified pension, profit-sharing, and stock bonus plans
should check the 501 box and enter “a” between the first set of
parentheses. Do not make an entry in the space between the
second parentheses.
For other organizations exempt under section 501, check the
box for 501 and enter the section that describes their tax-exempt
status, for example, 501(c)(3).
Public Inspection Requirements of Section 501(c)
(3) Organizations
Under section 6104(d), a section 501(c)(3) organization that files
Form 990-T must make its entire annual exempt organization
business income tax return (including amended returns)
available for public inspection. See Appendix C. Public
Inspection of Form 990-T Returns Filed by Section 501(c)(3)
Organization, later.
For tax-exempt organizations that don't receive their
exemption under section 501, use the following guide.
IF you are a
THEN check this box
408(e).
IRA, SEP, or SIMPLE
Roth IRA
408A.
Specific Instructions
Archer MSA
220(e).
Coverdell ESA
530(a).
Period Covered
Qualified State Tuition Program
Qualified ABLE Program
529(a).
File the 2023 form for calendar year 2023 or a fiscal year
beginning in 2023 and ending in 2024. For a fiscal year, fill in the
tax year information at the top of the form.
529A.
The 2023 Form 990-T may also be used if:
Public colleges and universities that have not obtained
recognition of exemption under section 501(c)(3), and applicable
entities that are not described in section 501(a) should not check
any box in item B.
The organization has a tax year of less than 12 months that
•
begins and ends in 2024, and
The 2024 Form 990-T isn't available at the time the
•
organization is required to file its return. The organization must
show its 2024 tax year on the 2023 Form 990-T and take into
account any tax law changes that are effective for tax years
beginning after 2023.
Item C. Enter the total of the end-of-year assets from the
organization's books of account.
8
Instructions for Form 990-T
1. The corporation is a subsidiary in an affiliated group
(defined in section 1504) but isn't filing a consolidated return for
the tax year with that group.
Item D. Every organization or entity filing Form 990-T must
have its own employer identification number (EIN).
No organization or other entity should use the EIN
2. The corporation is a subsidiary in a parent-subsidiary
of any other organization or entity.
!
controlled group (defined in section 1563).
CAUTION
Excluded member. If the corporation is an "excluded
member" of a controlled group (see section 1563(b)(2)), it is still
considered a member of a controlled group for purposes of item
K.
An employees' trust described in section 401(a) and exempt
under section 501(a) should enter its own trust identification
number in this block.
An IRA trust enters its own EIN in this block. An IRA trust
Item L. Enter the name and address of the person who has the
organization's books and records and the telephone number at
which they can be reached.
never enters a social security number (SSN) or the trustee's EIN.
An EIN may be applied for in one of the following ways.
•
once the application information is validated.
Part I. Total Unrelated Business
Taxable Income
Total of Unrelated Business Taxable Income
Computed From All Unrelated Trades or
Businesses
By mailing or faxing Form SS-4, Application for Employer
•
Identification Number.
Note. Only organizations located in the United States or U.S.
territories can use the online application. Foreign organizations
must use one of the other methods to apply for an EIN in one of
the following ways.
Item E. If the organization is covered by a group exemption,
Line 1. Enter the sum of the positive amounts from all
Schedules A (Form 990-T), Part II, line 18. Don’t include any
amount from Schedule A (Form 990-T), Part II, line 18, that is
less than zero in the computation of total unrelated trade or
business income reported on Part I, line 1.
enter the group exemption number.
Item F. Check this box if the organization previously filed a
Form 990-T return with the IRS for a tax year and is now filing
another return for the same tax year to amend the previously
filed return. Also, see Amended return, earlier, for information
you must include in an amended return.
Line 2. Reserved. Do not enter any amount on this line.
Charitable Contributions
Item G. Check the box that describes your organization.
Check the box for "6417(d)(1)(A) Applicable entity" only if no
other checkbox on this line applies. For example, a rural electric
cooperative exempt under section 501(c)(12) should check the
box for 501(c) Corporation or 501(c) Trust, (as the case may be).
Similarly, a public college or university should check the box for
"State college/university" even if it is filing Form 990-T solely with
regard to an elective payment election.
Line 4. Enter contributions or gifts actually paid within the tax
year to or for the use of charitable and governmental
organizations described in section 170(c). Also, enter any
unused contributions carried over from earlier years. The
deduction for contributions will be allowed whether or not directly
connected with the conduct of a trade or business. See
Appendix B. Charitable Contribution Deduction, later.
“Other trust” includes IRAs, SEPs, SIMPLEs, Roth IRAs,
Coverdell ESAs, and Archer MSAs.
Deduction for Net Operating Loss Arising in Tax
Years Beginning Before 2018
Section 529 organizations check the 501(c) corporation or
501(c) trust box depending on whether the organization is a
corporation or a trust. Also, the box for 529(a) in item B must be
checked.
Line 6. Enter the smaller of (a) the amount of NOL arising in tax
years beginning before January 1, 2018, or (b) the amount
shown on Part I, line 1.
Compute your tax in Part II on the appropriate line. If you
check 501(c) corporation, you must compute your tax on
!
CAUTION
Part II, line 1, and leave line 2 blank. If you check 501(c)
Specific Deduction
trust, 401(a) trust, or Other trust, you must compute your tax on
Part II, line 2, and leave line 1 blank.
Line 8. A specific deduction of $1,000 is allowed except for
computing the NOL and the net operating loss deduction under
section 172.
Item H. Check if filing Form 990-T only to claim a credit from
Form 8941, to claim a refund shown on Form 2439, or to claim
the elective payment election amount from Form 3800.
Only one specific deduction may be taken, regardless of the
number of unrelated businesses conducted. However, a
diocese, province of a religious order, or convention or
association of churches is allowed one specific deduction for
each parish, individual church, district, or other local unit that
regularly conducts an unrelated trade or business. This applies
only to those parishes, districts, or other local units that aren't
separate legal entities but are components of a larger entity
(diocese, province, convention, or association). Each specific
deduction will be the smaller of $1,000 or the gross income from
any unrelated trade or business the local unit conducts. If you
claim a total specific deduction larger than $1,000, attach a
statement showing how you figured the amount. The attached
statement should include the name of each local unit, its gross
unrelated business income, and its allowable specific deduction
(which can’t exceed the smaller of $1,000 or the local unit’s
gross unrelated business income).
Item I. Check if you are a 501(c)(3) organization filing a
consolidated return with a 501(c)(2) title holding corporation.
See Consolidated returns, earlier, for additional information.
Item J. Enter the total number of Schedules A attached to Form
990-T. An organization with one or more unrelated trades or
businesses will complete a separate Schedule A for each
unrelated trade or business.
Complete all needed Schedules A before completing
Parts I through V of Form 990-T.
TIP
Item K. Check “Yes” box if your organization is a corporation
and either (1) or (2) below applies.
9
Instructions for Form 990-T
The diocese, province of a religious order, or convention or
association of churches must file a return reporting the gross
income and deductions of all its units that aren't separate legal
entities. These local units can’t file separate returns because
they aren't separately incorporated. Local units that are
separately incorporated must file their own returns and can’t be
included with any other entity except for a title holding company.
See Consolidated Returns, earlier.
Tax Rate Schedule for Trusts
If the amount on Part II, line 2, is:
Of the amount
over—
Over—
But not over—
Tax is:
$0
$2,900
10,550
14,450
- - - - -
10%
$290 + 24%
2,126 + 35%
3,491 + 37%
$0
2,900
10,550
14,450
2,900
10,550
14,450
For details on the specific deduction, see section 512(b)(12)
and the related regulations.
Proxy Tax
Line 3. To pay the section 6033(e)(2) proxy tax on
Section 199A Deduction
nondeductible lobbying and political expenditures, enter the
proxy tax on Part II, line 3, and attach a statement showing the
computation.
For trust filers only. If you are a trust filing Form 990-T and
have unrelated business income, you may have Qualified
Business Income (QBI) and may be allowed a QBI deduction
under section 199A.
Refer to the instructions for Form 8995, or Form 8995-A, (as
applicable) to determine whether you meet the requirements for
the QBI deduction and how to complete the applicable form.
Exempt organizations, except section 501(c)(3) and certain
other organizations, must include certain information regarding
lobbying expenditures on Form 990. In addition, organizations
may have to provide notices to members regarding their share of
dues to which the expenditures are allocable. See the
Instructions for Form 990 and Rev. Proc. 98-19, 1998-1 C.B. 547,
for exceptions.
If the organization elects not to provide the notices described
earlier, it must pay the proxy tax described in section 6033(e)(2).
If the organization doesn’t include the entire amount of allocable
dues in the notices, it may have to pay the proxy tax. This tax
isn't applicable to section 501(c)(3) organizations. Figure the
proxy tax by multiplying the aggregate amount not included in
the notices described earlier by 21%. No deductions are
allowed.
Line 9. For purposes of calculating the QBI deduction, the
taxable income before the QBI deduction is the amount reported
on Part I, line 7, minus the amount reported on Part I, line 8.
Note. For tax years beginning after 2017, the organization
determines the unrelated business income separately for each
unrelated trade or business, and the income for an unrelated
trade or business can’t be less than zero. Since a loss from an
unrelated trade or business isn’t included in the UBTI for the tax
year due to application of section 512(a)(6), when calculating
QBI, omit items of income, gain, deduction, and loss from any
unrelated trade or business that operated at a loss. A loss from
an unrelated trade or business will be carried forward to future
years when the trust has income (or gain that is subject to
unrelated business income tax) from the same unrelated trade or
business and will be used in those years in calculating the QBI.
Additionally, W-2 wages and unadjusted basis immediately after
the acquisition (UBIA) of qualified property from an unrelated
trade or business that operated at a loss for the current tax year
aren’t used in calculating the limitation on QBI for taxpayers over
the threshold.
Other Tax Amounts
Line 4. Part II, line 4, is intended to capture any positive tax
amount that doesn’t have a specific line. An MeF (Internet filing)
dependency (attachment) captures the detail. Use line 4 to
report tax amounts not reported on a specific line in Part II
(excluding tax deferred under section 1294, which is included on
Part III, line 4).
Use this line to report the base erosion minimum tax amount
•
under section 59A from Form 8991, Part IV, line 5e. Section 59A
applies to base erosion payments paid or accrued in tax years
beginning after 2017. See the Instructions for Form 8991 to
determine if the organization is an applicable taxpayer under
section 59A(e), and, if the organization is an applicable taxpayer,
to determine the base erosion minimum tax amount. Enter the
base erosion minimum tax amount on Part II, line 4.
Part II. Tax Computation
Organizations Taxable as Corporations
Line 1. Multiply Part I, line 11, by 21% (0.21).
Use this line to report the tax and interest on a nonqualified
•
withdrawal from a capital construction fund (section 7518).
Use this line to report the deferred tax amount (defined in
Trusts
•
Line 2. Trusts exempt under section 501(a), which otherwise
would be subject to subchapter J (estates, trusts, etc.), are taxed
at trust rates. This rule also applies to employees' trusts that
qualify under section 401(a). Most trusts figure the tax on the
UBTI amount on Part I, line 11, using the Tax Rate Schedule for
Trusts, below. If the tax rate schedule is used, enter the tax on
Part II, line 2, and check the “Tax rate schedule” box. If the trust
is eligible for the rates on net capital gains and qualified
dividends, complete Schedule D (Form 1041) and enter on Part
II, line 2, the tax from Schedule D (Form 1041). Check the
“Schedule D” box on line 2 and attach Schedule D (Form 1041)
to Form 990-T.
section 1291(c)(1)) that is the aggregate increase in taxes
(described in section 1291(c)(2)) on an excess distribution from
a passive foreign investment company (PFIC) that is taxable as
UBTI. See the Instructions for Form 8621, Information Return by
a Shareholder of a Passive Foreign Investment Company or
Qualified Electing Fund.
Use this line to report the increase in tax attributable to a
•
partner's audit liability. If your organization received Form 8986
from one or more partnerships that have elected to push out
adjustments to partnership-related items to their partners,
complete and attach Form 8978. See the Instructions for Form
8978. Include any increase in taxes due from Form 8978, line 14,
on Part II, line 4. If Form 8978 shows a decrease in tax, do not
report that here. Instead, a negative adjustment should be
reported in Part III on line 1b.
A trust with more than one unrelated trade or business
that computes its tax on Schedule D (Form 1041) may
!
CAUTION
need to adjust the amount entered on Schedule D (Form
Unless otherwise indicated, when reporting deferred tax on
line 4, don't include interest on the tax amount. Instead, report
such interest as an “other amount due” on Part III, line 3. For
example, interest on tax deferred under section 1291(c)(1),
1041), Part V, line 22, to include only the net gain from
Schedule D (Form 1041), line 18a (column 2), or line 19 (column
2), that is included in income on Part I of Form 990-T.
10
Instructions for Form 990-T
determined under section 1291(c)(3) is reported on Part III,
line 3.
The organization is required to file Form 3800, General
Business Credit, to claim any business credit. For a list of
credits, see Form 3800. Include the allowable credit from Form
3800, Part II, line 38, on Form 990-T, Part III, line 1c.
How to report. Attach a statement to Part II, line 4, showing (a)
a brief description of the type of tax, and (b) the amount. For
example, if the organization is reporting $100 of tax due from an
increase in tax attributable to a partner's audit liability (Form
8978), the attachment would show “Form 8978” and “$100.”
Do not enter the net elective payment election amount
from Form 3800 on line 1c. Enter the elective payment
!
CAUTION
election amount from Form 3800 on line 6g.
An organization described in section 501(c) which is
Alternative Minimum Tax
exempt from tax under section 501(a) should not use
!
Line 5. Organizations liable for tax on unrelated business
CAUTION
Form 3800 to claim the refundable small employer tax
taxable income may be liable for alternative minimum tax.
credit for certain health insurance premiums paid on behalf of its
employees. See the instructions for Part III, line 6f. See the
instructions to Form 3800.
Trusts attach Schedule I, Alternative Minimum Tax–Estate
and Trusts, and enter any tax from Schedule I on this line.
Corporations may need to complete and attach Form 4626,
Alterative Minimum Tax–Corporation, and enter any tax from
Form 4626 on this line. See the Instructions for Form 4626 for
more information.
Credit for Prior-Year Minimum Tax
Line 1d. Use Form 8801 to figure the minimum tax credit and
any carryforwards of that credit for trusts. For corporations, use
Form 8827.
Tax on Noncompliant Facility Income
Line 6. There is a tax on a hospital organization’s noncompliant
facility income. See Regulations section 1.501(r)-2 for more
information. This tax is an income tax and is separate from the
excise tax on a failure to meet the community health needs
assessment requirements of section 501(r)(3) that is reported on
Form 4720.
Total Credits
Line 1e. Add lines 1a through 1d.
Line 3. Other Amounts Due
Line 3a. Recapture of investment credit. Use line 3a to
report recapture of investment tax credit amounts required when
certain investment tax credit property ceases to be qualified
property before the end of the recapture period. See Form 4255,
Recapture of Investment Credit.
Total
Line 7. Add Part II, lines 3, 4, 5, and 6, to Part II, line 1 or 2,
whichever applies.
Line 3b. Recapture of low-income housing credit. If the
corporation disposed of property (or there was a reduction in the
qualified basis of the property) for which it took the low-income
housing credit, and the corporation did not follow the procedures
that would have prevented recapture of the credit, it may owe a
tax. See Form 8611, Recapture of Low-Income Housing Credit.
Line 3c. Interest due under the look-back method --
completed long-term contracts. If the corporation used the
percentage-of-completion method under section 460(b) for
certain long-term contracts, figure any interest due or to be
refunded using the look-back method, described in section
460(b)(2). Use Form 8697 to figure any interest due or to be
refunded. See the Instructions for Form 8697. Include any
interest due on line 3c.
Part III. Tax and Payments
Foreign Tax Credit
Corporations. See Form 1118, Foreign Tax
•
Credit—Corporations, for an explanation of when a corporation
can claim this credit for payment of income tax to a foreign
country or U.S. possession.
Trusts. See Form 1116, Foreign Tax Credit (Individual, Estate,
•
or Trust), for rules on how the trust computes the foreign tax
credit.
Line 1a. Complete the form that applies to the organization and
attach the form to Form 990-T. Enter the credit on this line.
Line 3d. Interest due under the look-back method --
income forecast method. If the corporation used the income
forecast method to depreciate property, it must figure any
interest due or to be refunded using the look-back method,
described in section 167(g)(2). Use Form 8866 to figure any
interest due or to be refunded. See the Instructions for Form
8866. Include any interest due on line 3d.
Other Credits
Line 1b. Use line 1b to enter nonrefundable credits not
identified elsewhere in Part III, line 1. Attach a statement that lists
the applicable form and the amount of the credit. Such credits
may include the following.
Any QEV passive activity credits from prior years allowed for
•
Line 3e. Other Additional amounts due may be included in the
total entered on Part III, line 3. Check the box for “Other” if the
organization includes any of the items discussed. See How to
report below for details on reporting these amounts on an
attached statement.
the current tax year from Form 8834, Qualified Electric Vehicle
Credit, line 7. Attach Form 8834.
The allowable credits from Form 8912, Credit to Holders of
•
Tax Credit Bonds, line 12.
If your organization received Form 8986 from one or more
•
Interest on deferred tax attributable to installment sales of
•
partnerships that have elected to push out adjustments to
partnership-related items to their partners, complete and attach
Form 8978. See the Instructions for Form 8978. Enter the
amount of any decrease in taxes due from Form 8978, line 14.
certain time-shares and residential lots (section 453(l)(3)) and
certain nondealer installment obligations (section 453A(c)).
Interest due on deferred gain (section 1260(b)).
•
If the organization makes the election to be taxed on its
•
income from qualifying shipping activities, complete Form 8902,
Alternative Tax on Qualifying Shipping Activities, and attach it to
Form 990-T. See Income from qualifying shipping activities, later.
How to report. If the organization checked the “Other” box,
attach a statement showing the computation of each item
included in the total for Part III, line 3e. In addition, identify (a) the
applicable Code section or form number, (b) the type of tax or
General Business Credit
Line 1c. Enter the organization's total general business credit
(excluding the work opportunity credit, the employee retention
credit, the empowerment zone employment credit, the Indian
employment credit, and the credit for employer differential wage
payments). See the Instructions for Form 3800 for exceptions.
11
Instructions for Form 990-T
interest, and (c) the amount of tax or interest. For example, if the
organization is reporting $100 of tax due from the recapture of
the QEV credit, enter “Section 30—QEV recapture tax—$100”
on the attached statement.
line 6e. See Backup withholding under Which Parts To
Complete, earlier.
Credit for Small Employer Health Insurance
Premiums
Line 6f. An organization described in section 501(c) which is
exempt from tax under section 501(a) may be eligible to claim
the refundable small employer tax credit for a percentage of
certain health insurance premiums paid on behalf of its
employees.
A tax-exempt eligible small employer can request the
refundable credit by attaching Form 8941, Credit for Small
Employer Health Insurance Premiums, showing the calculation
for the amount of the refundable credit claimed. A tax-exempt
organization is eligible for the refundable credit if it is an
organization that is described in section 501(c) which is exempt
from tax under section 501(a). The organization must keep
records to substantiate the amount of the credit claimed.
Total Tax
Line 4. Include any deferred tax on the termination of a section
1294 election applicable to shareholders in a qualified electing
fund (QEF) in the amount entered on Part III, line 4. See Form
8621, Part VI, and How to report, later.
Subtract from the total entered on Part III, line 4, any deferred
tax on the corporation's share of undistributed earnings of a
QEF. See Form 8621, Part III.
How to report. Attach a statement showing the computation
of each item included in, or subtracted from, the total on Part III,
line 4. Specify (a) the applicable Code section, (b) the type of
tax, and (c) the amount of tax.
Line 5
Section 965
If a tax-exempt eligible small employer is filing Form
990-T only to request a credit for small employer health
insurance premiums paid, complete the following steps.
TIP
Corporation. For tax years 2021 and later, a corporation will not
have any section 965(a) inclusions to report. If the organization
elected to pay its section 965 net tax liability in installments, the
organization should attach Form 965-B to Form 990-T. However,
the current-year installment should be paid with a separate
voucher (which will be mailed to the organization in advance of
the payment due date). Don’t include the current-year installment
in the Tax and Payments computation in Part III.
1. Fill in the heading (the area above Part I) except items J
and K. Check the box for “Credit from Form 8941” in item H .
2. Enter -0- on Part I, line 11, and Part III, line 4.
3. Enter the credit from Form 8941, line 20, on Part III,
line 6f.
4. Complete Part III, lines 7, 10, and 11, and the signature
area.
Trust. A trust that has "net 965 tax liability" for the current tax
year (as described in the Instructions for Form 965-A) should
enter on line 5 the amount from the current-year line on Form
965-A, Part II, column (k). If the trust has no net 965 tax liability
for the current tax year, but has elected to pay its section 965 net
tax liability in installments, the trust should attach Form 965-A to
Form 990-T, but should not include the current-year installment
in the Tax and Payments computation in Part III (as described
above for corporations).
Elective payment election
Line 6g. Enter the elective payment election amount from Form
3800. See the Instructions for Form 3800. On line 6g, enter the
total net elective payment election amount from Form 3800, Part
III, line 6, column (i).
Tax on Undistributed Long-Term Capital Gain by
RIC or Reit
Estimated Tax Payments
Line 6h. Enter the elective payment election amount from Form
Line 6b. Enter the total estimated tax payments made for the
3800. See the Instruction for Form 3800.
tax year.
Enter the amount of tax paid by a regulated investment
company (RIC) or real estate investment trust (REIT) on
undistributed long-term capital gains. Attach each Form 2439
you received from each RIC or REIT of which you are a
shareholder. If you are filing a composite Form 990-T, see
Composite Form 990-T under Which Parts To Complete, earlier.
If an organization is the beneficiary of a trust, and the trust
makes a section 643(g) election to credit its estimated tax
payments to its beneficiaries, include the organization's share of
the estimated tax payments in the total amount entered here.
Attach a statement showing the amount of the section 643(g)
credit amount.
Credit for Federal Excise Tax Paid on Fuels
Foreign Organizations
Line 6i. If you paid a federal excise tax on certain fuels and
qualify for any of the credits listed below, attach Form 4136 to
your return and enter the total credit on line 6i.
Line 6d. Enter the tax withheld on UBTI from U.S. sources that
isn't effectively connected with the conduct of a trade or
business within the United States. Attach Form 1042-S, Foreign
Person's U.S. Source Income Subject to Withholding, or another
form which verifies the withheld tax reported on Part III, line 6d.
The biodiesel or renewable diesel mixture credit
•
•
•
The alternative fuel credit.
A credit for certain nontaxable uses (or sales) of fuel during
Backup Withholding
your income tax year.
A credit for blending a diesel-water fuels emulsion.
A credit for exporting dyed fuels or gasoline blendstocks.
Substainable aviation fuel (SAF) credit.
•
•
•
Line 6e. Recipients of dividend or interest payments must
generally certify their correct tax identification number to the
bank or other payer on Form W-9. If the payer doesn’t get this
information, it must withhold part of the payments as “backup
withholding.” If your organization was subject to erroneous
backup withholding because the payer didn’t realize you were an
exempt organization and not subject to this withholding, you can
claim credit for the amount withheld by including it on Part III,
See the instructions for Form 4136 for more information about
these credits.
Note: Form 8849, Claim for Refund of Excise Taxes, may be
used to claim a periodic refund of excises taxes instead of
12
Instructions for Form 990-T
waiting to claim a credit on Form 4136. See the Instructions for
Form 8849 and Pub. 510, Excise Taxes.
If the “Yes” box is checked, write the name of the foreign
country or countries. If the list of foreign country names will not fit
in the available space, continue the list in Part V, Supplemental
Information.
Other Credits
Get FinCEN Form 114, Report of Foreign Bank and Financial
Accounts (FBAR), to see if the organization is considered to
have an interest in or signature or other authority over a financial
account in a foreign country (such as a bank account, securities
account, or other financial account). If the organization is
required to file this form, file FinCEN Form 114 electronically with
the Department of the Treasury using FinCEN's BSA E-Filing
System. Because FinCEN Form 114 isn't a tax form, don't file it
with Form 990-T.
Line 6j. For other credits, check the “Other ” box and provide
the following information:
The number of the form used to calculate the credit, or the
•
code section that establishes the credit,
A brief description of the credit, and
The amount of the credit.
•
•
If necessary, provide information required to claim a specific
credit in Part V, Supplemental Information.
Other credits may include the following:
The credit for ozone-deleting chemicals. Include any credit the
•
Line 2. The organization may be required to file Form 3520,
Annual Return To Report Transactions With Foreign Trusts and
Receipt of Certain Foreign Gifts, if either of the following applies.
organization is claiming under section 4682(g) for taxes paid on
chemicals under as propellants in metered-dose inhalers.
The amount of current year net section 965 tax liability, For a
•
It directly or indirectly transferred money or property to a
•
trust, this amount will be from Form 956-A, Part I, column (d),
line 4.
foreign trust. For this purpose, any U.S. person who created a
foreign trust is considered a transferor.
Note: Do not use Part III, line 6j, to claim a refund of federal tax
withheld and shown on Form 1099, Claims for refund of backup
withholding should be shown on Part III, line 6e.
It is treated as the owner of any part of the assets of a foreign
•
trust under the grantor trust rules.
See the Instructions for Form 3520.
An owner of a foreign trust must ensure that the trust
Estimated Tax Penalty
files an annual information return on Form 3520-A,
!
Line 8. Use Form 2220, Underpayment of Estimated Tax by
Corporations, to see if the organization owes a penalty and its
amount. Generally, the organization isn't required to file this form
because the IRS can figure the amount of any penalty and notify
the organization. However, even if the organization doesn’t owe
the penalty, you must complete and attach Form 2220 if either of
the following applies.
CAUTION
Annual Information Return of Foreign Trust With a U.S.
Owner. For details, see the Instructions for Form 3520-A.
Line 3. Report any tax-exempt interest received or accrued in
the space provided. Include any exempt-interest dividends
received as a shareholder in a mutual fund or other RIC.
Line 4. Use line 4 to show the amount of the NOL carryover to
the tax year from tax years prior to 2018 (“pre-2018 NOL”), even
if some of the loss is used to offset income on this return. The
amount to enter is the total of all pre-2018 NOLs generated in
any year prior to 2018, and not used to offset income (either as a
carryback or carryover) to a tax year prior to 2023. Do not reduce
the amount by any NOL deduction reported on Part I, line 6.
The annualized income or adjusted seasonal installment
•
method is used.
The organization is a “large organization” computing its first
•
required installment based on the prior year's tax.
If you attach Form 2220, check the box on Form 990-T, Part
III, line 8, and enter the amount of any penalty on this line.
Line 5. Use the table in line 5 to show the amount of each NOL
carryover from tax years after 2017 that is attributable to each
separate trade or business conducted at any time after 2017
(“siloed post-2017 NOL”) to the tax year. Include the NOL for
each separate trade or business conducted after 2017, even if a
Schedule A for any one or more specific trades or businesses
isn’t included with this return for this tax year. Report the full
amount of the available NOL for each separate trade or
business, even if some of the loss is used.
Tax Due
Line 9. You must pay the tax in full when the return is filed. You
may pay by EFTPS. For more information about EFTPS, see
Electronic Deposit Requirement, earlier. Also, you may pay by
credit or debit card.
To pay by credit or debit card. For information on paying
In the first column under line 5, identify the business activity
code to which each NOL relates. In the second column, enter the
total amount of each siloed post-2017 NOL generated in any
prior year after 2017 and not used to offset income (either as a
carryback or carryover) to a tax year prior to 2023 to offset
income reported on a Schedule A filed for that separate trade or
business on this return. Don’t reduce the amount by any NOL
deduction reported on Schedule A, Part II, line 17. See Separate
Trades or Businesses, later, for information about changing the
business activity code associated with a particular trade or
business, and the effect of such a change on NOLs.
Part IV. Statements Regarding Certain
Activities and Other Information
Complete all lines in Part IV.
Line 1. Check “Yes” if either item (1) or (2) below applies.
1. At any time during the year the organization had an
interest in or signature or other authority over a financial account
in a foreign country (such as a bank account, securities account,
or other financial account); and
a. The combined value of the accounts was more than
Part V. Supplemental Information
$10,000 at any time during the year; and
Use Part V to provide the IRS with narrative information required
for responses to specific questions on Form 990-T, and to
explain the organization’s operations or responses to various
questions.
b. The accounts were not with a U.S. military banking facility
operated by a U.S. financial institution.
2. The organization owns more than 50% of the stock in any
corporation that would answer “Yes” to item (1).
13
Instructions for Form 990-T
The authorization can’t be revoked. However, the
authorization will automatically end no later than the due date
(excluding extensions) for filing next year's Form 990-T.
Signature
Corporations. The return must be signed and dated by the
president, vice president, treasurer, assistant treasurer, or chief
accounting officer, or by any other corporate officer (such as a
tax officer) authorized to sign. Receivers, trustees, or assignees
must also sign and date any return filed on behalf of the
organization.
Enter the paid preparer’s Preparer Tax Identification
Number (PTIN), not their SSN, in the “PTIN” box in the
!
CAUTION
paid preparer’s block. Because Form 990-T is publicly
disclosable when filed by a 501(c)(3) organization, any
information entered in this block will be publicly disclosed. For
Trusts. The return must be signed and dated by the individual
fiduciary, or by the authorized officer of the trust receiving or
having custody or control and management of the income of the
trust. If two or more individuals act jointly as fiduciaries, any one
of them may sign.
Special rule for IRA trusts. A trustee of IRA trusts may use
a facsimile signature if all of the following conditions are met.
General Instructions — Schedule A
(Form 990-T)
Purpose of the Schedule
Each group of returns sent to the IRS must be accompanied
•
by a letter signed by the person authorized to sign the returns
declaring, under penalties of perjury, that the facsimile signature
appearing on the returns is the signature adopted by that person
to sign the returns filed and that the signature was affixed to the
returns by that person or at that person's direction.
Complete a separate Schedule A to report income and allowable
deductions for each separate unrelated trade or business.
Separate Trades or Businesses
The letter must also list each return by the name and EIN of
•
An exempt organization may engage in more than one unrelated
trade or business. Prior to the enactment of section 512(a)(6), an
exempt organization deriving gross income from the regular
conduct of two or more unrelated trades or businesses
calculated UBTI by determining its aggregate gross income from
all such unrelated trades or businesses and reducing that
amount by the aggregate deductions allowed with respect to all
such unrelated trades or businesses. However, section 512(a)(6)
changed this calculation for exempt organizations with more than
one unrelated trade or businesses so that, in the case of any
exempt organization with more than one unrelated trade or
business:
the IRA trust.
After the facsimile signature is affixed, no entries on the return
•
may be altered other than to correct discernible arithmetic errors.
A manually signed copy (of the letter submitted to the IRS with
•
the returns and a record of any arithmetic errors corrected) must
be retained on behalf of the IRA trusts listed in the letter and it
must be available for inspection by the IRS.
Paid preparer. If an officer of the organization filled in its return,
the paid preparer's space should remain blank. Anyone who
prepares the return but doesn’t charge the organization should
not sign the return. Certain others who prepare the return should
not sign. For example, a regular, full-time employee of the
organization, such as a clerk, secretary, etc., should not sign.
UBTI, including for purposes of determining any NOL
•
deduction, shall be computed separately with respect to each
trade or business and without regard to section 512(b)(12)
(allowing a specific deduction of $1,000);
Generally, anyone who is paid to prepare the organization's
tax return must sign it and fill in the Paid Preparer Use Only area.
The UBTI of such exempt organization shall be the sum of the
•
The paid preparer must complete the required preparer
UBTI so computed with respect to each trade or business, less a
specific deduction under section 512(b)(12); and
information and do the following.
Sign the return in the space provided for the preparer's
•
For purposes of section 512(a)(6)(B), UBTI with respect to
•
signature.
any such trade or business shall not be less than zero.
Give a copy of the return to the organization.
•
Thus, under section 512(a)(6), an exempt organization may
not aggregate income and deductions from all unrelated trades
or businesses when calculating UBTI.
Note. A paid preparer may sign original returns, amended
returns, or requests for filing extensions by rubber stamp,
mechanical device, or computer software program. Also,
facsimile signatures are authorized.
An organization determines whether it regularly carries on
one or more unrelated trades or businesses by applying sections
511 through 514. Identify each separate trade or business using
the first two digits of the NAICS two-digit code that most
accurately describes the unrelated trade or business based on
the more specific NAICS code, such as at the six-digit level.
Identify activities in the nature of investments, which aren’t
described in NAICS, using the appropriate business activity
code described under Non-NAICS Business Activity Codes,
later.
Paid preparer authorization. If the organization wants to allow
the IRS to discuss this tax return with the paid preparer who
signed it, check the “Yes” box in the signature area of the return.
This authorization applies only to the individual whose signature
appears in the Paid Preparer Use Only section of its return. It
doesn’t apply to the firm, if any, shown in that section.
If the “Yes” box is checked, the organization is authorizing the
IRS to call the paid preparer to:
Give the IRS any information that is missing from its return;
Call the IRS for information about the processing of its return
•
•
or the status of its refund or payment(s); and
An organization will use each NAICS two-digit code only
once. For example, a hospital organization that operates several
hospital facilities that include pharmacies that sell goods to the
general public would include all the pharmacies under the
NAICS two-digit code for retail trade, regardless of whether the
hospital organization keeps separate books and records for each
pharmacy.
Respond to certain IRS notices that the organization has
•
shared with the preparer about a math error, offsets, and return
preparation. The notices won't be sent to the preparer.
The organization isn't authorizing the paid preparer to receive
any refund check, bind the organization to anything (including
any additional tax liability), or otherwise represent the
organization before the IRS. If the organization wants to expand
the paid preparer's authorization, see Pub. 947, Practice Before
the IRS and Power of Attorney.
Once a two-digit NAICS code or business activity code is
used for an unrelated trade or business, you should continue to
use that same code in subsequent tax years. If it is necessary to
14
Instructions for Form 990-T
change the two-digit NAICS code or business activity code
previously used for an unrelated trade or business, you must
report the change in a statement attached to the Schedule A on
which the activities are reported. The statement should include
(1) the two-digit NAICS code or business activity code used in
the previous tax year; (2) the two-digit NAICS code or business
activity code used this year and, if filing more than one
Schedule A, the sequence numbers from item D of the
applicable Schedule A; and (3) a narrative explanation
describing the reason for the change.
Schedule A that apply to the unrelated trade or business
reported on that Schedule A.
Is gross income $10,000 or less? If the sum of the amounts in
all Schedules A (Form 990-T), Part I, line 13, column (A), is
$10,000 or less, complete Schedule A (Form 990-T) and Form
990-T as follows.
Schedule A (Form 990-T)
Complete the heading on each Schedule A.
See Regulations section 1.512(a)-6(h)(4) regarding the
potential effects on NOL carryforwards upon a change of
Part I. Complete only the lines that apply.
!
CAUTION
the two-digit NAICS code for an unrelated trade or
1. Enter information directly in column (A) on lines 1, 3
business.
through 5, 12, and 13.
2. Entries for lines 2, and 6 through 11, must be made on the
Part referenced in the text for the line in Part I. For example, enter
the amount for Part I, line 2, on Part III, line 8. For Part I, line 6,
columns (A) and (B), enter the amounts on Part IV, line 3 and
line 5, respectively.
Regulations section 1.512(a)-6(c)(9) describes a
transition rule for certain partnership interests. The
!
CAUTION
transition period ended on the first day of the first tax
year beginning after December 2, 2020.
3. Make entries as necessary to complete the applicable
Dual-Use Property
lines in column (C).
Section 512(a)(1) permits an exempt organization with an
unrelated trade or business to reduce the income from that trade
or business by the deductions allowed by Chapter 1 that are
directly connected with the carrying on of such trade or
business. To be “directly connected” with a trade or business, an
item of deduction must have a proximate and primary
Part II. Complete lines 15–18, and if necessary, the attachment
to line 17 (NOL deduction).
Form 990-T
1. Complete all applicable lines in the heading area.
relationship to the carrying on of the unrelated trade or business
generating the gross income. See Regulations section
1.512(a)-1(a). Expenses, depreciation, and similar items
attributable solely to the conduct of an unrelated trade or
business are proximately and primarily related to that trade or
business and qualify to reduce income from such trade or
business under section 512(a)(1) to the extent such items meet
the requirements of section 162 (trade or business expenses),
section 167 (depreciation), and other relevant provisions. To the
extent that an exempt organization may have items of deduction
that are shared between an exempt activity and an unrelated
trade or business, Regulations section 1.512(a)-1(c) provides
special rules for allocating such expenses. For example, if
facilities are used both to carry on exempt activities and to
conduct unrelated trade or business activities, then expenses,
depreciation, and similar items attributable to such facilities must
be allocated between the two uses on a reasonable basis. See
Regulations section 1.512(a)-1(c). The allocation issues under
section 512(a)(1) are also relevant under section 512(a)(6)
because an exempt organization with more than one unrelated
trade or business must not only allocate indirect expenses
among exempt and taxable activities, as described in
2. Complete all applicable lines as needed to determine the
appropriate tax, applicable credits, and balance due or refund
amount.
3. Complete the signature area.
If an entry for a line on Part I or Part II must be made on a
different Part of Schedule A, complete only the lines in
!
CAUTION
the Part that reference a specific line on Part I or Part II.
Leave all other lines in the applicable Part blank.
Filers with gross income of $10,000 or less, as described
above, don't have to complete Schedule A, Parts III though X
(except as described above because certain entries must be
made in those sections to populate lines in Parts I and II).
However, refer to the applicable Parts of Schedule A when
completing Schedule A, Part I, column (A), and in determining
the deductible expenses to include on Schedule A, Part I,
line 13, column (B).
Exceptions and Special Rules
Regulations section 1.512(a)-1(c) but also among separate
unrelated trades or businesses.
Member income of mutual or cooperative electric compa-
nies. Income of a mutual or cooperative electric company
described in section 501(c)(12), which is treated as member
income under subparagraph (H) of that section, is excluded from
UBTI.
The allocation of expenses, depreciation, and similar items
using an unadjusted gross-to-gross method is not reasonable if
the cost of providing the good or service is substantially the
same but the price charged differs between related and
unrelated activities.
Income from qualifying shipping activities. The
organization's gross income doesn’t include income from
qualifying shipping activities (as defined in section 1356) if the
organization makes an election under section 1354 on a timely
filed return (including extensions) to be taxed on its notional
shipping income (as defined in section 1353) at the highest
corporate rate. If the election is made, the organization generally
may not claim any loss, deduction, or credit with respect to
qualifying shipping activities. An organization making this
election may also elect to defer gain on the disposition of a
qualifying vessel under section 1359. Use Form 8902 to figure
the tax. Include the alternative tax on Form 990-T, Part III, line 3e.
Which Parts To Complete
Complete a separate Schedule A, Parts I and II, for each
unrelated trade or business. Complete only the lines relevant to
the unrelated trade or business being reported on that
Schedule A.
Is gross income more than $10,000? If the sum of the
amounts in all Schedules A (Form 990-T), Part I, line 13, column
(A), is more than $10,000, you must complete all Parts of each
15
Instructions for Form 990-T
How to report income received from a payment
card and third-party network transaction. An
organization that receives a Form 1099-K reporting a
Passive loss and at-risk limitations. Under section 469,
certain taxpayers, including certain tax-exempt organizations,
may not deduct a passive activity loss (PAL). Such tax-exempt
organizations (“affected tax-exempt organizations”) include a
trust (such as a trust described in section 501(c), a trust
described in section 401(a), or an IRA), and a corporation if at
any time during the last half of its tax year more than 50% in
value of the outstanding stock of the corporation is owned,
directly or indirectly, by or for not more than five organizations
that are private foundations under section 509(a) or are
described in section 401(a) or 501(c)(17) (for example, a stock
corporation described in section 501(c)(2) with a 401(a) parent
or private foundation parent).
A PAL occurs when total losses (including prior-year
unallowed losses) from all the organization’s passive activities
exceed the total income from all its passive activities. Generally,
passive activities include (1) trade or business activities in which
the organization didn’t materially participate for the tax year; and
(2) rental activities, regardless of your participation. If the
organization has income or loss from a passive activity, several
lines on Form 990-T and Schedule A (Form 990-T) may be
affected by these rules.
!
CAUTION
“gross amount” received from payment card and third-party
network transactions in the tax year should report these amounts
in the same manner as if the payments weren’t reported on a
Form 1099-K. There isn’t any one specific line on which to report
an amount from Form 1099-K; the correct line should be
determined based on the nature of the payments. Some
payments received may constitute unrelated business income;
see the instructions below to determine the appropriate line. For
instance, if some of the payments are sales income from an
unrelated business, then those payments would be reported on
Part I, line 1a. Retain Form 1099-K with your other records.
Specific Instructions—Schedule A
(Form 990-T)
Items A Through E
Item A. Enter the same name as entered in the heading area of
Form 990-T.
PALs can’t be used to offset income from nonpassive
activities. Passive activity income doesn’t include portfolio
income. Portfolio income (see Temporary Regulations section
1.469-2T(c)(3)) is income from a nonpassive activity. Portfolio
income includes all gross income, other than income derived in
the ordinary course of a trade or business, that is attributable to
interest, dividends, annuities, and royalties (by contrast, a bank's
receipt of interest is in the ordinary course of a trade or business,
as is a securities dealer's receipt of dividends). Portfolio income
also includes gain or loss from the disposition of property that
produces portfolio income or is held for investment (see section
163(d)(5)). The rule treating portfolio income as not from a
passive activity doesn’t apply to the extent that income, of a type
generally regarded as portfolio income, is derived in the ordinary
course of a trade or business. For example, the business income
of a bank typically is largely interest. Similarly, a securities
broker/dealer may earn a substantial portion of the income from
the business in the form of dividends and gains on sales of
dividend-bearing instruments. Interest income may also arise in
the ordinary course of a trade or business with respect to
installment sales and interest charges on accounts receivable.
This means that portfolio income may not be reduced by PALs or
passive activity credits. For example, any portfolio income
earned by a trust described in section 501(a) that is UBTI (such
as unrelated debt-financed income) may not be offset by PALs
from an unrelated trade or business.
Section 469(k) provides that the passive activity limitations
must be applied separately to items from each publicly traded
partnership (PTP). A PTP is a partnership whose interests are
traded on an established securities market or are readily
tradable on a secondary market (or its substantial equivalent).
PALs from a PTP may generally be used only to offset income or
gain from passive activities of the same PTP. This means that a
partner in a PTP may not use PALs and passive activity credits
from a PTP to offset income from other sources, including
passive activity income from another PTP. Such PALs and
passive activity credits aren't allowed for the tax year.
Item B. Enter the same EIN as entered in item D of Form 990-T.
Item C. On each Schedule A, enter the business activity code
that best describes the organization's unrelated trade or
business reported on that Schedule A. Modernized e-File
requires a 6-digit numerical entry for item C. Unless you are
using a 6-digit non-NAICS business activity code, you should
enter the 2 digits of the NAICS code in the first two positions and
then enter 4 zeros to complete the entry. For example, if the
2-digit business activity code 45 (for retail trade) best describes
your unrelated trade or business, enter “450000” in item C. See
Business Activity Codes, later, for more information about
business activity codes.
Part I. Unrelated Trade or Business
Income
Gross Receipts or Sales
Line 1a. Enter the gross receipts from an unrelated trade or
business regularly conducted that involves the sale of goods or
performance of services.
A section 501(c)(7) social club would report its
restaurant and bar receipts from nonmembers on
TIP
Schedule A, Part I, line 1, but would report its investment
income on Schedule A, Part I, line 9, and on Schedule A, Part
VII.
Advance payments. In general, advance payments are
reported in the year of receipt. To report income from long-term
contracts, see section 460. For rules that allow a limited deferral
of advance payments beyond the current tax year, see section
451(c). Also, see Regulations sections 1.451-8(c), (d), and (e).
For applicability dates, see Regulations section 1.451-8(h). For
information on adopting or changing to a permissible method for
reporting advance payments for services and certain goods by
an accrual method corporation, see the Instructions for Form
3115. Also, see Rev. Proc. 2021-34.
Generally, PALs are subject to other limitations (for example,
basis and at-risk limitations) before they are subject to the PAL
limitations. For example, the at-risk rules under section 465
generally prohibit trusts and corporations that are affected
tax-exempt organizations from claiming losses from activities in
excess of the taxpayer’s amount at risk in the activity.
An affected tax-exempt organization may need to attach Form
6198 and either Form 8582 or Form 8810. For more information
on these rules, see Pub. 925, Passive Activity and At-Risk Rules.
Installment sales. Generally, the installment method cannot be
used for dealer dispositions of property. A “dealer disposition” is
(a) any disposition of personal property by a person who
regularly sells or otherwise disposes of personal property of the
same type on the installment plan, or (b) any disposition of real
property held for sale to customers in the ordinary course of the
taxpayer's trade or business.
16
Instructions for Form 990-T
These restrictions on using the installment method don't
apply to dispositions of property used or produced in a farming
business or sales of time-shares and residential lots for which
the organization elects to pay interest under section 453(l)(3).
For sales of time-shares and residential lots reported under
the installment method, the organization's income tax is
increased by the interest payable under section 453(l)(3).
An organization that transfers securities it owns for the
contractual obligation of the borrower to return identical
securities recognizes no gain or loss on that exchange or on the
subsequent receipt of identical securities in satisfaction of the
contractual obligation. To qualify for this treatment, the
organization must lend the securities under an agreement that
requires:
1. The return of identical securities;
Enter on Schedule A, Part I, line 1a and line 3, the gross profit
on collections from installment sales for any of the following.
2. The payment of amounts equivalent to the interest,
dividends, and other distributions that the owner of the securities
would normally receive; and
Dealer dispositions of property before March 1, 1986.
Dispositions of property used or produced in the trade or
•
•
business of farming.
3. The risk of loss or opportunity for gain not be lessened.
Certain dispositions of time-shares and residential lots
•
See sections 512(a)(5) and 1058(b) for details.
reported under the installment method.
Attach Form 6252 to show information about each installment
Debt-financed property disposition. The amount of gain or
loss to be reported on the sale, exchange, or other disposition of
debt-financed property is the same percentage as the highest
acquisition indebtedness for the property for the 12-month
period before the date of disposition is to the average adjusted
basis of the property. The percentage may not be more than
100%. See the instructions for Schedule A, Part V, line 5, to
determine adjusted basis and average adjusted basis.
sale.
Nonaccrual experience method. Accrual method
organizations aren't required to accrue certain amounts to be
received from the performance of services that, on the basis of
their experience, won't be collected, if:
The services are in the field of health, law, engineering,
•
architecture, accounting, actuarial science, performing arts, or
consulting; or
If debt-financed property is depreciable or depletable
property, the provisions of sections 1245, 1250, 1252, 1254, and
1255 must be considered first.
The organization's average annual gross receipts for the 3
•
prior tax years doesn’t exceed $29 million.
Example. On January 1, 2022, an exempt educational
corporation, using $288,000 of borrowed funds, purchased an
office building for $608,000. The only adjustment to basis was
$29,902 for depreciation (straight line method under MACRS
over the 39-year recovery period for nonresidential real
property). The corporation (section 501(c)(3) organization) sold
the building on December 31, 2023, for $640,000. At the date of
sale, the adjusted basis of the building was $578,098 ($608,000
− $29,902) and the indebtedness remained at $288,000. The
adjusted basis of the property on the first day of the year of
disposition was $593,037. The average adjusted basis is
$585,568 (($593,037 + $578,098) ÷ 2). The debt/basis
percentage is 49% ($288,000 ÷ $585,568).
The taxable gain is $30,332 (49% × ($640,000 − $578,098)).
This is a long-term capital gain. A corporation should enter the
gain on Schedule D (Form 1120), Part II, line 8. A trust should
enter the gain on Schedule D (Form 1041), Part II, line 8, if
applicable. In either scenario (a corporation or a trust), the
educational organization must attach a statement to Form 990-T,
in addition to the Schedule D, showing how the gain was figured
along the lines described in this example, if the details weren’t
provided with the Schedule D.
This provision doesn’t apply to any amount if interest is
required to be paid on the amount or if there is any penalty for
failure to timely pay the amount. See Regulations section
1.448-3. Organizations that qualify to use the nonaccrual
experience method should attach a statement showing total
gross receipts, amounts not accrued as a result of the
application of section 448(d)(5), and the net amount accrued.
Enter the net amount on Schedule A, Part I, line 1a.
Gain or loss on disposition of certain brownfield property.
Gain or loss from the qualifying sale, exchange, or other
disposition of a qualifying brownfield property (as defined in
section 512(b)(19)(C)), which was acquired by the organization
after 2004, is excluded from unrelated business taxable income
and is excepted from the debt-financed rules for such property.
See sections 512(b)(19) and 514(b)(1)(E).
Capital Gain Net Income
Line 4a. Generally, organizations required to file Form 990-T
(except organizations described in sections 501(c)(7), (9), and
(17)) aren't taxed on the net gains from the sale, exchange, or
other disposition of property. However, net capital gains on
debt-financed property, capital gains on cutting timber, and
ordinary gains on sections 1245, 1250, 1252, 1254, and 1255
property are taxed. See Form 4797, Sales of Business Property,
and its instructions for additional information.
Also, any capital gain or loss passed through from an S
corporation or any gain or loss on the disposition of S
corporation stock by a qualified tax-exempt organization (see S
Corporations, later) is taxed as a capital gain or loss and
reported on Part I, line 4.
Capital gains and losses should be reported by a trust on
Schedule D (Form 1041), Capital Gains and Losses, and by a
corporation on Schedule D (Form 1120), Capital Gains and
Losses (and Form 8949, Sale and Other Dispositions of Capital
Assets). Schedule D of Form 1041 or Form 1120 (and Form
8949, if applicable) must be attached to Form 990-T.
If you deferred a capital gain into a QOF, you must attach
Schedule D, Form 8949, and Form 8997 to your Form 990-T. You
will need to annually file Form 8997 until you dispose of the
investment. See the Instructions for Form 8997.
Disposition of property received from taxable subsidiary
and used in unrelated business. A taxable 80%-owned
subsidiary corporation of one or more tax-exempt entities is
generally subject to tax on a distribution in liquidation of its
assets to its exempt parent (or parents). See section 337. The
assets are treated as if sold at FMV.
“Tax-exempt entities” for this purpose include organizations
described in sections 501(a), 529, 529A, and 115; charitable
remainder annuity trusts or unitrusts; U.S. (including states) and
foreign governments; Indian tribal governments and certain
corporations; international organizations; and similar non-taxable
organizations.
A taxable corporation that transfers substantially all of its
assets to a tax-exempt entity in a transaction that otherwise
qualifies for nonrecognition treatment must recognize gain on the
transaction as if it sold the assets at FMV. However, such a
transfer isn't taxable if it qualifies as a like-kind exchange under
section 1031 or an involuntary conversion under section 1033. In
such a case, the built-in appreciation is preserved in the
replacement property received in the transaction. A “taxable
17
Instructions for Form 990-T
corporation” is any corporation that isn't a tax-exempt entity as
defined above, including an S corporation.
or business, and its share of the partnership deductions directly
connected with the unrelated gross income.
A corporation that changes status from taxable to tax-exempt
is generally treated as if it transferred all of its assets to a
tax-exempt entity immediately before the change in status (thus
subjecting it to the tax on a deemed sale for FMV). This rule
doesn’t apply where the taxable corporation becomes exempt
within 3 years of formation (within 7 years of formation for section
501(c)(7) organizations), or had previously been exempt and
within several years (generally a period of 3 years) regains
exemption, unless the principal purpose of the transactions is to
avoid the tax on the change in status.
In the transactions described above, the taxable event is
deferred for property that the tax-exempt entity immediately uses
in an unrelated business. If the tax-exempt parent later disposes
of the property, then any gain (not in excess of the amount not
recognized) is included in the parent’s UBTI. If there is partial
use of the assets in unrelated business, then there is partial
recognition of gain or loss with respect to the assets not so used.
Property is treated as disposed if the tax-exempt entity no longer
uses it in an unrelated business.
S Corporations
Qualified tax-exempt organizations can be shareholders in an S
corporation without the S corporation losing its status as an S
corporation. Qualified tax-exempt organizations that hold stock
in an S corporation treat their stock interest as an interest in an
unrelated trade or business. All items of income, loss, or
deduction that the organization receives as a shareholder of the
S corporation are taken into account in Schedule A, Part I, line 5,
in figuring UBTI and not reported on another line of Schedule A
(Form 990-T) that otherwise would apply, except capital gains
and losses, which are reported on Schedule A, Part I, line 4.
Report on Schedule A, Part I, line 4, any gain or loss on the
disposition of S corporation stock.
Qualified tax-exempts. A qualified tax-exempt is an
organization that is described in section 401(a) (qualified stock
bonus, pension, and profit-sharing plans) or 501(c)(3) and
exempt from tax under section 501(a).
Exception. Employee stock ownership plans (ESOPs) don't
follow these S corporation rules if the S corporation stock is an
employer security, as defined in section 409(l).
Attach a statement to this return showing the qualified
tax-exempt's share of all items of income, loss, or deduction.
Combine the income, loss, and deductions (except for the capital
gains and losses) on the statement. If you hold stock in more
than one S corporation, total the combined amounts. Show
capital gains and losses separately and include them on
Schedule A, Part I, line 4a.
Losses on the transfer of assets to a tax-exempt entity are
disallowed if part of a plan having a principal purpose of
recognizing losses.
Net Gain or (Loss)
Line 4b. Show gains and losses on other than capital assets on
Form 4797. Enter on this line the net gain or (loss) from Form
4797, Part II, line 17.
An exempt organization using Form 4797 to report ordinary
gain on sections 1245, 1250, 1252, 1254, and 1255 property will
include only depreciation, amortization, or depletion allowed or
allowable in figuring UBTI or taxable income of the organization
(or a predecessor organization) for a period when it was not
exempt.
Rent Income
Line 6. Enter the amount computed on Part IV, line 3, on Part I,
line 6, column (A). Enter the amount computed on Part IV, line 5,
on Part I, line 6, column (B).
Capital Loss Deduction for Trusts
Line 4c. If a trust has a net capital loss, it is subject to the
limitations of Schedule D (Form 1041). Enter on this line the loss
figured on Schedule D (Form 1041).
Unrelated Debt-Financed Income
Line 7. Enter the amount computed on Part V, line 8, on Part I,
line 7, column (A). Enter the amount computed on Part V, line 10,
on Part I, line 7, column (B).
Income or (Loss) From a Partnership or an S
Corporation
Line 5. See Regulations section 1.512(a)-6 for rules permitting
the aggregation of income (and directly connected deductions)
of certain partnership interests.
Interest, Annuities, Royalties, and Rents From a
Controlled Organization
Line 8. Enter the sum of columns 5 and 10 from Part VI on Part
I, line 8, column (A). Enter the sum of columns 6 and 11 from
Part VI on Part I, line 8, column (B).
Also, for trusts and certain corporations, there are limitations
on income and losses (including from a partnership or an S
corporation) under section 469 (the PAL and credit limitation
rules) and section 465 (at-risk limitations). For more information
on these rules, see the discussion of the application of the
passive activity loss and at-risk limitations to affected tax-exempt
organizations in the introductory instructions under Part I.
Unrelated Trade or Business Income, earlier.
Investment Income of a Section 501(c)(7), (9), or
(17) Organization
Line 9. Enter the sum of amounts from Part VII, column 2, on
Part I, line 9, column (A). Enter the sum of amounts in Part VII,
column 5, on Part I, line 9, column (B).
Exploited Exempt Activity Income, Other Than
Advertising Income
Line 10. Enter the amount computed on Part VIII, line 2, on Part
I, line 10, column (A). Enter the amount computed on Part VIII,
line 3, on Part I, line 10, column (B).
Partnerships
If the organization is a partner in a partnership conducting an
unrelated trade or business, enter the organization's share
(whether or not distributed) of the partnership's income or loss
from the unrelated trade or business. The organization is
required to notify the partnership of its tax-exempt status. Figure
the gross income and deductions of the partnership in the same
way you figure unrelated trade or business income the
organization earns directly.
Advertising Income
Line 11. Enter the amount computed on Part IX, line 2, on Part I,
line 11, column (A). Enter the amount computed on Part IX,
line 3, on Part I, line 11, column (B).
Attach a statement to this return showing the organization's
share of the partnership's gross income from the unrelated trade
18
Instructions for Form 990-T
organization may have current income under section 1293 if the
PFIC is a QEF with respect to the organization. The organization
may also have current income under section 1296 if it makes a
section 1296 mark-to-market election with respect to the PFIC
stock.
Include on Schedule A, Part I, line 12, the portion of an
excess distribution (or gain treated as an excess distribution),
section 1293 inclusion, or section 1296 inclusion that is taxable
as UBTI. See Form 8621.
See the instructions for Form 990-T, Part II, line 4, for
reporting the deferred tax amount that may be owed by the
organization with respect to an excess distribution (or gain
treated as an excess distribution).
Other Income
Line 12. Enter on Part I, line 12, any item of unrelated business
income from a particular trade or business that isn't reportable
elsewhere on the return. Attach a statement describing the
sources of the other income and their amounts. Such amounts
may include:
Recoveries of bad debts deducted in earlier years under the
•
specific charge-off method;
The amount from Form 6478, Biofuel Producer Credit (if
•
applicable);
The amount from Form 8864, Biodiesel, Renewable Diesel, or
•
Sustainable Aviation Fuels Credit (if applicable); and
Proceeds received from employer-owned life insurance
•
contracts issued after August 17, 2006 (complete and attach
Form 8925); and
Line 13. Total Unrelated Trade or Business
Income
The amount of payroll tax credit taken by an employer on its
•
2023 employment tax returns (Forms 941, 943, and 944) for
qualified paid sick and qualified paid family leave under the
FFCRA and the ARP (both the nonrefundable and refundable
portions). These amounts must be included in gross income for
the tax year that includes the last day of the calendar quarter
with respect to which the credit is allowed.
Use the amount from Schedule A, Part I, line 13, column (C), in
the computation of UBTI in Part II.
Part II. Deductions Not Taken
Elsewhere
If the aggregate sum of the amounts on all Schedules A (Form
990-T), Part I, line 13, column (A), is $10,000 or less, you don't
have to complete Schedule A, Part II, lines 1 through 14.
However, you must complete the remainder of Schedule A, Part
II and include the larger of each total from Schedule A, Part II,
line 18, or zero, in the computation of the amount reported on
Part I, line 1, of Form 990-T.
Note. A credit is available only if the leave was taken sometime
after March 31, 2020 and before October 1, 2021, and only after
the qualified leave wages were paid, which might, under certain
circumstances, not occur until a quarter after September 30,
2021, including quarters during 2023.
Organizations described in section 501(c)(19). Enter the
net income from an insurance business that was not properly set
aside. These organizations may set aside income from
payments received for life, sickness, accident, or health
insurance for members of the organization or their dependents.
Note. Only expenses directly connected with the unrelated
trade or business income reported on the Schedule A for that
particular unrelated trade or business may be deducted on that
Schedule A (see Directly connected expenses in Appendix A).
Don't separately include in Schedule A, Part II, any expenses
that are reported in Schedule A, Parts III through IX, other than
excess exempt expenses entered on Schedule A, Part II, line 12,
and excess readership costs entered on Schedule A, Part II,
line 13. For example, officers' compensation allocable to
advertising income is reported on Schedule A, Part IX, only and
shouldn’t be included on Schedule A, Part X, or Schedule A, Part
II, line 1.
1. To provide for the payment of insurance benefits.
2. For a purpose specified in section 170(c)(4) (religious,
charitable, scientific, literary, educational, etc.).
3. For administrative costs directly connected with benefits
described in (1) and (2) above.
Amounts set aside and used for purposes other than those in
(1), (2), or (3) above must be included in UBTI for the tax year if
they were previously excluded from taxable income.
Any amount spent for a purpose described in section 170(c)
(4) is first considered paid from funds earned by the organization
from insurance activities if the income isn't used for the
insurance activities.
Limitations on Deductions
The following items discuss certain areas in which the deduction
may be limited.
Expenditures for lobbying aren't considered section 170(c)(4)
Activities Lacking a Profit Motive
expenses.
In some instances, it is necessary to report income whether or
not it comes from a trade or business (including interest,
annuities, royalties, and rents from controlled organizations, and
income of a section 501(c)(7), (9), or (17) organization other than
exempt function income). If income is attributable to an activity
lacking a profit motive, then a net loss from the activity can’t be
claimed on Form 990-T. Therefore, in Part I, column (B), and Part
II, the total of deductions for expenses directly connected with
income from an activity lacking a profit motive is limited to the
amount of that income. Generally, an activity lacking a profit
motive is one that isn't conducted for the purpose of producing a
profit or one that has consistently produced losses when both
direct and indirect expenses are taken into account.
Income from property financed with qualified 501(c)(3)
bonds. If any part of the property is used in a trade or business
of any person other than a section 501(c)(3) organization or a
governmental unit, and such use isn't consistent with the
requirement for qualified 501(c)(3) bonds under section 145, the
section 501(c)(3) organization is considered to have received
unrelated business income in the amount of the greater of the
actual rental income or the fair rental value of the property for the
period it is used. No deduction is allowed for interest on the
private activity bond. Report the greater of the actual rent or the
fair rental value on Schedule A, Part I, line 12. Report allowable
deductions on Schedule A, Part II. See sections 150(b)(3) and
(c).
PFIC shareholders. If the organization is a direct or indirect
shareholder of a PFIC within the meaning of section 1297, it may
have income tax consequences under section 1291 upon the
disposition of the PFIC stock or on the receipt of an excess
distribution from the PFIC, described in section 1291(a). The
Deductions Related to Property Leased to
Tax-Exempt Entities
For property leased to a governmental or other tax-exempt entity,
or in the case of property acquired after March 12, 2004, that is
19
Instructions for Form 990-T
treated as tax-exempt-use property other than by reason of a
lease, the organization may not claim deductions related to the
property when they exceed the organization's income from the
lease payments. Amounts disallowed may be carried over to the
next year and treated as a deduction concerning the property.
See section 470.
Exceptions. Section 263A doesn’t apply to:
Personal property acquired for resale if the organization's
•
average annual gross receipts for the 3 prior tax years were $10
million or less;
Timber;
•
•
•
•
•
Most property produced under long-term contract;
Certain property produced in a farming business;
Research and experimental costs under section 174;
Geological and geophysical costs amortized under section
Transactions Between Related Taxpayers
167(h);
Generally, an accrual basis taxpayer may deduct business
expenses and interest owed to a related party only in the year
the payment is included in the income of the related party. See
sections 163(e)(3) and 267 for limitations on deductions for
unpaid interest and expenses.
Intangible drilling costs for oil, gas, and geothermal property;
•
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Mining exploration and development costs; and
Inventory of an organization that accounts for inventories in
the same manner as materials and supplies that aren't
incidental. See Schedule A, Part III, Cost of Goods Sold, later.
See Regulations sections 1.263A-1 through 1.263A-3.
Preference Items
Travel, Meals, and Entertainment
Corporations may be required to adjust deductions for depletion
of iron ore and coal, intangible drilling and exploration and
development costs, and the amortizable basis of pollution control
facilities. See section 291 to determine the amount of the
adjustment.
Subject to the limitations and restrictions discussed below, an
organization can deduct ordinary and necessary travel, meals,
and non-entertainment expenses paid or incurred in its trade or
business. Generally, entertainment expenses, membership
dues, and facilities used in connection with these activities can’t
be deducted. In addition, no deduction is generally allowed for
qualified transportation fringe benefits. Special rules apply to
deductions for gifts, luxury water travel, and convention
expenses. See section 274 and Pub. 463, Travel, Gift, and Car
Expenses.
Section 263A Uniform Capitalization Rules
These rules require organizations to capitalize or include as
inventory cost certain costs incurred in connection with the
following.
Qualified transportation fringes (QTFs). Generally, no
deduction is allowed under section 274(a)(4) for QTFs provided
by employers to their employees. QTFs are defined in section
132(f)(1) and include:
The production of real property and tangible personal property
•
held in inventory or held for sale in the ordinary course of
business.
Real property or personal property held in inventory (tangible
•
Transportation in a commuter highway vehicle between the
•
and intangible) acquired for resale.
employee's residence and place of employment,
The production of real property and tangible personal property
•
Any transit pass, and
Qualified parking.
See section 274, Pub. 15-B, and Pub. 535 for details.
•
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produced by the organization for use in its trade or business or in
an activity engaged in for profit.
Tangible personal property produced by an organization
includes a film, sound recording, videotape, book, or similar
property.
Travel. The organization can’t deduct travel expenses of any
individual accompanying an organization's officer or employee,
including a spouse or dependent of the officer or employee,
unless:
Indirect expenses. Organizations subject to the section 263A
uniform capitalization rules are required to capitalize direct costs
and an allocable part of most indirect costs (including taxes) that
benefit the assets produced or acquired for resale or are
incurred by reason of the performance of production or resale
activities.
That individual is an employee of the organization, and
Their travel is for a bona fide business purpose and would
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otherwise be deductible by that individual.
Meals. Generally, the organization can deduct only 50% of the
amount otherwise allowable for non-entertainment-related meal
expenses paid or incurred in an unrelated trade or business.
Meals not separately stated from entertainment are generally not
deductible. In addition (subject to exceptions under section
274(k)(2)):
For inventory, some of the indirect expenses that must be
capitalized are:
Administration expenses;
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Taxes;
Depreciation;
Meals mustn’t be lavish or extravagant, and
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Insurance;
An employee of the organization must be present at the meal.
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Compensation paid to officers attributable to services;
Rework labor; and
Membership dues. The organization can deduct amounts paid
or incurred for membership dues in civic or public service
organizations, professional organizations (such as bar and
medical associations), business leagues, trade associations,
chambers of commerce, boards of trade, and real estate boards.
However, no deduction is allowed if a principal purpose of the
organization is to entertain or provide entertainment facilities for
members or their guests. In addition, organizations can’t deduct
membership dues in any club organized for business, pleasure,
recreation, or other social purpose. This includes country clubs,
golf and athletic clubs, airline and hotel clubs, and clubs
operated to provide meals under conditions favorable to
business discussion.
Contributions to pension, stock bonus, and certain
profit-sharing, annuity, or deferred compensation plans.
Regulations section 1.263A-1(e)(3) specifies other indirect
costs that relate to production or resale activities that must be
capitalized and those that may be currently deductible.
Interest expense. Interest expense paid or incurred during the
production period of designated property must be capitalized
and is governed by special rules. See Regulations section
1.263A-8 through 1.263A-15.
When are section 263A capitalized costs deductible? The
costs required to be capitalized under section 263A aren't
deductible until the property (to which the costs relate) is sold,
used, or otherwise disposed of by the organization.
20
Instructions for Form 990-T
that don't add to the value or appreciably prolong the life of the
property.
Entertainment facilities. The organization can’t deduct an
expense paid or incurred for use of a facility (such as a yacht or
hunting lodge) for an activity usually considered entertainment,
amusement, or recreation.
Bad Debts
Line 4. Enter the total receivables from an unrelated trade or
business that were previously included in taxable income and
that became worthless in whole or in part during the tax year.
Amounts treated as compensation. The organization may
generally be able to deduct otherwise non-deductible travel,
meals, and entertainment expenses if the amounts are treated
as compensation and reported on Form W-2 for an employee or
Form 1099-NEC for an independent contractor and if the total
amount of such compensation isn't unreasonable.
Interest
Line 5. Attach a separate statement listing the interest being
claimed on this line.
Reducing Certain Expenses for Which Credits
Are Allowable
Interest allocation. If the proceeds of a loan were used for
more than one purpose (for example, to purchase a portfolio
investment and to acquire an interest in a passive activity), an
interest allocation must be made. See Temporary Regulations
section 1.163-8T for the interest allocation rules.
If the organization claims certain credits, it may need to reduce
the otherwise allowable deductions for expenses used to figure
the credit. This applies to credits such as the following.
Disabled access credit.
•
Tax-exempt interest. Don't include interest on indebtedness
incurred or continued to purchase or carry obligations on which
the interest income is totally exempt from income tax. For
exceptions, see section 265(b).
Employer credit for social security and Medicare taxes paid on
•
certain employee tips.
Credit for employer-provided childcare facilities and services.
Orphan drug credit.
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Credit for small employer pension plan startup costs.
Employer credit for paid family and medical leave.
Prepaid interest. Generally, a cash basis taxpayer can’t deduct
prepaid interest allocable to years following the current tax year,
for example, during the tax year a cash basis taxpayer prepaid
interest on a loan. The taxpayer can deduct only that part of the
prepaid interest that was for the use of the loaned funds during
the tax year, not for the use of the loaned funds during the
subsequent years.
If the organization has any of these credits, figure each
current-year credit before figuring the deduction for expenses on
which the credit is based.
Business Startup and Organizational Costs
Straddle interest. Generally, the interest and carrying charges
on straddles can’t be deducted and must be capitalized. See
section 263(g).
For business startup and organizational costs paid or incurred
after September 8, 2008, an organization can deduct up to
$5,000 of such costs in the year it begins business (unless the
organization elects to capitalize the full amount of such costs).
The $5,000 deduction is reduced (but not below zero) by the
amount the total costs exceed $50,000. If the total costs are
$55,000 or more, the deduction is reduced to zero. Any costs not
deducted must be amortized, as explained below.
Original issue discount. See section 163(e)(5) for special
rules for the disqualified portion of original issue discount on a
high-yield discount obligation.
Interest on certain underpayments of tax. Don't deduct
interest paid or incurred on any portion of an underpayment of
tax that is attributable to an understatement arising from an
undisclosed listed transaction or an undisclosed reportable
avoidance transaction (other than a listed transaction) entered
into in tax years beginning after October 22, 2004.
Note. For startup and organizational costs paid or incurred after
September 8, 2008, the organization isn't required to attach a
statement or specifically identify the amount deducted for the
election under sections 195(b) and 248(a) to be effective. It is a
deemed election. Whether an organization deducts a portion of
its startup and organizational costs under Regulations sections
1.195-1 and 1.248-1 or elects to amortize the full amount of such
costs, its election is irrevocable. For startup and organizational
costs paid or incurred after October 22, 2004, and before
September 9, 2008, an organization must generally attach the
statement required by Regulations sections 1.195-1(b) and
1.248-1(c) to make the election to deduct a portion of such costs
(as explained above). This election is irrevocable. However, an
organization can apply the provisions of these regulations to
costs paid or incurred after October 22, 2004.
Interest allocable to the production of designated property.
Don't deduct interest on debt allocable to the production of
designated property. Interest that is allocable to such property
produced by an organization for its own use or for sale must be
capitalized. An organization must also capitalize any interest on
debt allocable to an asset used to produce the earlier property.
See section 263A(f) and Regulations sections 1.263A-8 through
1.263A-15.
Interest on below-market loans. See section 7872 for special
rules regarding the deductibility of foregone interest on certain
below-market-rate loans.
Amortization. Any costs not deducted under the above rules
must be amortized ratably over the 180-month period, beginning
with the month the organization begins business. See the
Instructions for Form 4562, Depreciation and Amortization, for
details. If the association elected to amortize business startup
and organizational costs paid or incurred before October 23,
2004, over a period of 60 months or more, it must continue to
amortize those costs over the elected amortization period.
Report the deductible amount of these costs and any
Limitation on deduction of business interest. Business
interest expense is limited to the sum of business interest
income, 30% of the adjusted taxable income, and floor plan
financing interest. Business interest expense includes any
interest paid or accrued on indebtedness properly allocable to
an unrelated trade or business. A taxpayer, other than a tax
shelter, that meets the gross receipts test isn’t required to limit
business interest expense under section 163(j). A taxpayer
meets the gross receipts test if the taxpayer has average annual
gross receipts that are taken into account in determining its UBTI
of $29 million or less for the 3 prior tax years. Gross receipts
include the aggregate gross receipts from all persons treated as
a single employer such as a controlled group of corporations,
commonly controlled partnerships or proprietorships, and
amortization on Schedule A, Part II, line 14. For amortization that
began during the tax year, complete and attach Form 4562.
Repairs and Maintenance
Line 3. Enter the cost of incidental repairs and maintenance not
claimed elsewhere on the return, such as labor and supplies,
21
Instructions for Form 990-T
affiliated service groups. If the taxpayer fails to meet the gross
receipts test, Form 8990 is generally required.
Other Deductions
Line 14. Enter on this line the deduction taken for amortization
(see Form 4562) as well as other authorized deductions for
which no space is provided on the return. Attach a statement
listing the deductions claimed on this line. On each Schedule A,
deduct only items directly connected with the unrelated trade or
business for which income is reported on that Schedule A.
Taxes and Licenses
Line 6. Enter taxes and license fees paid or accrued during the
year, but don't include the following taxes.
Federal income taxes.
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Foreign or U.S. territory income taxes if a foreign tax credit is
•
Extraterritorial income exclusion. Complete Form 8873 and
include the deduction from line 52 in other deductions reported
on Part II, line 14.
Don't deduct fines or penalties paid to a government for
violating any law. The exclusion was repealed generally for
transactions after 2004, with some exceptions. See Form 8873
and its instructions.
claimed.
Taxes not imposed on your organization.
•
Taxes, including state or local sales taxes, paid or incurred in
•
connection with an acquisition or disposition of property. These
taxes must be treated as part of the cost of the acquired property
or, in the case of a disposition, as a reduction in the amount
realized on the disposition.
Taxes assessed against local benefits that increase the value
•
Net Operating Loss (NOL) Deduction Arising in
Tax Years Beginning On or After January 1, 2018
of the property assessed (such as for paving, etc.).
Taxes deducted elsewhere on the return, such as those
•
reflected in cost of goods sold.
See section 164(d) for apportionment of taxes on real
property between the buyer and seller.
Line 17. The NOL deduction is the NOL carryover and
carrybacks that can be deducted in the tax year with regard to
each separate trade or business. To be deductible, an NOL must
have been incurred in an unrelated trade or business activity.
See section 172(a).
Do not reduce the corporation’s deduction for social
security and Medicare taxes by the amount claimed on
!
CAUTION
its employment tax and refundable portions of the
FFCRA and ARP credits for qualified sick and family leave
wages. Instead, report this amount as income on line 10.
Tax Cuts and Jobs Act amendments to section 172. Section
13302 of the Tax Cuts and Jobs Act amended section 172 for tax
years ending after 2017 to eliminate NOL carrybacks except for
certain farming losses and NOLs of insurance companies other
than life insurance companies. See section 172(b), as amended
by the Tax Cuts and Jobs Act. Also see Pub. 225, Farmer’s Tax
Guide; Pub. 536, Net Operating Losses for Individuals, Estates,
and Trusts; and Pub. 542, Corporations, for additional
Depreciation
Line 7. Besides depreciation, include on line 7 the part of the
cost, under section 179, that the organization elected to expense
for certain tangible property placed in service during the tax year
or carried over from the prior tax year. See Form 4562 and its
instructions.
information. The Tax Cuts and Jobs Act also amended section
172(a)(2) to limit the allowable NOL deduction to 80% of taxable
income (calculated as described in section 172(a)(2)).
Depletion
Line 9. See sections 613 and 613A for percentage depletion
rates for natural deposits. Attach Form T (Timber), Forest
Activities Schedules, if a deduction is taken for depletion of
timber.
Instructions for line 17. Enter on Schedule A, Part II, line 17,
the NOL carryover from other tax years attributable to that trade
or business, but don't enter more than the amount shown on
Schedule A, Part II, line 16. An organization that claims the
deduction with respect to any NOL carried through tax years for
which the organization was not required to file Form 990-T must
show the amount of the deduction and how it was computed, but
the organization need not file a Form 990-T in order to preserve
an NOL carryover. See Regulations section 1.512(a)-6(h)(3) for
treatment of suspended NOLs resulting from the termination,
sale, exchange, or other disposition of a separate unrelated
trade or business. After offsetting any gain resulting from the
termination, sale, exchange, or disposition of a separate
Contributions to Deferred Compensation Plans
Line 10. Employers who maintain pension, profit-sharing, or
other funded deferred compensation plans are generally
required to file Form 5500. This requirement applies whether or
not the plan is qualified under the Code and whether or not a
deduction is claimed for the current tax year. Section 6652(e)
imposes a penalty for late filing of these forms. In addition, there
is a penalty for overstating the pension plan deduction. See
section 6662(f).
unrelated trade or business, any NOL remaining is suspended.
However, the suspended NOLs may be used if that previous
separate unrelated trade or business is later resumed or if a new
unrelated trade or business that is accurately identified using the
same NAICS 2-digit code as the previous separate unrelated
trade or business is commenced or acquired in a future tax year.
The amount of an NOL carryover is determined under section
172. See Regulations section 1.512(b)-1(e) and, for
organizations with more than one unrelated trade or business,
Regulations section 1.512(a)-6(h). Attach a statement showing
the computation of the NOL deduction.
Employee Benefit Programs
Line 11. Enter the amount of contributions to employee benefit
programs (such as insurance, health, and welfare programs) that
aren't an incidental part of a deferred compensation plan
included on Schedule A, Part II, line 10.
Excess Exempt Expenses
Line 12. Enter the amount computed on Part VIII, line 7 (if
applicable), on Part II, line 12.
Unrelated Business Taxable Income
Excess Readership Costs
Line 18. Use the greater of the amount computed on line 18 or
zero in the computation of UBTI on Part I, line 1, of Form 990-T.
A net loss calculated on any Schedule A, Part II, line 18, can’t be
used to offset gain on any other Schedule A. Accordingly, a net
Line 13. Enter the amount computed on Part IX, line 8a (if
applicable), on Part II, line 13.
22
Instructions for Form 990-T
loss on a Schedule A should be treated as zero to calculate the
amount reported on Part I, line 1, of Form 990-T
less than scrap value). Bona fide selling price means actual
offering of goods during a period ending not later than 30 days
after inventory date.
If this is the first year the Last-in First-out (LIFO) inventory
method was either adopted or extended to inventory goods not
previously valued under the LIFO method provided in section
472, attach Form 970, Application To Use LIFO Inventory
Method, or a statement with the information required by Form
970.
If the organization changed or extended its inventory method
to LIFO and had to write up the opening inventory to cost in the
year of election, report the effect of this write-up as other income
(Part I, line 12) proportionately over a 3-year period that begins
in the tax year the LIFO election was made (section 472(d)).
Part III. Cost of Goods Sold
Generally, inventories are required at the beginning and end of
each tax year if the production, purchase, or sale of merchandise
is an income-producing factor. See Regulations section 1.471-1.
However, if the organization is a qualifying taxpayer or a
qualifying small business taxpayer, it may adopt or change its
accounting method to account for inventoriable items in the
same manner as materials and supplies that aren't incidental
(unless its business is a tax shelter (as defined in section 448(d)
(3)).
A qualifying taxpayer is a taxpayer that, for each prior tax year
ending after December 16, 1998, has average annual gross
receipts of $1 million or less for the 3-tax-year period ending with
that prior tax year.
Line 1. If the organization is changing its method of accounting
to no longer account for inventories, it must refigure last year's
closing inventory using the new method of accounting and enter
the result on line 1. If there is a difference between last year's
closing inventory and the refigured amount, attach an
A qualifying small business taxpayer is a taxpayer (a) that has
average annual gross receipts of $29 million or less for the
3-tax-year period ending with that prior tax year, and (b) whose
principal business activity isn't an ineligible activity.
explanation and take it into account when figuring the
organization's section 481(a) adjustment (explained earlier).
Line 4. An entry is required on this line only for organizations
that have elected a simplified method of accounting.
Under this accounting method, inventory cost for raw
materials purchased for use in producing finished goods and
merchandise purchased for resale are deductible in the year the
finished goods or merchandise are sold (but not before the year
the organization paid for the raw materials or merchandise, if it is
also using the cash method). For additional guidance on this
method of accounting for inventoriable items, see Pub. 538 and
the Instructions for Form 3115.
For organizations that have elected the simplified production
method, additional section 263A costs are generally those costs,
other than interest, that are now required to be capitalized under
section 263A but that weren’t capitalized under the
organization's method of accounting immediately prior to the
effective date of section 263A. For details, see Regulations
section 1.263A-2(b).
For organizations that have elected the simplified resale
method, additional section 263A costs are generally those costs
incurred with respect to the following categories.
Enter amounts paid for all raw materials and merchandise
during the tax year on line 2. The amount the organization can
deduct for the tax year is figured on Schedule A, Part III, line 8.
Off-site storage or warehousing.
Purchasing.
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All filers not using the cash method of accounting should see
Section 263A Uniform Capitalization Rules under Limitations on
Deductions, earlier, before completing Schedule A. The
instructions for lines 1, 4, 5, and 7, later, apply to Part III earlier,
before completing Schedule A.
Handling, such as processing, assembling, repackaging, and
transporting.
General and administrative costs (mixed service costs).
For details, see Regulations section 1.263A-3(d).
•
Inventory valuation methods. Inventories can be valued at:
Enter on Schedule A, Part III, line 4, the balance of section
1. Cost, as described in Regulations section 1.471-3,
263A costs paid or incurred during the tax year not included on
Schedule A, Part III, lines 2 and 3.
2. Lower of cost or market, as described in Regulations
section 1.471-4, or
Line 5. Enter on Schedule A, Part III, line 5, any costs paid or
incurred during the tax year not entered on Schedule A, Part III,
lines 2 through 4. Attach a statement describing the other costs.
3. Any other method approved by the IRS that conforms to
the requirements of the applicable regulations cited below.
Line 7. See Regulations sections 1.263A-1 through 1.263A-3
for details on figuring the amount of additional section 263A
costs to be included in ending inventory.
If the organization accounts for inventories in the same
manner as materials and supplies that aren't incidental, enter on
Schedule A, Part III, line 7, the portion of its raw materials and
merchandise purchased for resale that are included on
Schedule A, Part III, line 6, and weren’t sold during the year.
However, if the organization is using the cash method of
accounting, it is required to use cost.
A small producer is an organization whose average annual
gross receipts are $1 million or less. Small producers that
account for inventories in the same manner as materials and
supplies that aren't incidental may currently deduct expenditures
for direct labor and all indirect costs that would otherwise be
included in inventory costs.
The average cost (rolling average) method of valuing
inventories generally doesn’t conform to the requirement of the
regulations. See Rev. Rul. 71-234, 1971-1 C.B. 148.
Organizations that use erroneous valuation methods must
change to a method permitted for federal income tax purposes.
File Form 3115 to make this change.
Part IV. Rent Income
Section 501(c)(7), (9), and (17) organizations, enter gross rents
on Schedule A, Part I, line 6, and applicable expenses on
Schedule A, Part II, lines 1 through 14. All rents except those that
are exempt function income must be included.
All organizations that have applicable rent income, other than
section 501(c)(7), (9), and (17) organizations, should complete
Schedule A, Part IV. For organizations other than section 501(c)
(7), (9), and (17) organizations, only the following rents are
taxable on Schedule A, Part I, line 6.
Inventory may be valued below cost when the merchandise is
unsalable at normal prices or unusable in the normal way
because the goods are subnormal because of damage,
imperfections, shop wear, etc., within the meaning of
Regulations section 1.471-2(c). The goods may be valued at the
bona fide selling price, minus direct cost of disposition (but not
23
Instructions for Form 990-T
1. Rents from personal property leased with real property, if
the rents from the personal property are more than 10% of the
total rents received or accrued under the lease, determined at
the time the personal property is placed in service.
For section 514 purposes, don't treat an interest in a
qualified state tuition program (QSTP) as debt. However,
a QSTP's investment income is treated as debt-financed
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CAUTION
income if the QSTP incurs indebtedness when acquiring or
improving income-producing property.
2. Rents from real and personal property if:
a. More than 50% of the total rents received or accrued
A property held to produce income is debt-financed property
if, at any time during the tax year, there was acquisition
indebtedness outstanding for the property. When a property held
for the production of income by an organization is disposed of at
a gain during the tax year, and there was acquisition
under the lease are for personal property, or
b. The amount of the rent depends on the income or profits
derived by any person from the property leased (except an
amount based on a fixed percentage of receipts or sales).
indebtedness outstanding for that property at any time during the
12-month period before the date of disposition, the property is
debt-financed property. Securities purchased on margin are
considered debt-financed property if the liability incurred in
purchasing them remains outstanding.
A redetermination of the percentage of rent for personal
property is required when either:
1. There is an increase of 100% or more by the placing of
additional or substitute personal property in service, or
2. There is a modification of the lease that changes the rent
charged. Rents from both real and personal property not taxable
on Schedule A, Part I, line 6, may be taxable on Schedule A, Part
I, line 8, if the income is from a controlled organization or on
Schedule A, Part I, line 7, if the property is debt-financed.
Taxability of the rent must be considered in the following order.
Acquisition indebtedness is the outstanding amount of
principal debt incurred by the organization to acquire or improve
the property. Acquisition indebtedness also includes
indebtedness incurred:
1. Before the property was acquired or improved, if the
indebtedness would not have been incurred but for such
acquisition or improvement of the property; or
2. After the property was acquired or improved, if the
indebtedness would not have been incurred but for such
acquisition or improvement and the incurrence of such
indebtedness was reasonably foreseeable at the time of such
acquisition or improvement. See Regulations section
1.514(c)-1(a).
a. Rents not taxed on Schedule A, Part I, line 6, may be
taxed on Schedule A, Part I, line 8.
b. Rents not taxed on Schedule A, Part I, line 6 or line 8, may
be taxed on Schedule A, Part I, line 7.
Rents from personal property not leased with real property
should be reported on Schedule A, Part I, line 12.
See Form 8582 (for trusts) or Form 8810 (for corporations)
and section 469 for limitations on losses from rental activities.
With certain exceptions, acquisition indebtedness doesn’t
include debt incurred by the following.
Description of Property
Line 1. Check the box next to the property description if the
property is used both to carry on exempt activities and to
conduct unrelated trade or business activities.
1. A qualified (section 401) trust in acquiring or improving
real property. See section 514(c)(9).
2. A tax-exempt school (section 170(b)(1)(A)(ii)) and its
affiliated support organizations (section 509(a)(3)) for
indebtedness incurred after July 18, 1984.
Line 4. For each property, attach a statement describing the
3. An organization described in section 501(c)(25) in tax
directly connected deductions and their amounts.
years beginning after December 31, 1986.
Part V. Unrelated Debt-Financed
Income
4. An obligation, to the extent that it is insured by the Federal
Housing Administration, to finance the purchase, rehabilitation,
or construction of housing for low and moderate income
persons, or indebtedness incurred by a small business
investment company licensed after October 22, 2004, under the
Small Business Investment Act of 1958 if such indebtedness is
evidenced by a debenture issued by such company under
section 303(a) of that Act, and held or guaranteed by the Small
Business Administration (see section 514(c)(6)(B) for
limitations).
Use Schedule A, Part V, to compute unrelated debt-financed
income described in sections 512(b)(4) and 514 from
debt-financed property only to the extent that the income doesn’t
constitute income from the conduct of an unrelated trade or
business and isn't specifically taxable under other provisions of
the Code, such as taxable rents from personal property leased
with real property reportable on Schedule A, Part IV (and
Schedule A, Part I, line 6), or taxable interest, annuities,
royalties, and rents from a controlled entity reportable on
Schedule A, Part VI (and Schedule A, Part I, line 8). See
Regulations section 1.514(b)-1(b)(2). Refer to Regulations
section 1.512(a)-6 when reporting income from one or more
debt-financed properties and also for rules permitting the
aggregation of unrelated debt-financed income with other UBTI
in certain circumstances. Gain or loss from the sale or
disposition of debt-financed property is reported on Schedule A,
Part I, line 4.
5. A retirement income account described in section 403(b)
(9) in acquiring or improving real property in tax years beginning
on or after August 17, 2006.
See Pub. 598 for additional exceptions to the rules for
debt-financed property.
Example 1. An exempt organization owns a four-story
building. Two floors are used for an exempt purpose and two
floors are rented (as an unrelated trade or business) for $10,000.
Expenses are $1,000 for depreciation and $5,000 for other
expenses that relate to the entire building. The average
acquisition indebtedness is $6,000, and the average adjusted
basis is $10,000. Both apply to the entire building.
Section 501(c)(7), (9), and (17) organizations should report
income from debt-financed property on Schedule A, Part VII
(and Schedule A, Part I, line 9).
Example 2. Assume the same facts as in Example 1, except
the entire building is rented out as an unrelated trade or business
for $20,000. To complete Schedule A, Part V, for this example,
enter $20,000 on Schedule A, Part V, line 2; $1,000 and $5,000
on Schedule A, Part V, lines 3(a) and 3(b), respectively (since
the entire amount is for debt-financed property); $6,000 and
When a debt-financed property is held for exempt purposes
and other purposes, the organization must allocate the basis,
debt, income, and deductions among the purposes for which the
property is held. Don't include on Schedule A, Part V, amounts
allocated to exempt purposes.
24
Instructions for Form 990-T
$10,000 on Schedule A, Part V, lines 4 and 5 (since the entire
amount is for debt-financed property); 60% on Schedule A, Part
V, line 6; $12,000 on Schedule A, Part V, line 7; and $3,600 on
Schedule A, Part V, line 9.
Line 6. Divide each property's average acquisition
indebtedness for the tax year by that property's average adjusted
basis during the period it is held in the tax year. This percentage
cannot be more than 100%.
Line 1. Enter the address of the debt-financed property. If the
debt-financed property isn’t real property, enter the address
where the property is located and describe the property in Part
XI, Supplemental Information.
Check the box next to the property description if the property
is used both to carry on exempt activities and to conduct
unrelated trade or business activities.
Line 7. The amount of income from debt-financed property
included in unrelated trade or business income is figured by
multiplying the property's gross income by the percentage
computed on line 6.
Line 8 . Enter on line 8 the sum of amounts computed for each
property on line 7. Also enter this amount on Part I, line 7,
column (A).
Line 2. Enter the gross income from debt financed property,
excluding income otherwise included in UBTI. For example, don't
include rents from personal property shown on Schedule A, Part
IV, or rents and interest from controlled organizations shown on
Schedule A, Part VI.
Line 9. For each debt-financed property, multiply the total
deductions directly connected to the income (including the
dividends-received deductions allowed by sections 243, 244,
and 245) by the percentage computed on line 6. However, if the
debt-financed property is depreciable property, figure the
depreciation deduction by the straight line method only and enter
the amount on Schedule A, Part V, line 3a.
Line 3. For amounts shown on line 3a, attach a statement
showing, for each property:
1. The cost or salvage value,
2. The year acquired,
For each debt-financed property, attach statements showing
separately a computation of the depreciation deduction (if any)
reported on Schedule A, Part V, line 3a, (as described earlier)
and a breakdown of the expenses included on Schedule A, Part
V, line 3b. Corporations owning stock that is unrelated
debt-financed property should see Schedule C (Dividends and
Special Deductions) of Form 1120, U.S. Corporation Income Tax
Return, to determine the dividends-received deductions to
include on Schedule A, Part V, line 3b.
When a capital loss for the tax year may be carried back or
carried over to another tax year, the amount to carry over or back
is figured by using the percentage determined above. However,
in the year to which the amounts are carried, don't apply the
debt-basis percentage to determine the deduction for that year.
3. The property’s useful life (rounded to a whole number if
necessary),
4. The years remaining (rounded to a whole number if
necessary),
5. The annual depreciation expense amount, and
6. The allowable depreciation expense amount.
Line 4. Average acquisition indebtedness for any tax year is the
average amount of the outstanding principal debt during the part
of the tax year the property is held by the organization. To figure
the average amount of acquisition debt, determine the amount of
the outstanding principal debt on the first day of each calendar
month during that part of the tax year that the organization holds
the property. Add these amounts together, and divide the result
by the total number of months during the tax year that the
organization held the property. See section 514(a) and the
related regulations for property acquired for an indeterminate
price.
Line 10. On line 10, enter the sum of amounts computed for
each property on line 9. Also enter this amount on Part I, line 7,
column (B).
Line 11. Enter the total dividends-received deductions (after
reduction, when applicable, by the debt-basis percentage(s))
included on Schedule A, Part V, line 9.
1. The average amount of acquisition debt,
2. The percent allocable to debt-financed income, and
3. The product of (1) multiplied by (2).
Part VI. Interest, Annuities, Royalties,
and Rents From Controlled
Organizations
Line 5. The average adjusted basis for debt-financed property
is the average of the adjusted basis of the property on the first
and last days during the tax year that the organization holds the
property. Determine the adjusted basis of property under section
1011. Adjust the basis of the property by the depreciation for all
earlier tax years, whether or not the organization was exempt
from tax for any of these years. Similarly, for tax years during
which the organization is subject to tax on UBTI, adjust the basis
of the property by the entire amount of allowable depreciation,
even though only a part of the deduction for depreciation is taken
into account in figuring UBTI.
Under section 512(b)(13), interest, annuities, royalties, and rents
received or accrued (directly or indirectly) by a controlling
organization from a controlled organization are subject to tax,
whether or not the activity conducted by the controlling
organization to earn these amounts is a trade or business or is
regularly conducted. However, see Regulations section
1.512(b)-1(l)(5) regarding amounts taxable under other
provisions of the Code.
Controlled organization. An entity is a “controlled
organization” if the controlling organization owns:
By vote or value, more than 50% of a corporation's stock (for
•
Attach a statement showing, for each property:
1. A brief description of the property,
2. The adjusted basis,
3. The percent allocable to debt-financed income, and
4. The product of (3) multiplied by (4).
an organization that is a corporation);
More than 50% of a partnership's profits or capital interests
•
(for an organization that is a partnership); or
More than 50% of the beneficial interests in an organization
•
(for an organization other than a corporation or partnership).
To determine the ownership of stock in a corporation, apply
the principles of section 318 (constructive ownership of stock).
Apply similar principles to determine the ownership of interests
in a partnership or any other organization.
If no adjustments to the basis of property under section 1011
apply, the basis of the property is cost.
See section 514(d) and the related regulations for the basis of
debt-financed property acquired in a complete or partial
liquidation of a corporation in exchange for its stock.
25
Instructions for Form 990-T
organization and buys other property used for the organization's
exempt function within a period beginning 1 year before the date
of the sale, and ending 3 years after the date of the sale, the gain
from the sale will be recognized only to the extent that the sales
price of the old property is more than the cost of the other
property. The other property need not be similar in type or use to
the old property. The organization must notify the IRS of the sale
by a statement attached to the return, or other written notice.
Column 3. Enter the net unrelated income (or net unrelated
loss) of each controlled entity listed that is exempt from tax under
section 501(a).
Column 7. Enter the taxable income of each nonexempt
controlled organization.
Column 8. Enter the net unrelated income (or net unrelated
loss) of each controlled entity listed that isn't exempt from tax
under section 501(a). Net unrelated income is that portion of the
controlled entity's taxable income that would be UBTI if the entity
were exempt under section 501(a) and had the same exempt
purposes as the controlling organization. Net unrelated loss is
the controlled organization's NOL adjusted under rules similar to
those used to determine net unrelated income.
To compute the gain on the sale of depreciable property, see
the instructions for Part V, line 5, to determine the adjusted basis
of the property.
Column 3. Deduct only those expenses that are directly
connected to the net investment income. Allocate deductions
between exempt activities and other activities where necessary.
The organization may not take the dividends-received
deductions in figuring net investment income because they aren't
treated as directly connected with the production of gross
income.
Column 4 or 9. For each controlled organization, enter the total
of specified payments received from each controlled
organization. If the organization received both specified
payments and qualifying specified payments from a controlled
organization, enter specified payments on one line and
qualifying specified payments on another so that there are dual
entries for that controlled organization.
Column 4. Section 501(c)(7), (9), and (17) organizations may
set aside income that would otherwise be taxable under section
512(a)(3). However, income derived from an unrelated trade or
business may not be set aside and thus can’t be exempt function
income. In addition, any income set aside and later used for
other purposes must be included in income.
Column 5 or 10. For specified payments, enter the portion of
column 4 or 9 to the extent that the payment reduced the net
unrelated income (or increased the net unrelated loss) of the
controlled entity.
Section 501(c)(7), (9), and (17) organizations won't be taxed
Column 6 or 11. Enter only those deductions directly
on income set aside for:
connected with the income entered in column 5 or 10.
1. Religious, charitable, scientific, literary, or educational
purposes, or for the prevention of cruelty to children or animals
(and reasonable administration costs directly connected to such
purposes); or
2. The payment of life, sickness, accident, or other benefits
(and reasonable administration costs directly connected to such
benefits) by a section 501(c)(9) or (17) organization. The amount
allowed as a set-aside may not exceed a limit determined using
section 512(a)(3)(E). See sections 512(a)(3)(E) and 419A for
details.
With respect to qualifying specified payments, enter only that
portion of expenses directly connected to the amounts included
in column 5 or 10, that is, the excess of the payment over the
FMV amount, as determined in accordance with section 482.
Don't enter any expenses relating to the portion of such payment
that isn't includible in income under this special rule.
For valuation misstatements regarding qualifying
specified payments, there is a 20% addition to tax. See
!
CAUTION
section 512(b)(13)(E)(ii).
Excess qualifying specified payments. Excess qualifying
specified payments received or accrued from a controlled entity
(that is, the amount of qualifying specified payments in excess of
what would have been paid or accrued if the payments had been
determined under section 482) are included in a controlling
exempt organization's UBTI.
Report income set aside on Schedule A, Part VII, column 4.
Attach a statement listing:
1. The amount set aside for charitable purposes;
2. The amount set aside for reasonable administration costs
directly connected with such amount;
3. The amount set aside for payment of life, sickness,
accident, or other benefit; and
Part VII. Investment Income of a
Section 501(c)(7), (9), or (17)
Organization
4. The amount set aside for reasonable administration costs
directly connected with the payment of such benefits.
Amounts set aside aren't deductible under section 170 or any
other section of the Code.
The organization may elect to treat income set aside by the
date for filing the return, including any extension of time, as
income set aside in the tax year for which the return is filed. The
income set aside must have been includible in gross income for
that earlier tax year.
Although set-aside income may be accumulated, any
accumulation that is unreasonable will be evidence that the set
aside wasn’t for the purposes previously mentioned.
Net investment income set aside must be specifically
earmarked as such, or placed in a separate account or fund
(except for a section 501(c)(9) or (17) organization which, by the
terms of its governing instrument, must use its net investment
income for the payment of life, sickness, accident, or other
benefits, and reasonable administration costs).
Generally, for section 501(c)(7), (9), or (17) organizations,
unrelated trade or business income includes all gross income
from nonmembers with certain modifications. See section 512(a)
(3)(A). Report on Schedule A, Part VII, all income from
investments in securities and other similar investment income
from nonmembers, including 100% of income and directly
connected expenses from debt-financed property. Don't report
nonmember income from debt-financed property on Schedule A,
Part V.
All section 501(c)(7), (9), and (17) organizations figure their
investment income using Schedule A, Part VII. Don't include
interest on state and local governmental obligations described in
section 103(a).
Investment income includes all income from debt-financed
property.
If a section 501(c)(7), (9), or (17) organization (or a title
holding corporation, described earlier) sells property that was
used for the exempt function of the section 501(c)(7), (9), or (17)
These rules apply to a corporation described in section
501(c)(2) (title holding corporation) whose income is payable to
an organization described in section 501(c)(7), (9), or (17) if it
26
Instructions for Form 990-T
files a consolidated return with the section 501(c)(7), (9), or (17)
organization.
of advertising income over direct advertising costs, no loss is
allowable. See Regulations section 1.512(a)-1(f)(2)(ii)(b).
For allocating membership receipts to circulation income, see
Rev. Rul. 81-101, 1981 C.B. 352.
Part VIII. Exploited Exempt Activity
Income, Other Than Advertising
Income
Consolidated periodicals. If an organization publishes two or
more periodicals, it may elect to treat the gross income for all
(but not less than all) periodicals, and deductions directly
connected with those periodicals (including excess readership
costs) as if the periodicals were one to determine its UBTI. This
rule only applies to periodicals published for the production of
income. A periodical is considered published for the production
of income if gross advertising income of the periodical is at least
25% of the readership costs, and the periodical is an activity
engaged in for profit.
If periodicals are consolidated, check the box next to the
periodical name, and attach a statement showing the name of
each periodical in the consolidated group. The attached
statement should include the amounts that correspond to
information for lines 2 through 4. Attach a separate statement for
the consolidated group of publications that includes the amounts
corresponding to the information for lines 5 through 8.
Exempt organizations that have gross income from an unrelated
trade or business activity that exploits an exempt activity (other
than periodical advertising income reportable on Schedule A,
Part IX) should complete Schedule A, Part VIII. See Regulations
section 1.513-1(d)(4)(iv) for a definition of exploited exempt
activity. Report income from advertising other than in a periodical
on Schedule A, Part VIII.
Line 1. Briefly describe the exempt activity being exploited in
an unrelated trade or business activity.
Line 3. An exempt organization may take all deductions directly
connected with the gross income from the unrelated trade or
business activity.
Line 4. Subtract directly connected deductions from the gross
unrelated business income. If unrelated business income
exceeds the directly connected deduction, the exempt
organization may take into account all deductible items
attributable to the exploited exempt activity, with the following
limitations.
Part X. Compensation of Officers,
Directors, and Trustees
Complete columns 1 through 4 for those officers, directors, and
trustees whose salaries or other compensation are allocable to
unrelated business gross income. Don't include in column 4
compensation that is deducted on Schedule A, Part II, lines 2
and 14, or any line of Schedule A, Parts III through IX.
1. Reduce the deductible items of the exempt activity by the
income from the activity.
2. Limit the net amount of deductible items arrived at in item
1 above for the exempt activity to the net unrelated business
income from the exploited exempt activity.
3. Exclude income and expenses of the exempt activity in
figuring a loss carryover or carryback from the unrelated trade or
business activity exploiting the exempt activity.
4. Exclude deductible items of the exempt activity in figuring
unrelated trade or business income from an activity that isn't
exploiting the same exempt activity.
Part XI. Supplemental Information
Use Part XI to explain the organization’s operations, to provide
information for lines that don’t have an embedded attachment to
capture the information to supplement information provided on
an embedded attachment, or to provide any other information in
support of amounts reported on Schedule A. An organization
that associated unrelated trade or business activity with a
different NAICS or Business Activity Code in a prior year than the
NAICS or Business Activity Code shown on the Schedule A for
the current tax year can enter the explanation for the change
here.
As a result, the net includible exploited exempt activity
income is the UBTI minus the excess of the exempt activity
expenses over the exempt activity income. If the income from the
exempt activity exceeds the exempt activity expenses, don't add
that profit to the net income from the unrelated business activity.
Attach a separate statement showing the computation.
For each entry in Part XI, include the Schedule A Part and line
number, a brief description, and the amount (if any). If necessary,
you may also attach a PDF document to provide supplemental
information.
Part IX. Advertising Income
An exempt organization that earned gross income from the sale
of advertising in an exempt organization periodical must
complete Schedule A, Part IX. The part of the advertising income
taken into account is determined as follows.
Paperwork Reduction Act Notice
We ask for the information on these forms to carry out the
Internal Revenue laws of the United States. You are required to
give us the information. We need it to ensure that you are
complying with these laws and to allow us to figure and collect
the right amount of tax. You are not required to provide the
information requested on a form that is subject to the Paperwork
Reduction Act unless the form displays a valid OMB control
number. Books or records relating to a form or its instructions
must be retained as long as their contents may become material
in the administration of any Internal Revenue law. Generally, tax
returns and return information are confidential, as required by
section 6103.
1. If direct advertising costs (expenses directly connected
with advertising income) are more than advertising income
(unrelated business income), deduct that excess in figuring UBTI
from any other unrelated trade or business activity conducted by
the organization.
2. If advertising income is more than direct advertising costs,
and circulation income (exempt activity income) equals or
exceeds readership costs (exempt activity expenses), then UBTI
is the excess of advertising income over direct advertising costs.
3. If advertising income is more than direct advertising costs,
and readership costs are more than circulation income, then
UBTI is the excess of total income (advertising income and
circulation income) over total periodical costs (direct advertising
costs and readership costs).
Estimates of Taxpayer Burden. These include forms in the
990 series and attachments; and Forms 1023, 1024, 1028,
5578, 5884-C, 8038, 8038-B, 8038-CP, 8038-G, 8038-GC,
8038-R, 8038-T, 8038-TC, 8328, 8718, 8282, 8453-TE, 8453-X,
8868, 8870, 8871, 8872, 8879-TE, 8886-T, and 8899 and their
schedules; and all the forms tax-exempt organizations attach to
their tax returns. Time spent and out-of-pocket costs are
4. If the readership costs are more than the circulation
income, and the net readership costs are more than the excess
27
Instructions for Form 990-T
presented separately. Time burden includes the time spent
preparing to file and to file, with recordkeeping representing the
largest component. Out-of-pocket costs include any expenses
incurred by taxpayers to prepare and submit their tax returns.
Examples include tax return preparation and submission fees,
postage and photocopying costs, and tax preparation software
costs. Note that these estimates do not include burden
associated with post-filing activities. IRS operational data
indicate that electronically prepared and filed returns have fewer
arithmetic errors, implying lower post-filing burden.
Reported time and cost burdens are national averages and
do not necessarily reflect a “typical” case. Most taxpayers
experience lower than average burden, with taxpayer burden
varying considerably by taxpayer type. For instance, the
estimated average time burden for all taxpayers filing Forms 990,
990-EZ, 990-PF, 990-T, and 990-N and related forms is 32.8
hours, with an average cost of $921 per return. This average
includes all associated forms and schedules, across all
preparation methods and taxpayer activities.
Fiscal Year 2024 Form 990 Series Tax Compliance Cost Estimates
Form 990
Form 990-EZ
Form 990-PF
Form 990-T
Form 990-N
Projections of the
Number of Returns
to be Filed with IRS 351,100
251,000
69
130,100
53
233,200
42
733,100
5
Estimated Average
Total Time (Hours) 107
Estimated Average
Total
Out-of-Pocket
Costs
$2,900
$600
$2,200
$2,200
$20
Estimated Average
Total Monetized
Burden
$9,900
$1,700
$4,600
$5,700
$100
Estimated Total
Time (Hours)
37,710,000
17,400,000
6,940,000
9,790,000
3,660,000
Estimated Total
Out-of-Pocket
Costs
$1,023,200,000
$152,200,000
$425,200,000
$282,600,000
$594,600,000
$506,400,000
$14,000,000
$71,400,000
Estimated Total
Monetized Burden $3,466,900,000
$1,324,000,000
Note: Amounts above are for FY2024. Reported time and cost burdens are national averages and don’t necessarily reflect a
“typical” case. Most taxpayers experience lower-than-average burden, with taxpayer burden varying considerably by taxpayer type.
Detail may not add due to rounding.
Comments and suggestions, We welcome your comments
about this publication and suggestions for future editions. You
you can write to:
Phone help, If you have questions and/or need help completing
this form, call 877-829-5500. This toll-free telephone service is
available Monday through Friday.
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days a week, at IRS.gov to do the following.
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28
Instructions for Form 990-T
Industry Classification System (NAICS) commonly used
by tax-exempt organizations. If you don’t see a code for
the activity you need to categorize in the list below, refer
to the full list of NAICS codes at Census.gov/NAICS.
Business Activity Codes
The codes listed below that begin with the digits 1
through 8 are a selection from the North American
513110 Newspaper publishers
532289 All other consumer goods rental
621500 Medical and diagnostic
laboratories
Agriculture, Forestry, Hunting,
513120 Periodical publishers
513130 Book publishers
532420 Office machinery and equipment
rental and leasing
533110 Lessors of nonfinancial
intangible assets (except
copyrighted works)
621610 Home health care services
621910 Ambulance services
and Fishing
Code
513140 Directory & mailing list publishers
513190 Other publishers
621990 All other ambulatory health care
110000 Agriculture, forestry, hunting, and
services
fishing
516100 Radio & television broadcasting
623000 Nursing and residential care
facilities
Professional, Scientific, and
Technical Services
stations
111000 Crop production
516210 Media streaming, social
networks, & other content
providers
Mining
Code
623990 Other residential care facilities
624100 Individual and family services
624110 Child & youth services
Code
517000 Telecommunications (including
wired, wireless, satellite, cable &
other program distribution,
resellers, agents, other
541100 Legal services
211100 Oil and gas extraction
211120 Crude petroleum extraction
211130 Natural gas extraction
212000 Mining (except oil and gas)
624200 Community food and housing,
and emergency and other relief
services
541200 Accounting, tax preparation,
bookkeeping, and payroll
services
telecommunications, & Internet
service providers)
624210 Meal delivery programs, soup
541300 Architectural, engineering, and
kitchens, or food banks
related services
Utilities
Data Processing, Web Search
Portals, & Other Information
Services
624310 Vocational rehabilitation services
624410 Childcare services
541380 Testing laboratories & services
Code
541511 Custom computer programming
221000 Utilities
services
Arts, Entertainment, and
Recreation
541519 Other computer-related services
541610 Management consulting services
Construction
Code
230000 Construction
236000 Construction of buildings
Code
541700 Scientific research and
518210 Computing infrastructure
providers, data processing, web
hosting, & related services
Code
development services
711110 Theater companies and dinner
541800 Advertising, public relations, &
related services
theaters
519200 Web search portals, libraries,
Manufacturing
711120 Dance companies
archives, & other info. services
541860 Direct mail advertising
711130 Musical groups and artists
711190 Other performing arts companies
Code
541900 Other professional, scientific,
Finance and Insurance
Code
310000 Manufacturing
and technical services
711210 Spectator sports (including
323100 Printing and related support
541990 Consumer Credit Counseling
Services
sports clubs and racetracks)
activities
522100 Depository credit intermediation
(including commercial banking,
savings institutions, and credit
unions)
711300 Promoters of performing arts,
sports, and similar events
339110 Medical equipment and supplies
manufacturing
Management of Companies and
713110 Amusement and theme parks
713200 Gambling industries
Enterprises
Wholesale Trade
522200 Nondepository credit
Code
intermediation
Code
713910 Golf courses and country clubs
551111 Offices of bank holding
522210 Credit card issuing
522220 Sales financing
522291 Consumer lending
522292 Real estate credit
423000 Merchant wholesalers, durable
713940 Fitness and recreational sports
companies
goods
centers
551112 Offices of other holding
companies
424000 Merchant wholesalers,
nondurable goods
713990 All other amusement and
recreation industries (including
skiing facilities, marinas, and
bowling centers)
Administrative and Support
522299 Intl. secondary market, & other
Retail Trade
nondepository credit
Services
Code
Code
intermediation
Accommodation and Food
Services
441100 Automobile dealers
523000 Securities, commodity contracts,
and other financial investments
and related activities
444100 Building materials and supplies
561000 Administrative and support
dealers
services
Code
523940 Portfolio management &
445100 Grocery & convenience retailers
445200 Specialty food retailers
561300 Employment services
721000 Accommodation
investment advice
561439 Other business service centers
721110 Hotels (except casino hotels)
524113 Direct life insurance carriers
(including copy shops)
449100 Furniture and home furnishings
and motels
524114 Direct health and medical
retailers
561499 All other business support
services
721210 RV (recreational vehicle) parks
and recreational camps
insurance carriers
455000 General merchandise retailers
456110 Pharmacies & drug retailers
524126 Direct property and casualty
insurance carriers
561500 Travel arrangement and
721310 Rooming and boarding houses,
reservation services
dormitories, and workers’ camps
456199 All other health and personal
524130 Reinsurance carriers
561520 Tour operators
care retailers
722320 Caterers
524292 Pharmacy benefit management
561700 Services to buildings and
458000 Clothing, clothing accessories,
shoe, & jewelry retailers
722410 Drinking places (alcoholic
& other third-party administration
dwellings
beverages)
524298 All other insurance-related
activities
459110 Sporting goods retailers
722511 Full-service restaurants
Waste Management and
Remediation Services
Code
562000 Waste management and
remediation services (sanitary
services)
459120 Hobby, toy, & game retailers
722513 Limited-service restaurants
525100 Insurance and employee benefit
459130 Sewing, needlework, & piece
722514 Cafeterias, grill buffets, and
funds
goods retailers
buffets
525920 Trusts, estates, and agency
accounts
459140 Musical instrument & supplies
retailers
722515 Snack and non-alcoholic
beverage bars
525990 Other financial vehicles
459210 Book retailers & news dealers
(including mortgage REITs)
Other Services
(including newsstands)
Educational Services
Real Estate and Rental and
Leasing
Code
Code
459310 Florists
Code
811000 Repair and maintenance
459410 Office supplies & stationery
retailers
611420 Computer training
812300 Dry cleaning and laundry
services
459420 Gift, novelty, and souvenir
retailers
611430 Professional and management
531110 Lessors of residential buildings
and dwellings (including equity
REITs)
development training
812900 Other personal services
812930 Parking lots and garages
459510 Used merchandise retailers
459900 Other miscellaneous retailers
611600 Other schools and instruction
(other than elementary and
secondary schools or colleges
and universities, which should
select a code to describe their
unrelated activities)
531120 Lessors of nonresidential
buildings (except
Transportation and
Warehousing
miniwarehouses)(including
equity REITs)
531130 Lessors of miniwarehouses &
self-storage units (including
equity REITs)
611710 Educational support services
Healthcare and Social
Assistance
Code
480000 Transportation
485000 Transit and ground passenger
531190 Lessors of other real estate
transportation
property (including equity REITs)
493000 Warehousing and storage
531310 Real estate property managers
531320 Offices of real estate appraisers
Code
621110 Offices of physicians
Information
Code
531390 Other activities related to real
621300 Offices of other health
estate
practitioners
512000 Motion picture and sound
532000 Rental and leasing services
621400 Outpatient care centers
recording industries
29
Additional codes
Additional codes listed below that begin
with “9” are not part of the NAICS and are
not listed on the NAICS website
Trade or business. A trade or business
is any activity conducted for the
Appendix A. Definitions
production of income from selling goods
or performing services. An activity must
be conducted with intent to profit to
constitute a trade or business. An activity
doesn’t lose its identity as a trade or
business merely because it is conducted
within a larger group of similar activities
that may or may not be related to the
exempt purpose of the organization. If,
however, an activity conducted for profit
is an unrelated trade or business, no part
of it can be excluded from this
Section 501(c)(3) organization.
Section 501(c)(3) describes certain
organizations which are exempt from
taxation under section 501(a). A 501(c)
(3) organization is an organization
organized and operated exclusively for
charitable purposes. See Regulations
section 1.501(c)(3)-1(a).
Census.gov/NAICS. The non-NAICS
business activity codes are for use on
Form 990-T to identify various types of
investments, including certain
partnership and S corporation interests,
reported as separate trades or
businesses under section 512(a)(6)
without regard to the specific trade or
business engaged in by the partnership
or S corporation. See Regulations
section 1.512(a)-6.
Annual return. An annual return (for
purposes of the public inspection rules
discussed below) is an exact copy of the
Form 990-T that was filed with the IRS,
including all schedules and attachments.
It also includes any amendments to the
original return (amended return).
classification merely because it doesn’t
result in profit.
Non-NAICS Business
Activity Codes
Separate trade or business. An
organization with more than one
unrelated trade or business should refer
to Regulations section 1.512(a)-6 to
determine if two or more trades or
businesses are separate trades or
businesses for purposes of calculating
UBTI.
In the codes below that include “###”
replace “#” with numbers to identify each
interest (nonqualified S corporation or
passive income activity). For example, if
four Schedules A are being filed to report
unrelated trade or business income from
four separate nonqualifying S corporation
interests, the business activity code
entered in item C at the top of the four
Schedules A would be 904001, 904002,
904003, and 904004, respectively.
By annual return (for purposes of the
public inspection rules discussed below),
we mean any annual return (defined
above) that isn't more than 3 years old
from the later of:
The date the return is required to be
•
filed (including extensions), or
Unrelated trade or business income.
Unrelated trade or business income is the
gross income derived from any trade or
business (defined above) regularly
The date that the return is actually
•
filed.
Directly connected expenses. To be
deductible in computing UBTI, expenses,
depreciation, and similar items must
qualify as deductions allowed by section
162, section 167, or other sections, and
must be directly connected with the
conduct of unrelated trade or business
activity.
To be directly connected with the
conduct of an unrelated trade or business
activity, expenses, depreciation, and
similar items must bear a proximate and
primary relationship to the conduct of the
activity. For example, where facilities
and/or personnel are used both to
conduct exempt activities and to conduct
an unrelated trade or business, expenses
and similar items attributable to such
facilities and/or personnel must be
allocated between the two uses on a
reasonable basis. The portion of any
such item allocated to the unrelated trade
or business must bear a proximate and
primary relationship to that unrelated
trade or business.
carried on and not substantially related to
(defined above) the organization's
901101. Investment activities, including:
Debt-financed income (512(b)(4));
Qualifying partnership interests;
•
•
•
•
exempt purpose or function (aside from
the organization's need for income or
funds or the use it makes of the profits).
Qualifying S corporation interests; and
Certain gross income of organizations
Generally, for section 501(c)(7), (9), or
(17) organizations, unrelated trade or
business income is derived from
nonmembers with certain modifications
(see section 512(a)).
For a section 511(a)(2)(B) state
college or university, or a corporation
wholly owned by such a college or
university, unrelated trade or business
income is derived from activities not
substantially related to exercising or
performing any purpose or function
described in section 501(c)(3).
subject to section 512(a)(3), or 501(c)(7),
(9), or (17).
901301. Insurance income derived from
controlled foreign corporations (section
512(b)(17)).
903###. Passive income activities with
controlled organizations.
904###. Nonqualifying S corporation
interests.
You must report each separate
unrelated trade or business using the first
two digits of the NAICS code that most
accurately describes the unrelated trade
or business based on the more specific
NAICS code, such as at the 6-digit level.
Investment activities reported as
An unrelated trade or business
doesn’t include a trade or business:
1. In which substantially all the work
is performed for the organization without
compensation; or
2. That is conducted by a section
501(c)(3) or 511(a)(2)(B) organization
mainly for the convenience of its
members, students, patients, officers, or
employees; or
separate trades or businesses that are
identified with a non-NAICS business
activity code should use the 6-digit code
from the list above. See Regulations
section 1.512(a)-6(b)(1).
Not substantially related to. “Not
substantially related to” means the
activity that produces the income doesn’t
contribute importantly to the exempt
purposes of the organization, other than
the need for funds. Whether an activity
contributes importantly depends in each
case on the facts involved.
Item C at the top of Schedule A
requires a 6-digit entry. Enter a 2-digit
NAICS code by entering the first digits
followed by four zeros.
3. That sells items of work-related
equipment and clothes, and items
normally sold through vending machines,
food dispensing facilities or by snack
bars, by a local association of employees
described in section 501(c)(4), organized
before May 27, 1969, if the sales are for
For details, see Pub. 598, Tax on
Unrelated Business Income of Exempt
Organizations.
30
the convenience of its members at their
usual place of employment; or
4. That sells merchandise
substantially all of which was received by
the organization as gifts or contributions;
or
December 31, 1997. Generally, qualified
sponsorship payment means any
payment to a tax-exempt organization by
a person engaged in a trade or business
in which there is no arrangement or
expectation of any substantial return
benefit by that person other than the use
or acknowledgment of that person's
name, logo, or product lines in
2. For contributions to other
organizations, the amount claimed may
not be more than the smaller of:
a. 30% of UBTI figured without this
deduction; or
b. The amount by which 50% of the
UBTI is more than the contributions
allowed in (1) above.
5. That consists of qualified public
entertainment activities regularly
conducted by a section 501(c)(3), (4), or
(5) organization as one of its substantial
exempt purposes (see section 513(d)(2)
for the meaning of qualified public
entertainment activities); or
An increased limitation may be
available for cash contributions under
section 170(b)(1)(G).
connection with the activities of the
tax-exempt organization. See section
513(i).
Contributions not allowable in
whole or in part because of the
!
6. That consists of qualified
convention or trade show activities
regularly conducted by a section 501(c)
(3), (4), (5), or (6) organization as one of
its substantial exempt purposes (see
section 513(d)(3) for the meaning of
qualified convention and trade show
activities); or
CAUTION
limitations may not be deducted
Appendix B. Charitable
Contribution Deduction
Charitable contributions. Filers should
use the following information regarding
the charitable contribution deduction to
complete Form 990-T, Part I, line 4.
as a business expense but may be
carried over to the next 5 tax years.
Substantiation requirements.
Generally, no deduction is allowed for any
contribution of $250 or more, unless the
organization gets a written
Corporations. The total amount claimed
normally can’t be more than 10% of UBTI
figured without regard to the following.
7. That furnishes one or more
acknowledgment from the donee
organization that shows the amount of
cash contributed, describes any property
contributed, and either gives a
services described in section 501(e)(1)
(A) by a hospital to one or more hospitals
subject to conditions in section 513(e); or
Any deduction for contributions.
•
Any capital loss carryback to the tax
•
description and a good faith estimate of
the value of any goods or services
provided in return for the contribution or
states that no goods or services were
provided in return for the contribution.
The acknowledgment must be obtained
by the due date (including extensions) of
the organization's return, or, if earlier, the
date the return is filed. However, see
section 170(f)(8) and the related
8. That consists of qualified pole
rentals, as defined in section 501(c)(12)
(D), by a mutual or cooperative telephone
or electric company; or
9. That includes activities relating to
the distribution of low-cost articles, each
costing $12.50 (IRC 1 per Rev. Proc.
2022-38, section 3.34(1)) or less, by an
organization described in section 501
and contributions to which are deductible
under section 170(c)(2) or (3) if the
distribution is incidental to the solicitation
of charitable contributions; or
10. That includes the exchange or
rental of donor or membership lists
between organizations described in
section 501 and contributions to which
are deductible under section 170(c)(2) or
(3); or
11. That consists of bingo games as
defined in section 513(f). Generally, a
bingo game isn't included in any
unrelated trade or business if:
year under section 1212(a)(1).
Corporations on the accrual basis can
elect to deduct contributions paid by the
15th day of the 4th month after the end of
the tax year if the contributions are
authorized by the board of directors
during the tax year. Attach a declaration
statement to the return stating that the
resolution authorizing the contributions
was adopted by the board of directors
during the tax year. The declaration
statement must also include the date the
resolution was adopted. See Regulations
section 1.170A-11.
Charitable contributions over the 10%
limitation can’t be deducted for the tax
year, but may be carried over to the next
5 tax years.
In figuring the charitable contributions
deduction, if the corporation has an NOL
carryover to the tax year, the 10% limit is
applied using the taxable income after
taking into account any deduction for the
NOL.
regulations for exceptions to this rule.
Don't attach the acknowledgment to the
return but keep it with the organization's
records.
Note. For contributions of cash, check,
or other monetary gifts (regardless of the
amount), the organization must maintain
a bank record, or a receipt, letter, or other
written communication from the donee
organization indicating the name of the
organization, the date of the contribution,
and the amount of the contribution.
Contributions of property other than
cash. If an organization contributes
property other than cash and claims over
a $500 deduction for the property, it must
attach a statement to the return
a. Wagers are placed, winners are
determined, and prizes are
distributed in the presence of all
persons wagering in that game; and
b. The game doesn’t compete with
bingo games conducted by for-profit
businesses in the same jurisdiction;
and
To figure the amount of any remaining
NOL carryover to later years, taxable
income must be modified. See section
172(b). To the extent charitable
describing the kind of property
contributed and the method used to
determine its FMV. All organizations must
generally complete and attach Form
8283, Noncash Charitable Contributions,
to their returns for contributions of
contributions are used to reduce taxable
income for this purpose and increase an
NOL carryover, a contributions carryover
isn't allowed. See section 170(d)(2)(B).
c. The game doesn’t violate state or
local law; or
Trusts. In general.
property (other than money) if the total
claimed deduction for all property
12. That consists of conducting any
game of chance by a nonprofit
1. For contributions to organizations
described in section 170(b)(1)(A), the
amount claimed may not be more than
50% of the UBTI figured without this
deduction; and
contributed was more than $5,000.
Special rules apply to the contribution of
certain property. See the instructions for
Form 8283. A donee organization must
use Form 8282, Donee Information
Return, to report information to the IRS
and donors about dispositions of certain
organization in the state of North Dakota
and the conducting of the game doesn’t
violate any state or local law; or
13. That consists of soliciting and
receiving qualified sponsorship payments
that are solicited or received after
31
charitable deduction property made
within 3 years after the donor contributed
the property. See the instructions for
Form 8282.
How does a 501(c)(3) organization
make its annual returns available for
public inspection? A 501(c)(3)
organization must make its annual returns
available in two ways.
Appendix C. Public
Inspection of Form
990-T Returns Filed by
Section 501(c)(3)
Organizations
Public inspection requirements of
section 501(c)(3) organizations.
Under section 6104(d), a section 501(c)
(3) organization that files Form 990-T
must make its entire annual exempt
organization business income tax return
(including amended returns) available for
public inspection.
Special rules for contributions of cer-
tain easements in registered historic
districts. The following rules apply to
certain contributions of real property
interests located in a registered historic
district.
By office visitation.
•
By providing copies or making them
•
widely available.
Public inspection by office visitation.
A 501(c)(3) organization must make its
annual returns available for public
inspection without charge at its principal,
regional, and district offices during
regular business hours.
A deduction is allowed for the qualified
•
real property interest, if the exterior of the
building (including the front, side, rear,
and space above the building) is
preserved and no portion of the exterior
is changed in a manner that is
Conditions that may be set for public
inspection at the office. A 501(c)(3)
organization:
inconsistent with its historical character.
See section 170(h)(4)(B).
The Form 990-T and related
May have an employee present,
•
A deduction is allowed on the building
•
schedules must be made available for
public inspection for a period of 3 years
from the date the Form 990-T is required
to be filed, including any extension.
Must allow the individual conducting
•
only (no deduction is allowed for a
structure or land) if located in a registered
historic district. However, if listed in the
National Register, a deduction is also
allowed for structures or land areas. See
section 170(h)(4)(C).
the inspection to take notes freely during
the inspection, and
Must allow an individual to make
•
photocopies of documents at no charge
but only if the individual brings
photocopying equipment to the place of
inspection.
What schedules and attachments to
Form 990-T must be made available
for public inspection? Only schedules,
attachments (statements), and
The organization must also include the
•
following information with the tax return.
supporting documents that relate to the
imposition of tax on UBTI must be made
available for public inspection when
attached to a section 501(c)(3)
Determining if a site is a regional or
district office. A regional or district
office is any office of a 501(c)(3)
organization, other than its principal
office, that has paid employees whose
total number of paid hours a week are
normally 120 hours or more. Include the
hours worked by part-time (as well as
full-time) employees in making that
determination.
What sites aren't considered a
regional or district office. A site isn't
considered a regional or district office if:
1. The only services provided at the
site further the organization's exempt
purposes (for example, daycare, health
care, or scientific or medical research);
and
1. A qualified appraisal (as defined in
section 170(f)(11)(E)) of the qualified
property interest.
2. Photographs of the entire exterior
organization's Form 990-T filed after
August 17, 2006.
of the building.
3. A description of all restrictions on
the development of the building. See
section 170(h)(4)(B)(iii).
The following documents, when
attached to a section 501(c)(3)
organization's Form 990-T filed after
August 17, 2006, aren't required to be
made available for public inspections.
The organization's deduction may be
•
reduced if rehabilitation credits were
claimed on the building. See section
170(f)(14).
Form 926, Return by a U.S. Transferor
•
of Property to a Foreign Corporation.
Form 5471, Information Return of U.S.
•
A $500 filing fee may apply to certain
•
Persons With Respect to Certain Foreign
Corporations.
deductions over $10,000. See section
170(f)(13).
Form 8271, Investor Reporting of Tax
•
Reduced deductions for contributions
for certain property. The organization
must reduce its deduction for
Shelter Registration Number.
Form 8594, Asset Acquisition
•
2. The site doesn’t serve as an office
for management staff, other than
managers who are involved only in
managing the exempt function activities
at the site.
Statement Under Section 1060.
contributions of certain capital gain
property and qualified appreciated stock.
See sections 170(e)(1) and 170(e)(5).
Form 8621, Information Return by a
•
Shareholder of a Passive Foreign
Investment Company or Qualified
Electing Fund.
Special rules for corporations. A
larger deduction is allowed for certain
contributions of:
Form 8832, Entity Classification
•
What if the 501(c)(3) organization
doesn’t maintain a permanent office?
If the 501(c)(3) organization doesn’t
maintain a permanent office, it will
comply with the public inspection by
office visitation requirement by making
the annual returns available at a
Election.
Form 8858, Information Return of U.S.
•
Inventory and other property to certain
•
Persons With Respect to Foreign
Disregarded Entities.
organizations for use in the care of the ill,
needy, or infants (including contributions
of apparently wholesome food (see
section 170(e)(3)(C))); and
Form 8865, Return of U.S. Person With
•
Respect to Certain Foreign Partnerships.
Form 8886, Reportable Transaction
•
Scientific equipment used for research
•
reasonable location of its choice. It must
permit public inspection:
Disclosure Statement.
Form 8913, Credit for Federal
to institutions of higher learning or to
certain scientific research organizations
(see section 170(e)(4)).
•
Within a reasonable amount of time
•
Telephone Excise Tax Paid.
after receiving a request for inspection
(normally, not more than 2 weeks), and
Form 8925, Report of
•
See section 170, the related
regulations, and Pub. 526, Charitable
Contributions.
Employer-Owned Life Insurance
Contracts.
At a reasonable time of day.
•
Optional method of complying. If a
Form 8941, Credit for Small Employer
•
501(c)(3) organization that doesn’t have
a permanent office wishes not to allow an
inspection by office visitation, it may mail
Health Insurance Premiums.
Form 8975, Country-by-Country
•
Report.
32
a copy of the requested documents
instead of allowing an inspection.
However, it must mail the documents
within 2 weeks of receiving the request
and may charge for copying and postage
only if the requester consents to the
charge.
501(c)(3) organizations with a
permanent office but limited or no
hours. Even if a 501(c)(3) organization
has a permanent office but no office
hours or very limited hours during certain
times of the year, it must still meet the
office visitation requirement. To meet this
requirement during those periods when
office hours are limited or not available,
follow the rules under What if the 501(c)
(3) organization doesn’t maintain a
permanent office, earlier.
must immediately provide the local
agent's name, address, and telephone
number to the requester.
Requests for parts of a document
copy. A person can request all or any
specific part or schedule of the annual
returns and the 501(c)(3) organization
must fulfill their request for a copy.
Can an agent be used to provide
copies? A 501(c)(3) organization can
use an agent to provide document copies
for the written requests it receives.
However, the agent must provide the
document copies under the same
The local agent must:
Be located within reasonable proximity
•
to the principal, regional, or district office
where the individual makes the request;
and
Provide document copies within the
•
same time frames as the 501(c)(3)
organization.
conditions that are imposed on the 501(c)
(3) organization itself. Also, if an agent
fails to provide the documents as
Written requests for document cop-
ies. If a 501(c)(3) organization receives
a written request for a copy of its annual
returns (or parts of these documents), it
must give a copy to the requester.
However, this rule only applies if the
request:
required, the 501(c)(3) organization will
continue to be subject to penalties.
Example. The ABC Organization
retained an agent to provide copies for all
written requests for documents. However,
the ABC Organization received a request
for document copies before the agent
did.
The deadline for providing a response
is referenced by the date that the ABC
Organization received the request and
not when the agent received it. If the
agent received the request first, then a
response would be referenced to the date
that the agent received it.
Can a fee be charged for providing
copies? A 501(c)(3) organization may
charge a reasonable fee for providing
copies. Also, it can require the fee to be
paid before providing a copy of the
requested document.
What is a reasonable fee? A fee is
reasonable only if it is no more than the
per-page copying fee charged by the IRS
for providing copies, plus no more than
the actual postage costs incurred to
provide the copies.
What forms of payment must the
501(c)(3) organization accept? The
form of payment depends on whether the
request for copies is made in person or in
writing.
Cash and money orders must be
accepted for in-person requests for
document copies. The 501(c)(3)
organization, if it wishes, may accept
additional forms of payment.
Is addressed to a 501(c)(3)
•
organization's principal, regional, or
district office;
Public Inspection—Providing
Copies
Is delivered to that address by mail,
•
A 501(c)(3) organization must provide
copies of its annual returns to any
electronic mail (email), facsimile (fax), or
a private delivery service approved by the
IRS (see Private Delivery Service, earlier,
for a list); and
individual who makes a request for a
copy in person or in writing unless it
makes these documents widely available.
Gives the address to which the
•
document copies should be sent.
How and when a written request is
fulfilled.
In-person requests for document cop-
ies. A 501(c)(3) organization must
provide copies to any individual who
makes a request in person at the 501(c)
(3) organization's principal, regional, or
district office during regular business
hours on the same day that the individual
makes the request.
Accepted delay in fulfilling an
in-person request. If unusual
circumstances exist and fulfilling a
request on the same day places an
unreasonable burden on the 501(c)(3)
organization, it must provide copies by
the earlier of:
Requested document copies must be
•
mailed within 30 days from the date the
501(c)(3) organization receives the
request.
Unless other evidence exists, a
•
request or payment that is mailed is
considered to be received by the 501(c)
(3) organization 7 days after the postmark
date.
If an advance payment is required,
•
copies must be provided within 30 days
from the date payment is received.
If the 501(c)(3) organization requires
•
The next business day following the
•
payment in advance and it receives a
request without payment or with
day that the unusual circumstances end,
or
insufficient payment, it must notify the
requester of the prepayment policy and
the amount due within 7 days from the
date it receives the request.
The fifth business day after the date of
•
the request.
Examples of unusual circumstances
include:
A request that is transmitted to the
•
Receipt of a volume of requests (for
•
501(c)(3) organization by email or fax is
considered received the day the request
is transmitted successfully.
document copies) that exceeds the
501(c)(3) organization's daily capacity to
make copies,
Certified check, money order, and
either personal check or credit card must
be accepted for written requests for
document copies. The 501(c)(3)
Requested documents can be emailed
•
Requests received shortly before the
•
instead of the traditional method of
mailing if the requester consents to this
method.
end of regular business hours that require
an extensive amount of copying, or
organization, if it wishes, may accept
additional forms of payment.
Requests received on a day when the
•
A document copy is considered as
501(c)(3) organization's managerial staff
capable of fulfilling the request is
Other fee information. If a 501(c)(3)
organization provides a requester with
notice of a fee and the requester doesn’t
pay the fee within 30 days, the 501(c)(3)
organization may ignore the request.
provided on the:
Postmark date,
•
•
•
conducting official duties (for example,
student registration or attending an
off-site meeting or convention) instead of
its regular administrative duties.
Private delivery date,
Registration date for certified or
registered mail,
If a requester's check doesn’t clear on
deposit, the 501(c)(3) organization may
ignore the request.
Postmark date on the sender's receipt
•
Use of local agents for providing
copies. A 501(c)(3) organization may
use a local agent to handle in-person
requests for document copies. If a 501(c)
(3) organization uses a local agent, it
for certified or registered mail, or
Day the email is successfully
•
transmitted (if the requester agreed to
this method).
If a 501(c)(3) organization doesn’t
require prepayment and the requester
33
doesn’t prepay, the 501(c)(3)
1. The Internet posting requirement
is met if:
Takes reasonable precautions to
•
organization must receive consent from
the requester if the copying and postage
charge exceeds $20.
prevent alteration, destruction, or
accidental loss of the document when
posted on its page; and
The document is posted on an Internet
•
page that the 501(c)(3) organization
establishes and maintains, or
Corrects or replaces the document if a
•
501(c)(3) organizations subject to a
harassment campaign. If the IRS
determines that a 501(c)(3) organization
is being harassed, it isn't required to
comply with any request for copies that it
reasonably believes is part of the
harassment campaign.
A group of requests for a 501(c)(3)
organization's annual return is indicative
of a harassment campaign if the requests
are part of a single coordinated effort to
disrupt the operations of the 501(c)(3)
organization rather than to collect
information about it.
The document is posted as part of a
posted document is altered, destroyed, or
lost.
•
database of like documents of other
tax-exempt organizations on an Internet
page established and maintained by
another entity.
4. The notice requirement is met if a
501(c)(3) organization notifies any
individual requesting a copy of its annual
return where the documents are available
(including the Internet address). If the
request is made in person, the 501(c)(3)
organization must notify the individual
immediately. If the request is in writing, it
must notify the individual within 7 days of
receiving the request.
2. An additional posting information
requirement is met if:
The Internet page through which the
•
document is available clearly informs
readers that the document is available
and provides instructions for downloading
the document;
After it is downloaded and viewed, the
•
Penalties
web document exactly reproduces the
image of the annual return as it was
originally filed with the IRS, except for any
information permitted by statute to be
withheld from public disclosure; and
Requests that may be disregarded
without IRS approval. A 501(c)(3)
organization may disregard any request
for copies of all or part of any document
beyond the first two received within any
30-day period or the first four received
within any 1-year period from the same
individual or the same address.
A penalty may be imposed on any person
who doesn’t make the annual returns
(including all required attachments)
available for public inspection according
to the section 6104(d) rules discussed
earlier. If more than one person fails to
comply, each person is jointly and
severally liable for the full amount of the
penalty. The penalty amount is $20 for
each day during which a failure occurs.
The maximum penalty that may be
imposed on all persons for any one
annual return is $10,000.
Any individual with access to the
•
Internet can access, download, view, and
print the document without special
computer hardware or software required
for that format (except software that is
readily available to members of the public
without payment of any fee) and without
payment of a fee to the 501(c)(3)
Making the Annual Returns
Widely Available
A 501(c)(3) organization doesn’t have to
provide copies of its annual returns if it
makes these documents widely available.
However, it must still allow public
organization or to another entity
maintaining the web page.
Any person who willfully fails to
comply with the section 6104(d) public
inspection requirements is subject to an
additional penalty of $5,000.
3. The reliability and accuracy
requirements are met if the entity
maintaining the Internet page:
inspection by office visitation.
How does a 501(c)(3) organization
make its annual returns widely availa-
ble? A 501(c)(3) organization's annual
returns are widely available if it meets all
four of the following requirements.
Has procedures for ensuring the
•
reliability and accuracy of the document
that it posts on the page;
34
Index
A
Exceptions and special rules:
Other tax amounts:
Excess distribution from a passive
foreign investment company
(PFIC) 10
Member income of mutual or
cooperative electric companies.:
Alcohol and Cellulosic Biofuel Fuels
P
Income from qualifying shipping
activities. 15
Credit 19
Partnerships 18
Alternative Minimum Tax (Trusts
Passive loss and at-risk
limitations. 15
Only) 11
Passive foreign investment company
Amortization 21
Exploited Exempt Activity Income,
Payment card and third party network
transactions 16
Appendix B. Charitable Contribution
F
Public Inspection Requirements of
Deduction 31
Appendix C. Public Inspection of
Form 990-T Returns Filed by
R
G
B
Recapture of investment credit:
Gain or loss on disposition of certain
Recapture of low-income housing
credit:
Biodiesel and Renewable Diesel Fuels
General Business Credit:
Credit 19
Interest due under the look-back
method. 11
Refundable small employer tax
credit 11
C
Gross Receipts or Sales:
Advance payments:
Installment sales
Reporting 990-T Information on Other
Returns 8
Certain Activities and Other
I
Information:
Signature or other authority over a
financial account in a foreign
country:
Income from property financed with
S
S Corporations:
Income or (Loss) From a Partnership
Report of Foreign Bank and
Financial Accounts (FBAR)
Qualified tax-exempts:
Exception 18
Interest 21
Change in address:
Interest, Annuities, Royalties, and
Rents From Controlled
Organizations:
Section 263A Uniform Capitalization
Rules:
Section 965 Payments:
Separate trades or businesses:
Dual-use property:
L
Limitations on Deductions:
Compensation of Officers, Directors,
Deductions Related to Property
Supplemental Information:
Signature:
Section 263A Uniform Capitalization
Rules 19
Credit for Small Employer Health
Insurance Premiums:
Transactions Between Related
Tax-exempt eligible small
employer 12
N
T
D
Name and Address:
Tax Due:
Debt-financed property
disposition 17
Pay by credit or debit card:
IRS.gov/E-pay 13
Deductions Not Taken Elsewhere:
Depletion 22
Tax on Noncompliant Facility
Income 11
O
Disposition of property received from
Total of Unrelated Business Taxable
Income Computed From all
Organizations described in section
501(c)(19) 19
Organizations Taxable as
Corporations. 10
E
Total Unrelated Business Taxable
Employer-owned life insurance
Income 9
Other Deductions:
contracts 19
35
Trust filers only:
Unrelated Trade or Business Income:
Qualified Business Income Deduction:
Determines the unrelated business
income separately for each
W
When are section 263A capitalized
costs deductible:
U
Exceptions 20
36