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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
of the interested person's name, in order to protect the Business transactions. Business transactions include but
confidentiality of the substantial contributor. aren't limited to joint ventures and contracts of sale, lease,
Column (b). Describe the relationship between the interested license, insurance, and performance of services, whether
person that benefited from the grant or assistance and the initiated during the organization's tax year or ongoing from a
organization, such as “spouse of the Director.” If “substantial prior year.
contributor” was entered in column (a), enter “substantial Certain management company transactions with former of-
contributor” here as well. If “related to substantial contributor” ficers, etc. A business transaction also includes a transaction
was entered in column (a), then describe the relationship without between the organization and a management company of
referring to specific names, for example, “child of employee of which a former officer, director, trustee, or key employee of the
35% controlled entity of substantial contributor.” organization (within the last 5 tax years, even if not listed on
If an interested person has status as such other than by being Form 990, Part VII, Section A, because the individual didn’t
a substantial contributor or related to one, then make no receive any compensation from the organization) is a direct or
reference to the substantial contributor status. For example, if indirect 35% owner (as measured by stock ownership (voting
grantee Jane Smith is both a substantial contributor and the power or value, whichever is greater) of a corporation, profits or
spouse of Director John Smith, then they must be listed by name capital interest (whichever is greater) in a partnership or limited
in column (a), and column (b) must state “spouse of Director liability company, or beneficial interest in a trust), or an officer,
John Smith” or words to similar effect. director, or trustee.
Column (c). Enter the total dollar amount of grants and other Aggregate reporting. The organization can aggregate multiple
assistance provided to the interested person during the individual transactions between the same parties, or list them
organization's tax year. separately. If aggregation is chosen, report the aggregate
amount in column (c) and describe the various types of
Column (d). Describe the type of assistance provided to the
transactions (for example, “consulting,” “rental of real property”)
interested person.
in column (d).
Column (e). Describe the organization's purpose in providing
Exceptions. Don't report the following in Part IV.
assistance to the interested person.
• Excess benefit transactions reported on Schedule L, Part I.
Schools. Colleges, universities, and primary and secondary • Loans reported (or not required to be reported) on
schools aren't required to identify interested persons to whom Schedule L, Part II.
they provided scholarships, fellowships, and similar financial • Grants and other assistance reported (or not required to be
assistance. Instead, these organizations must, on Part III, group reported) on Schedule L, Part III (however, this exception doesn't
each type of financial assistance (for example, need-based apply to transactions covered by the business transaction
scholarships, merit scholarships, discounted tuition) provided to exception described in the Part III instructions earlier; such
interested persons on separate lines. For each line, the school transactions may need to be reported in Part IV).
should report in column (c), the aggregate dollar amount of each • Compensation reported on Form 990, Part VII, Section A,
type of assistance, the type of assistance in column (d), and the unless the compensation was to a family member of another
purpose of the assistance in column (e), unless such reporting person reported on Form 990, Part VII, Section A.
would be an unauthorized disclosure of student education • Deposits into or withdrawals from a bank account (when the
records under the Family Educational Rights and Privacy Act bank is an interested person) in the ordinary course of business,
(FERPA). Columns (a) and (b) should be left blank for these on the same terms as the bank offers to the general public.
lines. • The organization's charging of membership dues to its
officers, directors, etc.
Part IV. Business Transactions • If the organization transfers funds to an interested person to
make investments on behalf of the organization as its agent or
Involving Interested Persons contractor (but not as part of a joint venture), the amount of the
Report on Part IV business transactions for which payments transaction for purposes of Part IV reporting isn't the entire
were made during the organization's tax year between the amount transferred but the management fees or other service
organization and an interested person, if such payments fees or carried interest (if any) of the interested person.
exceeded the reporting thresholds described below, and • Transactions with publicly traded companies in the ordinary
regardless of when the transaction was entered into by the course of the publicly traded company’s business, on the same
parties. The “ordinary course of business” exception to reporting terms as it generally offers to the public (or more favorable for
business relationships on Form 990, Part VI, line 2, doesn't apply the filing organization).
for purposes of Schedule L, but see the exception below for
publicly traded companies.
Example 1. T, a family member of an officer of the
In general, an organization must report business transactions
organization, serves as an employee of the organization and
on Part IV with an interested person if (a) all payments during the
receives during the organization's tax year compensation of
tax year between the organization and the interested person
$15,000, which isn't more than 1% of the organization's total
exceeded $100,000; (b) all payments during the tax year from a
revenue. The organization is required to report T's compensation
single transaction between such parties exceeded the greater of
as a business transaction on Schedule L, Part IV, because the
$10,000 or 1% of the filing organization's total revenue for the tax
organization's compensation to a family member of an officer
year; (c) compensation payments during the tax year by the
exceeds $10,000, whether or not T's compensation is reported
organization to a family member of a current or former officer,
on Form 990, Part VII.
director, trustee, or key employee of the organization listed on
Form 990, Part VII, Section A, exceeded $10,000; or (d) in the Example 2. X, the child of a current director listed on Form
case of a joint venture with an interested person, the 990, Part VII, Section A, is a first-year associate at a law
organization has invested $10,000 or more in the joint venture, partnership that the organization pays $150,000 during the
whether or not during the tax year, and the profits or capital organization's tax year. The organization isn't required to report
interest of the organization and of the interested person each this business transaction on account of X's employment
exceeds 10% at some time during the tax year. relationship to the law firm.
4 2023 Instructions for Schedule L (Form 990)
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