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                                                                                                                 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 
otherwise noted.                                                               What's New
Contents                                                                  Page Required electronic filing.  If you are an organization or trust 
                                                                               defined in section 511 and need to file Form 990-T, you are 
Purpose of Form . . . . . . . . . . . . . . . . . . . . . . . . . . . .     1  required to file electronically. See When, Where, and How To 
Who Must File     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1  File, later, for more information.
When, Where, and How To File              . . . . . . . . . . . . . . . . . 3  Tax-exempt and governmental entities.       For tax years 
Depository Method of Tax Payment                . . . . . . . . . . . . . . 4  beginning after 2022, applicable entities (such as certain 
Other Forms That May Be Required . . . . . . . . . . . . . .                5  tax-exempt and governmental entities) can elect to treat certain 
Accounting Methods . . . . . . . . . . . . . . . . . . . . . . . . .        6  general business credits as a payment of income tax. See 
                                                                               Applicable Entity Making an Elective Payment Election on IRA 
Specific Instructions     . . . . . . . . . . . . . . . . . . . . . . . . . 8  2022 Credits, later.
Items A Through L       . . . . . . . . . . . . . . . . . . . . . . . . . . 8
                                                                               Section 6417(d)(1)(A) applicable entity.    Form 990-T, Item G 
Part I. Total Unrelated Business Taxable Income                   . . . . . 9  has been updated with a checkbox for applicable entities that 
Part II. Tax Computation        . . . . . . . . . . . . . . . . . . . . .   10 are not normally required to file an annual tax return and are 
Part III. Tax and Payments . . . . . . . . . . . . . . . . . . . .          11 filing Form 990-T to make an elective payment election under 
                                                                               section 6417.
Part IV. Statements Regarding Certain Activities 
and Other Information . . . . . . . . . . . . . . . . . . . .               13 Advanced manufacturing investment credit.   Eligible filers 
Part V. Supplemental Information . . . . . . . . . . . . . . .              13 may elect to treat the advanced manufacturing investment credit 
                                                                               with respect to a facility as a payment of income tax under 
General Instructions — Schedule A (Form 990-T)                      . . .   14 section 48D(d). See section 48D and the Instructions for Form 
Purpose of the Schedule . . . . . . . . . . . . . . . . . . . . .           14 3468.
Specific Instructions—Schedule A (Form 990-T)                       . . .   16 Alternative minimum tax.     The Inflation Reduction Act of 2022 
Part I. Unrelated Trade or Business Income                  . . . . . . .   16 (IRA 2022) amended section 55 to impose a new corporate 
Part II. Deductions Not Taken Elsewhere               . . . . . . . . . .   19 alternative minimum tax (CAMT) based on the adjusted financial 
                                                                               statement income (AFSI) of an applicable corporation. See Form 
Part III. Cost of Goods Sold . . . . . . . . . . . . . . . . . . .          23 4626, Alternative Minimum Tax-Corporations, and its 
Part IV. Rent Income . . . . . . . . . . . . . . . . . . . . . . . .        23 Instructions, for more information.
Part V. Unrelated Debt-Financed Income                  . . . . . . . . .   24
Part VI. Interest, Annuities, Royalties, and Rents 
                                                                               General Instructions
From Controlled Organizations                   . . . . . . . . . . . . .   25
Part VII. Investment Income of a Section 501(c)(7),                            Purpose of Form
(9), or (17) Organization             . . . . . . . . . . . . . . . . . .   26 Use Form 990-T and Schedule A (as applicable) to:
Part VIII. Exploited Exempt Activity Income, Other                             • Report unrelated business income;
Than Advertising Income                 . . . . . . . . . . . . . . . . .   27 • Figure and report unrelated business income tax liability;
Part IX. Advertising Income         . . . . . . . . . . . . . . . . . . .   27 • 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 
Trustees        . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   27 undistributed long-term capital gain;
Part XI. Supplemental Information             . . . . . . . . . . . . . .   27 • Request a credit for certain federal excise taxes paid for small 
Business Activity Codes         . . . . . . . . . . . . . . . . . . . . .   29 employer health insurance premiums paid, and
Appendix A. Definitions . . . . . . . . . . . . . . . . . . . . . .         30 • Make (along with filing Form 3800 and the applicable general 
                                                                               business credit form(s)) an elective payment election under 
Appendix B. Charitable Contribution Deduction . . . . .                     31 section 48D or section 6417.
Appendix C. Public Inspection of Form 990-T 
Returns Filed by Section 501(c)(3)                                             Who Must File
Organizations . . . . . . . . . . . . . . . . . . . . . . . . . .           32
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Organizations With Current Unrelated Business 
                                                                               Taxable Income (UBTI)
Future Developments                                                            • Any disregarded entity, domestic, or foreign organization 
For the latest information about developments related to Form                  exempt under section 501(a), section 529(a), or section 529A(a), 
990-T and its instructions, such as legislation enacted after they             if it has gross income of $1,000 or more from a regularly 
were published, go to IRS.gov/Form990T.                                        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

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of cost of goods sold, see Schedule A (Form 990-T), Part III. • Alaska Native Corporations,
Cost of Goods Sold, later. • The Tennessee Valley Authority,
The gross receipts from a gaming business include all • Rural electric cooperatives, and
• Other tax-exempt entities.
! amounts wagered in games, not just the net proceeds
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 more detailed definition of an applicable entity. Entities may rely
Schedule A, Part II, line 14, as other deductions. on the definitions in the proposed regulations for tax years
ending before final regulations are published, provided the entity
A disregarded entity, as described in Regulations follows the proposed regulations in their entirety and in a
! sections 301.7701-1 through 301.7701-3, is treated as a consistent manner with respect to all elections made under
CAUTION branch or division of its parent organization for federal
section 6417. See Proposed Regulations under section 6417.
tax purposes. Therefore, financial information applicable to a
disregarded entity must be reported as the parent organization's The detailed description in the proposed regulations includes
financial information. the following.
• An organization exempt from the tax imposed by subtitle A by
• Colleges and universities of states and other governmental reason of section 501(a);
units, and subsidiary corporations wholly owned by such • The government of an U.S. territory or political subdivision or
colleges and universities. However, a section 501(c)(1) instrumentality thereof;
corporation that is an instrumentality of the United States and • Any State, the District of Columbia, or a political subdivision or
both organized and exempt from tax by an Act of Congress instrumentality thereof;
doesn’t have to file. • The Tennessee Valley Authority;
• Qualified tuition programs described under section 529 that • An Indian tribal government or a subdivision or instrumentality
have $1,000 or more of unrelated trade or business gross thereof;
income. • Any Alaska Native Corporation (as defined in section 3 of the
• Qualified ABLE programs described under section 529A that Alaska Native Claims Settlement Act (43 U.S.C. 1602(m))); and
have $1,000 or more of unrelated trade or business gross • Any corporation operating on a cooperative basis that is
income. engaged in furnishing electric energy to persons in rural areas.
• Trustees for the following trusts that have $1,000 or more of Pre-filing registration requirement. Before you file Form
unrelated trade or business gross income. 990-T, if you intend to make an elective payment election on
1. Individual retirement accounts (IRAs), including traditional Form 3800, you must complete a pre-filing registration for each
IRAs described under section 408(a). property or facility. To register, go to IRS.gov/credits-deductions/
2. Simplified employee pension IRAs (SEP IRAs) described register-for-elective-payment-or-transfer-of-credits. See Pub.
under section 408(k). 5884, Inflation Reduction Act (IRA) and CHIPS Act of 2022
3. Savings incentive match plan for employees of small (CHIPS) Pre-Filing Registration Tool. Also see Registering For
employers IRAs (SIMPLE IRAs) described under section 408(p). and Making Elective Payment and Transfer Elections in the
4. Roth IRAs described under section 408A. Instructions for Form 3800.
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
7. Health savings accounts (HSAs) described under section 223. elective payment election with respect to applicable credits (see
section 6417), and eligible taxpayers making an elective
Each account of a type listed above is treated as a payment election with respect to the advanced manufacturing
! separate trust for unrelated business income tax investment credit under section 48D.
CAUTION purposes (even if there is a single owner or beneficiary Organizations making an elective payment election must
for multiple accounts) and must have its own employer complete and attach Form 3800, General Business Credit, as
identification number (EIN) if it will file Form 990-T to report well as the required form(s) on which you compute each
gross unrelated business taxable income of $1,000 or more. A individual credit. If your organization is filing Form 990-T only to
custodian is treated as a trustee. See section 408(h). Individual make the elective payment election, see Elective Payment
retirement annuities, unlike IRAs, aren't subject to unrelated Election under Which Parts to Complete, later.
business income tax. Proxy tax. Organizations liable for the proxy tax on lobbying
and political expenditures. See Part II, Line 3. Proxy Tax, later, for
IRAs and other tax-exempt shareholders in a RIC or a discussion of the proxy tax. If your organization is only required
TIP REIT filing Form 990-T, only to obtain a refund of income to file because of the proxy tax, see Proxy tax only under Which
tax paid on undistributed long-term capital gains should Parts To Complete, later.
complete Form 990-T, as explained in IRAs and other Other taxes or amounts. Organizations that are liable for
tax-exempt shareholders in a RIC or REIT, later. other taxes (such as tax deferred under section 1291 (Form
990-T, Part II, line 4) or section 1294 (Part III, line 4)), or
Applicable entity making an elective payment organizations liable for other amounts due (or entitled to a refund
election on IRA 2022 credits of, or credit for other amounts such as recapture of tax credits or
interest adjustments (such as recapture of a credit or interest
IRA 2022 extends, modifies, or creates several energy-related due under a look-back rule (Form 990-T, Part III, line 3e)). See a
investment and production tax credits. These credits are taken discussion of these items later. If your organization is required to
as general business credits. IRA 2022 also created new section file Form 990-T only because of these taxes or other amounts,
6417, which permits an applicable entity to make an elective see Other Taxes under Which Parts To Complete, later.
payment election with respect to each applicable credit. Qualified opportunity investment (annual report).
Under section 6417(d)(1)(A), applicable entities are defined Organizations that deferred a capital gain into a qualified
as: opportunity fund (QOF) must file Form 990-T with Schedule D,
• State and local governments, Form 8949, and Form 8997 attached. Each such organization
• Indian tribal governments, must file Form 990-T with Form 8997 attached annually until the

2 Instructions for Form 990-T

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organization disposes of the investment. See the Instructions for Other taxes. Organizations that are required to file Form
Form 8997. 990-T only because they are liable for tax under section 1291 or
tax previously deferred under section 1294, recapture taxes, the
If you are filing Form 990-T only with regard to an
tax on a hospital organization’s non-compliant facility income, or
TIP elective payment election, because of the proxy tax,
other items listed in the instructions for Part III, line 4, must
other taxes, or only to claim a refund, go directly to
complete the following.
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 heading above Part I except items J and K.
the credit for small employer health insurance premiums, see the • The applicable lines of Parts II and III.
instructions for Part III, line 6f, later. • Signature area.
• 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
Organizations with unrelated business taxable income. Form 990-T only because they are liable for amounts due
Organizations with UBTI must complete Form 990-T, and also a because of the recapture of a tax credit, or other items listed in
separate Schedule A (Form 990-T) for each separate unrelated the instructions for Part III, line 3, must complete the following.
trade or business. See Regulations section 1.512(a)-6. • The heading above Part I except items J and K.
Complete all Schedules A (Form 990-T) first. See General • The applicable lines of Parts II and III that require an entry.
Instructions for Schedule A (Form 990-T), later. • Signature area.
Consolidated returns. The consolidated return provisions of • Attach all appropriate forms and/or schedules showing the
section 1501 don't apply to exempt organizations, except for computation of the applicable tax or taxes.
organizations having title holding companies. If a title holding Claim for refund (including special instructions for IRA
corporation described in section 501(c)(2) pays any amount of trustees or direct payments of certain credits). If your only
its net income for a tax year to an organization exempt from tax reason for filing a Form 990-T is to claim a refund or request a
under section 501(a) (or would, except that the expenses of credit, complete the following.
collecting its income exceeded that income), and the corporation • The heading above Part I except items J and K.
and organization file a consolidated return as described below, • Enter -0- on Part I, lines 1 and 11, and Part III, line 4.
then treat the title holding corporation as being organized and • Enter the credit or payment on Part III, lines 6a through 6g, as
operated for the same purposes as the other exempt appropriate.
organization (in addition to the purposes described in section • Part III, lines 7, 10, and 11.
501(c)(2)). • Signature area.
Two organizations exempt from tax under section 501(a), one For claims described below, follow the additional instructions
a title holding company and the other earning income from the for that claim.
first, will be includible corporations for purposes of section IRAs and other tax-exempt shareholders in a RIC or REIT.
1504(a). If the organizations meet the definition of an affiliated If you are an IRA or other tax-exempt shareholder that is invested
group and the other relevant provisions of chapter 6, then these in a RIC or a REIT and file Form 990-T only to obtain a refund of
organizations may file a consolidated return. The parent income tax paid on undistributed long-term capital gains, follow
organization must attach Form 851, Affiliations Schedule, to the the steps under Claim for refund (including special instructions
consolidated return. For the first year a consolidated return is for IRA trustees) above; check the applicable box in item H at the
filed or for the first year a new corporation is added to a top of Form 990-T; and attach Copy B of Form 2439, Notice to
consolidated return, the title holding company must attach Form Shareholder of Undistributed Long-Term Capital Gains.
1122, Authorization and Consent of Subsidiary Corporation To
Composite Form 990-T. If you are a trustee of more than one
Be Included in a Consolidated Income Tax Return. See
IRA invested in a RIC, you may be able to file a composite Form
Regulations section 1.1502-100.
990-T to claim a refund of tax under section 852(b) instead of
Organizations with no UBTI. An organization with no UBTI filing a separate Form 990-T for each IRA. See Notice 90-18,
that needs to file Form 990-T should complete and file Form 1990-1 C.B. 327, for information on who can file a composite
990-T only. Such an organization does not complete or attach return. Complete the steps under Claim for refund (including
Schedule A (Form 990-T) to its return. special instructions for IRA trustees) above and follow the
Elective payment election only. Organizations filing with additional requirements in the notice.
regard to making an elective payment election and have no Backup withholding. If your only reason for filing Form
unrelated business taxable income, including applicable entities 990-T is to claim a refund of backup withholding, complete the
(as defined earlier) not subject to federal income tax and not steps under Claim for refund (including special instructions for
otherwise required to file any annual tax or information return, IRA trustees) above and attach a copy of the Form 1099 showing
must complete the following lines of Form 990-T. the withholding.
• The heading area above Part I, except items B, C, E, J, K, and
L. When, Where, and How To File
• Part II, lines 3 and 7 (enter -0-). When To File
• Part III, lines 6g, 7, 10, and 11.
• Signature area. 15th day of 4th month or 15th day of 5th month. An
In addition, complete and attach Form 3800, and all forms employees' trust defined in section 401(a), an IRA (including
required to compute each applicable credit. SEPs and SIMPLEs), a Roth IRA, a Coverdell ESA, or an Archer
Proxy tax only. Organizations that are required to file Form MSA must file Form 990-T by the 15th day of the 4th month after
990-T only because they are liable for the proxy tax on lobbying the end of its tax year. All other organizations must file Form
and political expenditures must complete the following. 990-T by the 15th day of the 5th month after the end of their tax
• The heading (above Part I) except items J and K. years. If the regular due date falls on a Saturday, Sunday, or legal
• Part II, lines 3 and 7. holiday, file no later than the next business day. If the return is
• Part III. filed late, see Interest and Penalties, later.
• Signature area.
• Attach a statement showing the proxy tax computation.

Instructions for Form 990-T 3

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Extensions.   Filers may request an automatic extension of time     payment system that works in conjunction with EFTPS. Make 
to file Form 990-T by using Form 8868, Application for Automatic    arrangements with your financial institution ahead of time, noting 
Extension of Time To File an Exempt Organization Return.            the institution's availability, deadlines, and costs. To learn more, 
                                                                    go to IRS.gov/SameDayWire.
Note: For 2023, an applicable entity filing Form 990-T solely to    Timeliness of deposits.    The IRS will use business days to 
make an elective payment election that is:                          determine the timeliness of deposits. Business days are any day 
• A State, the District of Columbia, or political subdivision or    that isn’t a Saturday, Sunday, or legal holiday in the District of 
instrumentality or agency thereof;                                  Columbia.
• The Tennessee Valley Authority; or
• 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 
  does not need to file Form 8868 to request an automatic           if it files a late return or fails to pay tax when due. Generally, the 
extension of time to file Form 990-T. For 2023, a paperless         organization isn't required to include interest and penalty 
automatic extension will be provided to each such entity that has   charges on Form 990-T because the IRS can figure the amount 
registered its intention to make an elective payment election and   and bill the organization for it.
has obtained one or more registration numbers.
                                                                    Interest. Interest is charged on taxes not paid by the original 
Amended return.   To correct errors or change a previously filed    due date of the return even if the organization uses Form 8868 to 
return, check box F, “Check box if an amended return,” at the top   request an automatic extension of time to file. Interest is also 
of the return. Also, in Part V, Supplemental Information, include a charged on penalties imposed for failure to file, negligence, 
statement that indicates the line numbers on the original return    fraud, substantial valuation misstatements, and substantial 
that were changed and give the reason for each change.              understatements of tax from the due date (including extensions) 
Generally, the amended return must be filed within 3 years after    to the date of payment. The interest charge is figured at the 
the date the original return was due or 3 years after the date the  underpayment rate determined under section 6621.
organization filed it, whichever is later.
                                                                    Late filing of return.  An organization that fails to file its return 
Where and How To File                                               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 
Required electronic filing.   If you are an organization or trust   the return is late, up to a maximum of 25% of the unpaid tax. The 
defined in section 511 and need to file Form 990-T, you are         minimum penalty for a return that is more than 60 days late is the 
required to file electronically. For additional information, visit  smaller of the tax due or $485. The penalty won't be imposed if 
IRS.gov/E-file.                                                     the organization can show that the failure to file on time was due 
  If you are an applicable entity that is not an organization or    to reasonable cause. If you receive a notice about a penalty after 
trust defined in section 511, and you are filing Form 990-T to      you file this return, reply to the notice with an explanation and we 
make an elective payment election, electronic filing is             will determine if you meet reasonable-cause criteria. Don’t 
encouraged but not required.                                        include an explanation when you file your return.
                                                                    Late payment of tax.    The penalty for late payment of taxes is 
Estimated Tax Payments                                              usually 1/2 of 1% of the unpaid tax for each month or part of a 
Generally, an organization filing Form 990-T must make              month the tax is unpaid. The penalty can’t exceed 25% of the 
installment payments of estimated tax if its estimated tax (tax     unpaid tax. If you receive a notice about a penalty after you file 
minus allowable credits) is expected to be $500 or more. Don't      this return, reply to the notice with an explanation and we will 
include the proxy tax when computing your estimated tax liability   determine if you meet reasonable-cause criteria. Don’t include 
for 2023.                                                           an explanation when you file your return.
Depository Method of Tax Payment                                    Estimated tax penalty.  An organization that doesn’t make 
                                                                    estimated tax payments when due may be subject to an 
The organization must pay any tax due in full by the due date of    underpayment penalty for the period of underpayment. 
the return without extension.                                       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 
Electronic Deposit Requirement                                      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 
The organization must deposit all depository taxes (such as         for details and exceptions.
employment tax, excise tax, and corporate income tax)               Trust fund recovery penalty.     This penalty may apply if certain 
electronically. Generally, electronic funds transfers are made      excise, income, social security, and Medicare taxes that must be 
using the Electronic Federal Tax Payment System (EFTPS). For        collected or withheld aren't paid to the U.S. Treasury. These 
more information about EFTPS or to enroll in EFTPS, go to           taxes are generally reported on:
EFTPS.gov, or call 800-555-4477. To contact EFTPS using             • Form 720, Quarterly Federal Excise Tax Return;
Telecommunications Relay Services (TRS) for people who are          • Form 941, Employer's QUARTERLY Federal Tax Return;
deaf, hard of hearing, or have a speech disability, dial 711 and    • Form 943, Employer's Annual Federal Tax Return for 
then provide the TRS assistant the 800-555-4477 number above        Agricultural Employees; or
or 800-733-4829. Also, see Pub. 966, Electronic Federal Tax         • Form 945, Annual Return of Withheld Federal Income Tax.
Payment System: A Guide to Getting Started.
                                                                      The trust fund recovery penalty may be imposed on all 
Depositing on time. For EFTPS deposits to be made timely,           persons who are determined by the IRS to have been 
the organization must submit the deposit by 8 p.m. Eastern time     responsible for collecting, accounting for, and paying over these 
the day before the deposit is due.                                  taxes, and who acted willfully in not doing so. The penalty is 
Same-day wire payment option.      If you fail to submit a deposit  equal to the unpaid trust fund tax. See the Instructions for Form 
transaction on EFTPS by 8 p.m. Eastern time the day before the      720; or Pub. 15 (Circular E), Employer's Tax Guide, for details, 
date a deposit is due, you can still make your deposit on time by   including the definition of responsible persons.
using the Federal Tax Application (FTA), a same-day federal tax 

4                                                                                                    Instructions for Form 990-T

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Other penalties. There are also penalties that can be imposed • Report distributions from retirement or profit-sharing plans,
for negligence, substantial understatement of tax, reportable IRAs, SEPs, SIMPLEs, and insurance contracts;
transaction understatements, and fraud. See sections 6662, • Report proceeds from real estate transactions; and
6662A, and 6663. • Report distributions from an HSA, an Archer MSA, or a
Medicare Advantage MSA.
Other Forms That May Be Required When filing the above listed Form 1099 series
Forms W-2 and W-3. File Form W-2, Wage and Tax Statement, ! information returns, the organization must also file Form
and Form W-3, Transmittal of Wage and Tax Statements, to CAUTION 1096, Annual Summary and Transmittal of U.S.
report wages, tips, other compensation, withheld income taxes, Information Returns.
and withheld social security/Medicare taxes for employees.
Form 4466. File Form 4466, Corporation Application for Quick
Form 461. Noncorporate taxpayers may need to file Form 461, Refund of Overpayment of Estimated Tax, to apply for a quick
Limitation on Business Losses. See Form 461 and its refund if the organization overpaid its estimated tax for the year
instructions. by at least 10% of its expected income tax liability and at least
Form 720. File Form 720, Quarterly Federal Excise Tax Return, $500.
to report environmental excise taxes, communications and air Form 5498. File Form 5498, IRA Contribution Information, to
transportation taxes, fuel taxes, manufacturers taxes, ship report contributions (including rollover contributions) to any IRA,
passenger tax, and certain other excise taxes. See Trust fund including a SEP, SIMPLE, or Roth IRA, and to report Roth IRA
recovery penalty, earlier. conversions, IRAs, and the fair market value (FMV) of the
Form 926. File Form 926, Return by a U.S. Transferor of account.
Property to a Foreign Corporation, if the organization is required Form 5498-ESA. File Form 5498-ESA, Coverdell ESA
to report certain transfers to foreign corporations under section Contribution Information, to report contributions (including
6038B. rollover contributions) to a Coverdell ESA.
Form 940. File Form 940, Employer's Annual Federal Form 5498-SA. File Form 5498-SA, HSA, Archer MSA, or
Unemployment (FUTA) Tax Return, if the organization is liable for Medicare Advantage MSA Information, to report contributions to
FUTA tax. an HSA or Archer MSA, and the FMV of an HSA, an Archer
Form 941 and Form 943. File Form 941, Employer's MSA, or a Medicare Advantage MSA. See the Instructions for
QUARTERLY Federal Tax Return; or Form 943, Employer's Forms 1099-SA and 5498-SA.
Annual Federal Tax Return for Agricultural Employees, to report Form 5713. File Form 5713, International Boycott Report, if the
income tax withheld, and employer and employee social security organization had operations in, or related to, certain boycotting
and Medicare taxes. Also, see Trust fund recovery penalty, countries.
earlier.
Form 5884-C. File Form 5884-C, Work Opportunity Credit for
Form 945. File Form 945, Annual Return of Withheld Federal Qualified Tax-Exempt Organizations Hiring Qualified Veterans, to
Income Tax, to report income tax withheld from nonpayroll claim the work opportunity credit for qualified first-year wages
distributions or payments, including pensions, annuities, IRAs, paid to qualified veterans who begin working for the organization
gambling winnings, and backup withholding. on or after November 22, 2011, and before January 1, 2026.
Form 965-A and Form 965-B. See Form 965-A, Individual Form 5884-D. File Form 5884-D, Employee Retention Credit for
Report of Net 965 Tax Liability; Form 965-B, Corporate and Real Certain Tax-Exempt Organizations Affected by Qualified
Estate Investment Trust (REIT) Report of Net 965 Tax Liability Disasters, to claim the employee retention credit against certain
and Electing REIT Report of 965 Amounts; and their respective payroll taxes if activities of the organization became inoperable
instructions, for more information. because of damage from a qualified disaster. See the
Form 1098. File Form 1098, Mortgage Interest Statement, to Instructions for Form 5884-D for more information.
report the receipt from any individual of $600 or more of Form 6198. File Form 6198, At-Risk Limitations, if the
mortgage interest (including points) in the course of the organization has a loss from an at-risk activity conducted as a
organization's trade or business and reimbursements of overpaid trade or business or for the production of income.
interest.
Forms 8275 and 8275-R. Taxpayers and income tax return
Forms 1099-A, B, DIV, INT, LTC, MISC, NEC, OID, R, S, and preparers file Form 8275, Disclosure Statement, and Form
SA. Organizations engaged in an unrelated trade or business 8275-R, Regulation Disclosure Statement, to disclose items or
may be required to: positions taken on a tax return or that are contrary to Treasury
• File an information return on Forms 1099-A, B, DIV, INT, LTC, regulations (to avoid parts of the accuracy-related penalty or
MISC, NEC, OID, R, S, and SA; certain preparer penalties).
• Report acquisitions or abandonments of secured property
through foreclosure; Form 8300. File Form 8300, Report of Cash Payments Over
• Report proceeds from broker and barter exchange $10,000 Received in a Trade or Business, if the organization
transactions; received more than $10,000 in cash or foreign currency in one
• Report certain dividends and distributions; transaction or in a series of related transactions. See Form 8300,
• Report interest income; Instructions for Form 8300, and Regulations section
• Report certain payments made on a per diem basis under a 1.6050I-1(c).
long-term care insurance contract, and certain accelerated Form 8582. File Form 8582, Passive Activity Loss Limitations,
death benefits; for trusts that have losses (including prior-year unallowed losses)
• Report miscellaneous income (such as payments to providers from passive activities.
of health and medical services, and miscellaneous income
payments); Form 8697. File Form 8697, Interest Computation Under the
• Report nonemployee compensation; Look-Back Method for Completed Long-Term Contracts, to
• Report original issue discount; figure the interest due or to be refunded under the look-back
method of section 460(b)(2). The look-back method applies to

Instructions for Form 990-T 5

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certain long-term contracts that are accounted for under either Analysis (OTSA). Other penalties, such as an accuracy-related
the percentage method or the completion-capitalized cost penalty under section 6662A, may also apply. See the
method. Instructions for Form 8886 for details.
Form 8810. File Form 8810, Corporate Passive Activity Loss Form 8899. File Form 8899, Notice of Income From Donated
and Credit Limitations, for closely held corporations that have Intellectual Property, to report income from qualified intellectual
losses or credits (including prior-year unallowed losses and property.
credits) from passive activities.
Form 8925. File Form 8925, Report of Employer-Owned Life
Form 8865. File Form 8865, Return of U.S. Persons With Insurance Contracts, which must be filed by every applicable
Respect To Certain Foreign Partnerships, if the organization: policyholder owning one or more employer-owned life insurance
1. Controlled a foreign partnership (that is, owned more than contracts issued after August 17, 2006.
a 50% direct or indirect interest in the partnership); Form 8975. Certain U.S. persons that are the ultimate parent
2. Owned at least a 10% direct or indirect interest in a entity of a U.S. multinational enterprise group with annual
foreign partnership while U.S. persons controlled that revenue for the preceding reporting period of $850 million or
partnership; more are required to file Form 8975. Form 8975 and its
3. Had an acquisition, disposition, or change in proportional Schedules A (Form 8975) must be filed with the income tax
interest in a foreign partnership that: return of the ultimate parent entity of a U.S. multinational
enterprise group for the tax year in or within which the reporting
a. Increased its direct interest to at least 10% or reduced its period covered by Form 8975 ends. For more information, see
direct interest of at least 10% to less than 10%; Form 8975, Schedule A (Form 8975), and the Instructions for
b. Changed its direct interest by at least a 10% interest; or Form 8975 and Schedule A (Form 8975).
4. Contributed property to a foreign partnership in exchange Form 8978. File Form 8978, Partner's Additional Reporting
for a partnership interest if: Year Tax, to report adjustments shown on Form 8986, Partner's
a. Immediately after the contribution, the organization Share of Adjustment(s) to Partnership-Related Items, received
directly or indirectly owned at least a 10% interest in the foreign from a partnership that has elected to push out adjustments to
partnership; or partnership-related items to their partners.
b. The FMV of the property the organization contributed to Form 8990. File Form 8990, Limitation on Business Interest
the foreign partnership in exchange for a partnership interest, Expense Under Section 163(j), to claim a deduction for business
when added to other contributions of property made to the interest unless the taxpayer meets certain specified exceptions.
foreign partnership by the organization or a related person during Also, Form 8990 must be filed by any taxpayer that owns an
the preceding 12-month period, exceeds $100,000. interest in a partnership with current-year or prior-year carryover
Also, the organization may have to file Form 8865 to report excess business interest expense allocated from the
certain dispositions by a foreign partnership of property it partnership.
previously contributed to that foreign partnership if it was a Form 8991. File Form 8991, Tax on Base Erosion Payments of
partner at the time of the disposition. See Form 8865 and its Taxpayers With Substantial Gross Receipts, for any corporation,
separate instructions. other than a RIC, a REIT, or an S corporation, that has aggregate
Form 8886. File Form 8886, Reportable Transaction Disclosure gross receipts of at least $500 million in 1 or more of the 3
Statement, to disclose information for each reportable preceding tax years ending with the preceding tax year.
transaction in which the organization participated. Form 8886 Form 8993. File Form 8993, Section 250 Deduction for
must be filed for each tax year that the federal income tax liability Foreign-Derived Intangible Income (FDII) and Global Intangible
of the organization is affected by its participation in the Low-Taxed Income (GILTI), for the allowance of a deduction for
transaction. The organization may have to pay a penalty if it is the eligible percentage of FDII. The deduction is allowed only to
required to file Form 8886 but doesn’t do so. The following are domestic corporations (not including REITs, RICs, and S
reportable transactions. 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 Form 8995. Refer to Form 8995, Qualified Business Income
$250,000. Deduction Simplified Computation, if you are a trust filing Form
• Certain transactions for which the organization has 990-T and have unrelated business income, to determine if you
contractual protection against disallowance of the tax benefits. have qualified business income (QBI) and may be allowed a QBI
• Any transaction resulting in a loss of at least $10 million in any deduction under section 199A. See the instructions for Form
single year or $20 million in any combination of years. 8995, Part I, line 9.
• Certain transactions identified by the IRS in published
Form 8995-A. Refer to Form 8995-A. Use this form to figure
guidance as a “transaction of interest” (a transaction that the IRS
your qualified business income deduction. Use separate
believes has a potential for tax avoidance or evasion, but hasn’t
Schedules A, B, C, and/or D, as appropriate, to help calculate
yet been identified as a listed transaction).
the deduction.
Form 8886-T. File Form 8886-T, Disclosure by Tax-Exempt
Form 8997. File Form 8997, Initial and Annual Statement of
Entity Regarding Prohibited Tax Shelter Transaction, to disclose
Qualified Opportunity Fund (QOF) Investments, annually to
information with respect to each prohibited tax shelter
report investments held in a QOF at any time during the year.
transaction to which the organization is a party.
See the instructions for Form 8997.
Penalties. The organization may have to pay a penalty if it is
required to disclose a reportable transaction under section 6011 Accounting Methods
and fails to properly complete and file Form 8886. The penalty is
$50,000 ($200,000 if the reportable transaction is a listed An accounting method is a practice a taxpayer follows to
transaction) for each failure to file Form 8886 with its return or for determine the year in which to report revenue and expenses for
failure to provide a copy of Form 8886 to the Office of Tax Shelter federal income tax purposes. An accounting method includes

6 Instructions for Form 990-T

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not only the overall plan of accounting for gross income or Alternatively, if a taxpayer, including a tax-exempt entity, has
deductions (for example, an accrual method or the cash receipts not yet adopted an accounting method for an item of income or
and disbursement method), but also the treatment of an item deduction, a change in how the entity reports the item isn’t a
used in such overall plan. However, a practice that does not change in accounting method. In this case, the procedures
affect the timing for reporting an item of income or deduction for applicable to requests for accounting method changes (the
purposes of determining taxable income is not an accounting requirement to file Form 3115) aren’t applicable. See Rev. Proc.
method. A taxpayer, including a tax-exempt entity, adopts any 2015-13 for the definition of what constitutes an accounting
permissible accounting method in the first year in which it uses method change.
the method in determining its taxable income. See Rev. Proc. Thus, a tax-exempt entity that has never taken into account
2015-13, 2015-5 I.R.B. 419. an item of income or deduction in determining taxable income
An exempt organization may adopt an accounting does not have to request consent to change its method of
reporting that item on its Form 990-T. Additionally, a tax-exempt
CAUTION income, but also for purposes of determining whether
! method not only for purposes of calculating taxable entity that has never been subject to federal income tax on an
taxable income will be subject to federal income tax. For item of income or deduction, but that is required to file a Form
example, a tax-exempt entity may adopt an accounting method 990-T solely due to owing a section 6033(e)(2) proxy tax, does
for an item of income from an unrelated trade or business activity not have to request consent to change its method for reporting
even if the gross income from the activity is less than $1,000 and the item.
is therefore not taxed for federal income tax purposes pursuant Adjustments required when changing an accounting
to Regulations section 1.6012-2(e). method. A taxpayer, including a tax-exempt entity, that changes
its accounting method must generally calculate and report an
An accounting method for an item of income or deduction may adjustment to ensure that no portion of the item being changed
generally be adopted separately for each of the taxpayer’s trades is permanently omitted or duplicated (see section 481(a)).
or businesses. However, in order to be permissible, an However, depending on the specific method change, the IRS
accounting method must clearly reflect the taxpayer’s income. may provide that an adjustment isn’t required or permitted.
Unless instructed otherwise, the organization should generally Generally, a taxpayer, including a tax-exempt entity, will
use the same accounting method on the Form 990-T and all ! recognize a positive section 481(a) adjustment (that is,
schedules to report revenue and expenses that it regularly uses CAUTION an increase to income) ratably over 4 tax years and will
to keep its books and records. recognize a negative section 481(a) adjustment in full in the year
Accounting method change. Once a taxpayer, including a of change. See Rev. Proc. 2015-13 or its successor.
tax-exempt entity, adopts an accounting method for federal
income tax purposes, the taxpayer must generally request the An organization may elect a 1-year adjustment period for a
IRS consent before it can change its accounting method (even if positive section 481(a) adjustment that is less than $50,000. See
the year in which the taxpayer seeks to make the change is a the Instructions for Form 3115 for more information and the
year in which it generates only tax-exempt income or is requirements to make this election.
otherwise not taxed on its taxable income). In most cases, a Include any positive section 481(a) adjustment on
taxpayer requests consent to change an accounting method by Schedule A (Form 990-T), Part I, line 12 (Other income). If the
filing Form 3115, Application for Change in Accounting Method. section 481(a) adjustment is negative, report it as a deduction on
See Rev. Proc. 2015-13, or any successor, for general Schedule A (Form 990-T), Part II, line 14 (Other deductions).
procedures for obtaining consent to change an accounting The section 481(a) adjustment should not be reported on Form
method. See the Instructions for Form 3115 and Pub. 538 for 990-T as a negative number.
more information and exceptions. See Rev. Proc. 2021-34 for However, as discussed above, if a tax-exempt entity has not
additional procedures that may apply for obtaining automatic yet adopted an accounting method for an item, a change in how
consent to change methods of accounting for revenue the entity reports the item for purposes of filing the Form 990-T is
recognition and certain other methods of accounting that may not a change in accounting method. In this case, an adjustment
affect the accounting for revenue recognition. Also see Rev. under section 481(a) isn’t required or permitted.
Proc. 2022-09 for additional procedures that may apply for
obtaining automatic consent to change certain methods of
accounting related to small businesses. Accounting Period

Depending on the specific accounting method change being The return must be filed using the organization's established
requested, the taxpayer may be able to request automatic annual accounting period. If the organization has no established
consent. This means that, as long as the taxpayer follows the accounting period, file the return on the calendar-year basis.
applicable procedures, the taxpayer does not have to wait for
formal approval by the IRS before applying the new accounting Applicable entities such as state and local governmental
method available at Rev. Proc. 2022-14, for the List of Automatic entities and Indian tribal governments that have not established
Changes for 2022; as modified by Rev. Proc. 2022-23; 2022-18 an annual accounting period for purposes of filing a tax return
I.R.B. 1052, available at Rev. Proc. 2022-23, providing guidance should identify their annual accounting period on their first Form
allowing late elections under sections 168(j)(8) and 168(l)(3)(D), 990-T.
and also providing guidance allowing a late election under
section 181(a)(1), for a list of accounting method changes that Fiscal year. If the organization has established a fiscal year
may qualify for automatic consent. accounting period, use the 2023 Form 990-T to report on the
For example, a tax-exempt entity that has adopted an organization's fiscal year that began in 2023 and ended 12
accounting method for an item of income from an unrelated trade months later. A fiscal year accounting period should normally
or business must generally request consent before it can change coincide with the natural operating cycle of the organization. Be
its method of accounting for that item in any subsequent year. certain to indicate in Item A of Form 990-T, the date the
This is true regardless of whether gross income from the organization's fiscal year began in 2023 and the date the fiscal
unrelated trade or business is $1,000 or more in such year ended in 2024.
subsequent year.
To change an accounting period, some organizations may
make a notation on a timely filed Form 990, 990-EZ, 990-PF, or
Instructions for Form 990-T 7

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990-T. Others may be required to file Form 1128, Application To      Name and Address
Adopt, Change, or Retain a Tax Year. For details on which            The name and address on Form 990-T should be the same as 
procedure applies to your organization, see Rev. Proc. 85-58,        the name and address shown on other Forms 990.
1985-2 C.B. 740, and the Instructions for Form 1128.
                                                                       Include the suite, room, or other unit number after the street 
   For the short-period return, figure the tax by placing the        address. If the Post Office doesn’t deliver mail to the street 
organization's taxable income on an annual basis. If the             address and the organization has a P.O. box, show the box 
organization changes its accounting period, file Form 990-T for      number instead of the street address.
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       If the organization receives its mail in care of a third party 
tax year. For details, see section 443.                              (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      CAUTION!
                                                                             organization” and also provide the following when filing 
return on:
                                                                     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 
• Form 990-PF, Return of Private Foundation or Section 4947(a)       disregarded entity)—an amendment to the articles of 
(1) Nonexempt Charitable Trust Treated as a Private Foundation;      incorporation or articles of organization along with proof of filing 
or                                                                   with the state;
• Form 5500, Annual Return/Report of Employee Benefit Plan.          • A trust—an amendment to the trust agreement with the 
                                                                     trustee(s) signature; or
   If so, include on that information return the unrelated business  • An association, or an unincorporated association—an 
gross income and expenses (but not including the specific            amendment to the articles of association, constitution, by-laws, 
deduction claimed on Part I, line 8, or any expense carryovers       or other organizing document with signatures of at least two 
from prior years) reported on Form 990-T for the same tax year.      officers/members.

Rounding Off to Whole Dollars                                        Items A Through L
                                                                     Item A. If the organization has changed its address since it last 
You may round off cents to whole dollars on the organization’s       filed a return, check item A.
return and schedules. If you do round to whole dollars, you must 
round all amounts. To round, drop amounts under 50 cents and                 If a change in address occurs after the return is filed, use 
increase amounts from 50 to 99 cents to the next dollar. For         TIP     Form 8822-B, Change of Address or Responsible 
example, $1.39 becomes $1 and $2.50 becomes $3. If you have                  Party — Business, to notify the IRS of the new address.
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       Item B. Check the box under which the organization receives its 
the total. If you are entering amounts that include cents, make      tax exemption.
sure to include the decimal point. There is no cents column on         Qualified pension, profit-sharing, and stock bonus plans 
the form.                                                            should check the 501 box and enter “a” between the first set of 
                                                                     parentheses. Do not make an entry in the space between the 
Public Inspection Requirements of Section 501(c)                     second parentheses.
(3) Organizations                                                      For other organizations exempt under section 501, check the 
                                                                     box for 501 and enter the section that describes their tax-exempt 
Under section 6104(d), a section 501(c)(3) organization that files   status, for example, 501(c)(3).
Form 990-T must make its entire annual exempt organization             For tax-exempt organizations that don't receive their 
business income tax return (including amended returns)               exemption under section 501, use the following guide.
available for public inspection. See Appendix C. Public 
Inspection of Form 990-T Returns Filed by Section 501(c)(3)          IF you are a                    THEN check this box
Organization, later.                                                 IRA, SEP, or SIMPLE             408(e).
                                                                     Roth IRA                        408A.
Specific Instructions                                                Archer MSA                      220(e).
                                                                     Coverdell ESA                   530(a).
Period Covered
File the 2023 form for calendar year 2023 or a fiscal year           Qualified State Tuition Program 529(a).
beginning in 2023 and ending in 2024. For a fiscal year, fill in the Qualified ABLE Program          529A.
tax year information at the top of the form.

   The 2023 Form 990-T may also be used if:                            Public colleges and universities that have not obtained 
• The organization has a tax year of less than 12 months that        recognition of exemption under section 501(c)(3), and applicable 
begins and ends in 2024, and                                         entities that are not described in section 501(a) should not check 
• The 2024 Form 990-T isn't available at the time the                any box in item B.
organization is required to file its return. The organization must 
show its 2024 tax year on the 2023 Form 990-T and take into          Item C.  Enter the total of the end-of-year assets from the 
account any tax law changes that are effective for tax years         organization's books of account.
beginning after 2023.

8                                                                                                    Instructions for Form 990-T

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Item D. Every organization or entity filing Form 990-T must 1. The corporation is a subsidiary in an affiliated group
have its own employer identification number (EIN). (defined in section 1504) but isn't filing a consolidated return for
the tax year with that group.
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
An employees' trust described in section 401(a) and exempt Excluded member. If the corporation is an "excluded
under section 501(a) should enter its own trust identification member" of a controlled group (see section 1563(b)(2)), it is still
number in this block. considered a member of a controlled group for purposes of item
K.
An IRA trust enters its own EIN in this block. An IRA trust
never enters a social security number (SSN) or the trustee's EIN. Item L. Enter the name and address of the person who has the
An EIN may be applied for in one of the following ways. organization's books and records and the telephone number at
• Online. Go to IRS.gov/EIN. The EIN is issued immediately which they can be reached.
once the application information is validated.
• By mailing or faxing Form SS-4, Application for Employer Part I. Total Unrelated Business
Identification Number. Taxable Income
Note. Only organizations located in the United States or U.S.
Total of Unrelated Business Taxable Income
territories can use the online application. Foreign organizations
must use one of the other methods to apply for an EIN in one of Computed From All Unrelated Trades or
the following ways. Businesses
Item E. If the organization is covered by a group exemption, Line 1. Enter the sum of the positive amounts from all
enter the group exemption number. Schedules A (Form 990-T), Part II, line 18. Don’t include any
Item F. Check this box if the organization previously filed a amount from Schedule A (Form 990-T), Part II, line 18, that is
Form 990-T return with the IRS for a tax year and is now filing less than zero in the computation of total unrelated trade or
another return for the same tax year to amend the previously business income reported on Part I, line 1.
filed return. Also, see Amended return, earlier, for information Line 2. Reserved. Do not enter any amount on this line.
you must include in an amended return.
Item G. Check the box that describes your organization. Charitable Contributions
Check the box for "6417(d)(1)(A) Applicable entity" only if no Line 4. Enter contributions or gifts actually paid within the tax
other checkbox on this line applies. For example, a rural electric year to or for the use of charitable and governmental
cooperative exempt under section 501(c)(12) should check the organizations described in section 170(c). Also, enter any
box for 501(c) Corporation or 501(c) Trust, (as the case may be). unused contributions carried over from earlier years. The
Similarly, a public college or university should check the box for deduction for contributions will be allowed whether or not directly
"State college/university" even if it is filing Form 990-T solely with connected with the conduct of a trade or business. See
regard to an elective payment election. 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
Section 529 organizations check the 501(c) corporation or Years Beginning Before 2018
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 Line 6. Enter the smaller of (a) the amount of NOL arising in tax
checked. years beginning before January 1, 2018, or (b) the amount
Compute your tax in Part II on the appropriate line. If you shown on Part I, line 1.
! 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
Item H. Check if filing Form 990-T only to claim a credit from section 172.
Form 8941, to claim a refund shown on Form 2439, or to claim Only one specific deduction may be taken, regardless of the
the elective payment election amount from Form 3800. number of unrelated businesses conducted. However, a
Item I. Check if you are a 501(c)(3) organization filing a diocese, province of a religious order, or convention or
consolidated return with a 501(c)(2) title holding corporation. association of churches is allowed one specific deduction for
See Consolidated returns, earlier, for additional information. each parish, individual church, district, or other local unit that
regularly conducts an unrelated trade or business. This applies
Item J. Enter the total number of Schedules A attached to Form only to those parishes, districts, or other local units that aren't
990-T. An organization with one or more unrelated trades or separate legal entities but are components of a larger entity
businesses will complete a separate Schedule A for each (diocese, province, convention, or association). Each specific
unrelated trade or business. deduction will be the smaller of $1,000 or the gross income from
Complete all needed Schedules A before completing any unrelated trade or business the local unit conducts. If you
TIP Parts I through V of Form 990-T. 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
Item K. Check “Yes” box if your organization is a corporation unrelated business income, and its allowable specific deduction
and either (1) or (2) below applies. (which can’t exceed the smaller of $1,000 or the local unit’s
gross unrelated business income).

Instructions for Form 990-T 9

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The diocese, province of a religious order, or convention or Tax Rate Schedule for Trusts
association of churches must file a return reporting the gross
income and deductions of all its units that aren't separate legal If the amount on Part II, line 2, is:
Of the amount
entities. These local units can’t file separate returns because Over— But not over— Tax is: over—
they aren't separately incorporated. Local units that are
separately incorporated must file their own returns and can’t be $0 $2,900 10% $0
2,900 10,550 $290 + 24% 2,900
included with any other entity except for a title holding company. 10,550 14,450 2,126 + 35% 10,550
See Consolidated Returns, earlier. 14,450 - - - - - 3,491 + 37% 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
For trust filers only. If you are a trust filing Form 990-T and proxy tax on Part II, line 3, and attach a statement showing the
have unrelated business income, you may have Qualified computation.
Business Income (QBI) and may be allowed a QBI deduction Exempt organizations, except section 501(c)(3) and certain
under section 199A. other organizations, must include certain information regarding
Refer to the instructions for Form 8995, or Form 8995-A, (as lobbying expenditures on Form 990. In addition, organizations
applicable) to determine whether you meet the requirements for may have to provide notices to members regarding their share of
the QBI deduction and how to complete the applicable form. dues to which the expenditures are allocable. See the
Instructions for Form 990 and Rev. Proc. 98-19, 1998-1 C.B. 547,
Line 9. For purposes of calculating the QBI deduction, the for exceptions.
taxable income before the QBI deduction is the amount reported
on Part I, line 7, minus the amount reported on Part I, line 8. If the organization elects not to provide the notices described
earlier, it must pay the proxy tax described in section 6033(e)(2).
Note. For tax years beginning after 2017, the organization If the organization doesn’t include the entire amount of allocable
determines the unrelated business income separately for each dues in the notices, it may have to pay the proxy tax. This tax
unrelated trade or business, and the income for an unrelated isn't applicable to section 501(c)(3) organizations. Figure the
trade or business can’t be less than zero. Since a loss from an proxy tax by multiplying the aggregate amount not included in
unrelated trade or business isn’t included in the UBTI for the tax the notices described earlier by 21%. No deductions are
year due to application of section 512(a)(6), when calculating allowed.
QBI, omit items of income, gain, deduction, and loss from any
unrelated trade or business that operated at a loss. A loss from Other Tax Amounts
an unrelated trade or business will be carried forward to future Line 4. Part II, line 4, is intended to capture any positive tax
years when the trust has income (or gain that is subject to amount that doesn’t have a specific line. An MeF (Internet filing)
unrelated business income tax) from the same unrelated trade or dependency (attachment) captures the detail. Use line 4 to
business and will be used in those years in calculating the QBI. report tax amounts not reported on a specific line in Part II
Additionally, W-2 wages and unadjusted basis immediately after (excluding tax deferred under section 1294, which is included on
the acquisition (UBIA) of qualified property from an unrelated Part III, line 4).
trade or business that operated at a loss for the current tax year • Use this line to report the base erosion minimum tax amount
aren’t used in calculating the limitation on QBI for taxpayers over under section 59A from Form 8991, Part IV, line 5e. Section 59A
the threshold. applies to base erosion payments paid or accrued in tax years
beginning after 2017. See the Instructions for Form 8991 to
Part II. Tax Computation determine if the organization is an applicable taxpayer under
section 59A(e), and, if the organization is an applicable taxpayer,
Organizations Taxable as Corporations to determine the base erosion minimum tax amount. Enter the
Line 1. Multiply Part I, line 11, by 21% (0.21). base erosion minimum tax amount on Part II, line 4.
• Use this line to report the tax and interest on a nonqualified
Trusts withdrawal from a capital construction fund (section 7518).
• Use this line to report the deferred tax amount (defined in
Line 2. Trusts exempt under section 501(a), which otherwise section 1291(c)(1)) that is the aggregate increase in taxes
would be subject to subchapter J (estates, trusts, etc.), are taxed (described in section 1291(c)(2)) on an excess distribution from
at trust rates. This rule also applies to employees' trusts that a passive foreign investment company (PFIC) that is taxable as
qualify under section 401(a). Most trusts figure the tax on the UBTI. See the Instructions for Form 8621, Information Return by
UBTI amount on Part I, line 11, using the Tax Rate Schedule for a Shareholder of a Passive Foreign Investment Company or
Trusts, below. If the tax rate schedule is used, enter the tax on Qualified Electing Fund.
Part II, line 2, and check the “Tax rate schedule” box. If the trust • Use this line to report the increase in tax attributable to a
is eligible for the rates on net capital gains and qualified partner's audit liability. If your organization received Form 8986
dividends, complete Schedule D (Form 1041) and enter on Part from one or more partnerships that have elected to push out
II, line 2, the tax from Schedule D (Form 1041). Check the adjustments to partnership-related items to their partners,
“Schedule D” box on line 2 and attach Schedule D (Form 1041) complete and attach Form 8978. See the Instructions for Form
to Form 990-T. 8978. Include any increase in taxes due from Form 8978, line 14,
A trust with more than one unrelated trade or business on Part II, line 4. If Form 8978 shows a decrease in tax, do not
report that here. Instead, a negative adjustment should be
! that computes its tax on Schedule D (Form 1041) may reported in Part III on line 1b.
CAUTION need to adjust the amount entered on Schedule D (Form
1041), Part V, line 22, to include only the net gain from Unless otherwise indicated, when reporting deferred tax on
Schedule D (Form 1041), line 18a (column 2), or line 19 (column line 4, don't include interest on the tax amount. Instead, report
2), that is included in income on Part I of Form 990-T. such interest as an “other amount due” on Part III, line 3. For
example, interest on tax deferred under section 1291(c)(1),

10 Instructions for Form 990-T

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determined under section 1291(c)(3) is reported on Part III, The organization is required to file Form 3800, General
line 3. Business Credit, to claim any business credit. For a list of
credits, see Form 3800. Include the allowable credit from Form
How to report. Attach a statement to Part II, line 4, showing (a)
3800, Part II, line 38, on Form 990-T, Part III, line 1c.
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 Do not enter the net elective payment election amount
increase in tax attributable to a partner's audit liability (Form ! from Form 3800 on line 1c. Enter the elective payment
8978), the attachment would show “Form 8978” and “$100.” CAUTION election amount from Form 3800 on line 6g.

Alternative Minimum Tax An organization described in section 501(c) which is
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
Trusts attach Schedule I, Alternative Minimum Tax–Estate employees. See the instructions for Part III, line 6f. See the
and Trusts, and enter any tax from Schedule I on this line. instructions to Form 3800.
Corporations may need to complete and attach Form 4626,
Alterative Minimum Tax–Corporation, and enter any tax from Credit for Prior-Year Minimum Tax
Form 4626 on this line. See the Instructions for Form 4626 for
more information. Line 1d. Use Form 8801 to figure the minimum tax credit and
any carryforwards of that credit for trusts. For corporations, use
Tax on Noncompliant Facility Income Form 8827.

Line 6. There is a tax on a hospital organization’s noncompliant Total Credits
facility income. See Regulations section 1.501(r)-2 for more
information. This tax is an income tax and is separate from the Line 1e. Add lines 1a through 1d.
excise tax on a failure to meet the community health needs
assessment requirements of section 501(r)(3) that is reported on Line 3. Other Amounts Due
Form 4720. Line 3a. Recapture of investment credit. Use line 3a to
report recapture of investment tax credit amounts required when
Total certain investment tax credit property ceases to be qualified
property before the end of the recapture period. See Form 4255,
Line 7. Add Part II, lines 3, 4, 5, and 6, to Part II, line 1 or 2,
Recapture of Investment Credit.
whichever applies.
Line 3b. Recapture of low-income housing credit. If the
Part III. Tax and Payments corporation disposed of property (or there was a reduction in the
qualified basis of the property) for which it took the low-income
Foreign Tax Credit housing credit, and the corporation did not follow the procedures
that would have prevented recapture of the credit, it may owe a
• Corporations. See Form 1118, Foreign Tax tax. See Form 8611, Recapture of Low-Income Housing Credit.
Credit—Corporations, for an explanation of when a corporation Line 3c. Interest due under the look-back method --
can claim this credit for payment of income tax to a foreign completed long-term contracts. If the corporation used the
country or U.S. possession. percentage-of-completion method under section 460(b) for
• Trusts. See Form 1116, Foreign Tax Credit (Individual, Estate, certain long-term contracts, figure any interest due or to be
or Trust), for rules on how the trust computes the foreign tax refunded using the look-back method, described in section
credit. 460(b)(2). Use Form 8697 to figure any interest due or to be
Line 1a. Complete the form that applies to the organization and refunded. See the Instructions for Form 8697. Include any
attach the form to Form 990-T. Enter the credit on this line. interest due on line 3c.
Line 3d. Interest due under the look-back method --
Other Credits income forecast method. If the corporation used the income
forecast method to depreciate property, it must figure any
Line 1b. Use line 1b to enter nonrefundable credits not interest due or to be refunded using the look-back method,
identified elsewhere in Part III, line 1. Attach a statement that lists described in section 167(g)(2). Use Form 8866 to figure any
the applicable form and the amount of the credit. Such credits interest due or to be refunded. See the Instructions for Form
may include the following. 8866. Include any interest due on line 3d.
• Any QEV passive activity credits from prior years allowed for
the current tax year from Form 8834, Qualified Electric Vehicle Line 3e. Other Additional amounts due may be included in the
Credit, line 7. Attach Form 8834. total entered on Part III, line 3. Check the box for “Other” if the
• The allowable credits from Form 8912, Credit to Holders of organization includes any of the items discussed. See How to
Tax Credit Bonds, line 12. report below for details on reporting these amounts on an
• If your organization received Form 8986 from one or more attached statement.
partnerships that have elected to push out adjustments to • Interest on deferred tax attributable to installment sales of
partnership-related items to their partners, complete and attach certain time-shares and residential lots (section 453(l)(3)) and
Form 8978. See the Instructions for Form 8978. Enter the certain nondealer installment obligations (section 453A(c)).
amount of any decrease in taxes due from Form 8978, line 14. • Interest due on deferred gain (section 1260(b)).
• If the organization makes the election to be taxed on its
General Business Credit income from qualifying shipping activities, complete Form 8902,
Alternative Tax on Qualifying Shipping Activities, and attach it to
Line 1c. Enter the organization's total general business credit Form 990-T. See Income from qualifying shipping activities, later.
(excluding the work opportunity credit, the employee retention How to report. If the organization checked the “Other” box,
credit, the empowerment zone employment credit, the Indian attach a statement showing the computation of each item
employment credit, and the credit for employer differential wage included in the total for Part III, line 3e. In addition, identify (a) the
payments). See the Instructions for Form 3800 for exceptions. applicable Code section or form number, (b) the type of tax or
Instructions for Form 990-T 11

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interest, and (c) the amount of tax or interest. For example, if the line 6e. See Backup withholding under Which Parts To
organization is reporting $100 of tax due from the recapture of Complete, earlier.
the QEV credit, enter “Section 30—QEV recapture tax—$100”
on the attached statement. Credit for Small Employer Health Insurance
Premiums
Total Tax
Line 6f. An organization described in section 501(c) which is
Line 4. Include any deferred tax on the termination of a section exempt from tax under section 501(a) may be eligible to claim
1294 election applicable to shareholders in a qualified electing the refundable small employer tax credit for a percentage of
fund (QEF) in the amount entered on Part III, line 4. See Form certain health insurance premiums paid on behalf of its
8621, Part VI, and How to report, later. employees.
Subtract from the total entered on Part III, line 4, any deferred A tax-exempt eligible small employer can request the
tax on the corporation's share of undistributed earnings of a refundable credit by attaching Form 8941, Credit for Small
QEF. See Form 8621, Part III. Employer Health Insurance Premiums, showing the calculation
How to report. Attach a statement showing the computation for the amount of the refundable credit claimed. A tax-exempt
of each item included in, or subtracted from, the total on Part III, organization is eligible for the refundable credit if it is an
line 4. Specify (a) the applicable Code section, (b) the type of organization that is described in section 501(c) which is exempt
tax, and (c) the amount of tax. from tax under section 501(a). The organization must keep
records to substantiate the amount of the credit claimed.
Line 5
If a tax-exempt eligible small employer is filing Form
Section 965 TIP 990-T only to request a credit for small employer health
insurance premiums paid, complete the following steps.
Corporation. For tax years 2021 and later, a corporation will not
have any section 965(a) inclusions to report. If the organization 1. Fill in the heading (the area above Part I) except items J
elected to pay its section 965 net tax liability in installments, the and K. Check the box for “Credit from Form 8941” in item H .
organization should attach Form 965-B to Form 990-T. However, 2. Enter -0- on Part I, line 11, and Part III, line 4.
the current-year installment should be paid with a separate 3. Enter the credit from Form 8941, line 20, on Part III,
voucher (which will be mailed to the organization in advance of line 6f.
the payment due date). Don’t include the current-year installment
in the Tax and Payments computation in Part III. 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 Elective payment election
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 Line 6g. Enter the elective payment election amount from Form
tax liability in installments, the trust should attach Form 965-A to 3800. See the Instructions for Form 3800. On line 6g, enter the
Form 990-T, but should not include the current-year installment total net elective payment election amount from Form 3800, Part
in the Tax and Payments computation in Part III (as described III, line 6, column (i).
above for corporations).
Tax on Undistributed Long-Term Capital Gain by
Estimated Tax Payments RIC or Reit
Line 6b. Enter the total estimated tax payments made for the Line 6h. Enter the elective payment election amount from Form
tax year. 3800. See the Instruction for Form 3800.
If an organization is the beneficiary of a trust, and the trust Enter the amount of tax paid by a regulated investment
makes a section 643(g) election to credit its estimated tax company (RIC) or real estate investment trust (REIT) on
payments to its beneficiaries, include the organization's share of undistributed long-term capital gains. Attach each Form 2439
the estimated tax payments in the total amount entered here. you received from each RIC or REIT of which you are a
Attach a statement showing the amount of the section 643(g) shareholder. If you are filing a composite Form 990-T, see
credit amount. Composite Form 990-T under Which Parts To Complete, earlier.

Foreign Organizations Credit for Federal Excise Tax Paid on Fuels
Line 6d. Enter the tax withheld on UBTI from U.S. sources that Line 6i. If you paid a federal excise tax on certain fuels and
isn't effectively connected with the conduct of a trade or qualify for any of the credits listed below, attach Form 4136 to
business within the United States. Attach Form 1042-S, Foreign your return and enter the total credit on line 6i.
Person's U.S. Source Income Subject to Withholding, or another • The biodiesel or renewable diesel mixture credit
form which verifies the withheld tax reported on Part III, line 6d. • The alternative fuel credit.
• A credit for certain nontaxable uses (or sales) of fuel during
Backup Withholding your income tax year.
Line 6e. Recipients of dividend or interest payments must • A credit for blending a diesel-water fuels emulsion.
generally certify their correct tax identification number to the • A credit for exporting dyed fuels or gasoline blendstocks.
bank or other payer on Form W-9. If the payer doesn’t get this • Substainable aviation fuel (SAF) credit.
information, it must withhold part of the payments as “backup See the instructions for Form 4136 for more information about
withholding.” If your organization was subject to erroneous these credits.
backup withholding because the payer didn’t realize you were an
exempt organization and not subject to this withholding, you can Note: Form 8849, Claim for Refund of Excise Taxes, may be
claim credit for the amount withheld by including it on Part III, used to claim a periodic refund of excises taxes instead of

12 Instructions for Form 990-T

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waiting to claim a credit on Form 4136. See the Instructions for If the “Yes” box is checked, write the name of the foreign
Form 8849 and Pub. 510, Excise Taxes. country or countries. If the list of foreign country names will not fit
in the available space, continue the list in Part V, Supplemental
Other Credits Information.
Line 6j. For other credits, check the “Other ” box and provide Get FinCEN Form 114, Report of Foreign Bank and Financial
the following information: Accounts (FBAR), to see if the organization is considered to
• The number of the form used to calculate the credit, or the have an interest in or signature or other authority over a financial
code section that establishes the credit, account in a foreign country (such as a bank account, securities
• A brief description of the credit, and account, or other financial account). If the organization is
• The amount of the credit. required to file this form, file FinCEN Form 114 electronically with
the Department of the Treasury using FinCEN's BSA E-Filing
If necessary, provide information required to claim a specific System. Because FinCEN Form 114 isn't a tax form, don't file it
credit in Part V, Supplemental Information. with Form 990-T.
Other credits may include the following: See FinCEN for more information.
• The credit for ozone-deleting chemicals. Include any credit the
organization is claiming under section 4682(g) for taxes paid on Line 2. The organization may be required to file Form 3520,
chemicals under as propellants in metered-dose inhalers. Annual Return To Report Transactions With Foreign Trusts and
• The amount of current year net section 965 tax liability, For a Receipt of Certain Foreign Gifts, if either of the following applies.
trust, this amount will be from Form 956-A, Part I, column (d), • It directly or indirectly transferred money or property to a
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 • It is treated as the owner of any part of the assets of a foreign
withheld and shown on Form 1099, Claims for refund of backup trust under the grantor trust rules.
withholding should be shown on Part III, line 6e. See the Instructions for Form 3520.
Estimated Tax Penalty An owner of a foreign trust must ensure that the trust
files an annual information return on Form 3520-A,
Line 8. Use Form 2220, Underpayment of Estimated Tax by CAUTION! Annual Information Return of Foreign Trust With a U.S.
Corporations, to see if the organization owes a penalty and its Owner. For details, see the Instructions for Form 3520-A.
amount. Generally, the organization isn't required to file this form
because the IRS can figure the amount of any penalty and notify Line 3. Report any tax-exempt interest received or accrued in
the organization. However, even if the organization doesn’t owe the space provided. Include any exempt-interest dividends
the penalty, you must complete and attach Form 2220 if either of received as a shareholder in a mutual fund or other RIC.
the following applies.
• The annualized income or adjusted seasonal installment Line 4. Use line 4 to show the amount of the NOL carryover to
method is used. the tax year from tax years prior to 2018 (“pre-2018 NOL”), even
• The organization is a “large organization” computing its first if some of the loss is used to offset income on this return. The
required installment based on the prior year's tax. 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
If you attach Form 2220, check the box on Form 990-T, Part carryback or carryover) to a tax year prior to 2023. Do not reduce
III, line 8, and enter the amount of any penalty on this line. the amount by any NOL deduction reported on Part I, line 6.
Tax Due 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
Line 9. You must pay the tax in full when the return is filed. You separate trade or business conducted at any time after 2017
may pay by EFTPS. For more information about EFTPS, see (“siloed post-2017 NOL”) to the tax year. Include the NOL for
Electronic Deposit Requirement, earlier. Also, you may pay by each separate trade or business conducted after 2017, even if a
credit or debit card. Schedule A for any one or more specific trades or businesses
To pay by credit or debit card. For information on paying isn’t included with this return for this tax year. Report the full
your taxes electronically, including by credit or debit card, go to amount of the available NOL for each separate trade or
IRS.gov/E-pay. business, even if some of the loss is used.
Part IV. Statements Regarding Certain In the first column under line 5, identify the business activity
code to which each NOL relates. In the second column, enter the
Activities and Other Information total amount of each siloed post-2017 NOL generated in any
prior year after 2017 and not used to offset income (either as a
Complete all lines in Part IV. carryback or carryover) to a tax year prior to 2023 to offset
income reported on a Schedule A filed for that separate trade or
Line 1. Check “Yes” if either item (1) or (2) below applies. business on this return. Don’t reduce the amount by any NOL
1. At any time during the year the organization had an deduction reported on Schedule A, Part II, line 17. See Separate
interest in or signature or other authority over a financial account Trades or Businesses, later, for information about changing the
in a foreign country (such as a bank account, securities account, business activity code associated with a particular trade or
or other financial account); and business, and the effect of such a change on NOLs.
a. The combined value of the accounts was more than
$10,000 at any time during the year; and Part V. Supplemental Information
b. The accounts were not with a U.S. military banking facility Use Part V to provide the IRS with narrative information required
operated by a U.S. financial institution. for responses to specific questions on Form 990-T, and to
explain the organization’s operations or responses to various
2. The organization owns more than 50% of the stock in any questions.
corporation that would answer “Yes” to item (1).

Instructions for Form 990-T 13

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Signature                                                                The authorization can’t be revoked. However, the 
                                                                       authorization will automatically end no later than the due date 
Corporations.  The return must be signed and dated by the              (excluding extensions) for filing next year's Form 990-T.
president, vice president, treasurer, assistant treasurer, or chief 
accounting officer, or by any other corporate officer (such as a               Enter the paid preparer’s Preparer Tax Identification 
tax officer) authorized to sign. Receivers, trustees, or assignees       !     Number (PTIN), not their SSN, in the “PTIN” box in the 
must also sign and date any return filed on behalf of the              CAUTION paid preparer’s block. Because Form 990-T is publicly 
organization.                                                          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          more information about PTINs, go to IRS.gov/Taxpros.
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  General Instructions — Schedule A 
of them may sign.
  Special rule for IRA trusts.    A trustee of IRA trusts may use      (Form 990-T)
a facsimile signature if all of the following conditions are met.
• Each group of returns sent to the IRS must be accompanied            Purpose of the Schedule
by a letter signed by the person authorized to sign the returns        Complete a separate Schedule A to report income and allowable 
declaring, under penalties of perjury, that the facsimile signature    deductions for each separate unrelated trade or business.
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.                  Separate Trades or Businesses
• The letter must also list each return by the name and EIN of 
the IRA trust.                                                         An exempt organization may engage in more than one unrelated 
• After the facsimile signature is affixed, no entries on the return   trade or business. Prior to the enactment of section 512(a)(6), an 
may be altered other than to correct discernible arithmetic errors.    exempt organization deriving gross income from the regular 
• A manually signed copy (of the letter submitted to the IRS with      conduct of two or more unrelated trades or businesses 
the returns and a record of any arithmetic errors corrected) must      calculated UBTI by determining its aggregate gross income from 
be retained on behalf of the IRA trusts listed in the letter and it    all such unrelated trades or businesses and reducing that 
must be available for inspection by the IRS.                           amount by the aggregate deductions allowed with respect to all 
                                                                       such unrelated trades or businesses. However, section 512(a)(6) 
Paid preparer. If an officer of the organization filled in its return, changed this calculation for exempt organizations with more than 
the paid preparer's space should remain blank. Anyone who              one unrelated trade or businesses so that, in the case of any 
prepares the return but doesn’t charge the organization should         exempt organization with more than one unrelated trade or 
not sign the return. Certain others who prepare the return should      business:
not sign. For example, a regular, full-time employee of the            • UBTI, including for purposes of determining any NOL 
organization, such as a clerk, secretary, etc., should not sign.       deduction, shall be computed separately with respect to each 
  Generally, anyone who is paid to prepare the organization's          trade or business and without regard to section 512(b)(12) 
tax return must sign it and fill in the Paid Preparer Use Only area.   (allowing a specific deduction of $1,000);
  The paid preparer must complete the required preparer                • The UBTI of such exempt organization shall be the sum of the 
information and do the following.                                      UBTI so computed with respect to each trade or business, less a 
• Sign the return in the space provided for the preparer's             specific deduction under section 512(b)(12); and
signature.                                                             • For purposes of section 512(a)(6)(B), UBTI with respect to 
• Give a copy of the return to the organization.                       any such trade or business shall not be less than zero.

Note. A paid preparer may sign original returns, amended                 Thus, under section 512(a)(6), an exempt organization may 
returns, or requests for filing extensions by rubber stamp,            not aggregate income and deductions from all unrelated trades 
mechanical device, or computer software program. Also,                 or businesses when calculating UBTI.
facsimile signatures are authorized.
                                                                         An organization determines whether it regularly carries on 
Paid preparer authorization.   If the organization wants to allow      one or more unrelated trades or businesses by applying sections 
the IRS to discuss this tax return with the paid preparer who          511 through 514. Identify each separate trade or business using 
signed it, check the “Yes” box in the signature area of the return.    the first two digits of the NAICS two-digit code that most 
This authorization applies only to the individual whose signature      accurately describes the unrelated trade or business based on 
appears in the Paid Preparer Use Only section of its return. It        the more specific NAICS code, such as at the six-digit level. 
doesn’t apply to the firm, if any, shown in that section.              Identify activities in the nature of investments, which aren’t 
  If the “Yes” box is checked, the organization is authorizing the     described in NAICS, using the appropriate business activity 
IRS to call the paid preparer to:                                      code described under Non-NAICS Business Activity Codes, 
• Give the IRS any information that is missing from its return;        later.
• 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 
• Respond to certain IRS notices that the organization has             once. For example, a hospital organization that operates several 
shared with the preparer about a math error, offsets, and return       hospital facilities that include pharmacies that sell goods to the 
preparation. The notices won't be sent to the preparer.                general public would include all the pharmacies under the 
  The organization isn't authorizing the paid preparer to receive      NAICS two-digit code for retail trade, regardless of whether the 
any refund check, bind the organization to anything (including         hospital organization keeps separate books and records for each 
any additional tax liability), or otherwise represent the              pharmacy.
organization before the IRS. If the organization wants to expand 
the paid preparer's authorization, see Pub. 947, Practice Before         Once a two-digit NAICS code or business activity code is 
the IRS and Power of Attorney.                                         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

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change the two-digit NAICS code or business activity code Schedule A that apply to the unrelated trade or business
previously used for an unrelated trade or business, you must reported on that Schedule A.
report the change in a statement attached to the Schedule A on
Is gross income $10,000 or less? If the sum of the amounts in
which the activities are reported. The statement should include
all Schedules A (Form 990-T), Part I, line 13, column (A), is
(1) the two-digit NAICS code or business activity code used in
$10,000 or less, complete Schedule A (Form 990-T) and Form
the previous tax year; (2) the two-digit NAICS code or business
990-T as follows.
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 Schedule A (Form 990-T)
describing the reason for the change.
See Regulations section 1.512(a)-6(h)(4) regarding the Complete the heading on each Schedule A.
! 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.
Regulations section 1.512(a)-6(c)(9) describes a 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
CAUTION transition period ended on the first day of the first tax
! transition rule for certain partnership interests. The the amount for Part I, line 2, on Part III, line 8. For Part I, line 6,
year beginning after December 2, 2020. columns (A) and (B), enter the amounts on Part IV, line 3 and
line 5, respectively.
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 Part II. Complete lines 15–18, and if necessary, the attachment
unrelated trade or business to reduce the income from that trade to line 17 (NOL deduction).
or business by the deductions allowed by Chapter 1 that are
directly connected with the carrying on of such trade or
Form 990-T
business. To be “directly connected” with a trade or business, an
item of deduction must have a proximate and primary
relationship to the carrying on of the unrelated trade or business 1. Complete all applicable lines in the heading area.
generating the gross income. See Regulations section 2. Complete all applicable lines as needed to determine the
1.512(a)-1(a). Expenses, depreciation, and similar items appropriate tax, applicable credits, and balance due or refund
attributable solely to the conduct of an unrelated trade or amount.
business are proximately and primarily related to that trade or 3. Complete the signature area.
business and qualify to reduce income from such trade or
business under section 512(a)(1) to the extent such items meet If an entry for a line on Part I or Part II must be made on a
the requirements of section 162 (trade or business expenses), ! different Part of Schedule A, complete only the lines in
section 167 (depreciation), and other relevant provisions. To the CAUTION the Part that reference a specific line on Part I or Part II.
extent that an exempt organization may have items of deduction Leave all other lines in the applicable Part blank.
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 Filers with gross income of $10,000 or less, as described
facilities are used both to carry on exempt activities and to above, don't have to complete Schedule A, Parts III though X
conduct unrelated trade or business activities, then expenses, (except as described above because certain entries must be
depreciation, and similar items attributable to such facilities must made in those sections to populate lines in Parts I and II).
be allocated between the two uses on a reasonable basis. See However, refer to the applicable Parts of Schedule A when
Regulations section 1.512(a)-1(c). The allocation issues under completing Schedule A, Part I, column (A), and in determining
section 512(a)(1) are also relevant under section 512(a)(6) the deductible expenses to include on Schedule A, Part I,
because an exempt organization with more than one unrelated line 13, column (B).
trade or business must not only allocate indirect expenses
among exempt and taxable activities, as described in 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
The allocation of expenses, depreciation, and similar items described in section 501(c)(12), which is treated as member
using an unadjusted gross-to-gross method is not reasonable if income under subparagraph (H) of that section, is excluded from
the cost of providing the good or service is substantially the UBTI.
same but the price charged differs between related and Income from qualifying shipping activities. The
unrelated activities. organization's gross income doesn’t include income from
qualifying shipping activities (as defined in section 1356) if the
Which Parts To Complete organization makes an election under section 1354 on a timely
filed return (including extensions) to be taxed on its notional
Complete a separate Schedule A, Parts I and II, for each shipping income (as defined in section 1353) at the highest
unrelated trade or business. Complete only the lines relevant to corporate rate. If the election is made, the organization generally
the unrelated trade or business being reported on that may not claim any loss, deduction, or credit with respect to
Schedule A. qualifying shipping activities. An organization making this
election may also elect to defer gain on the disposition of a
Is gross income more than $10,000? If the sum of the qualifying vessel under section 1359. Use Form 8902 to figure
amounts in all Schedules A (Form 990-T), Part I, line 13, column the tax. Include the alternative tax on Form 990-T, Part III, line 3e.
(A), is more than $10,000, you must complete all Parts of each
Instructions for Form 990-T 15

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Passive loss and at-risk limitations. Under section 469, How to report income received from a payment
certain taxpayers, including certain tax-exempt organizations, ! card and third-party network transaction. An
may not deduct a passive activity loss (PAL). Such tax-exempt CAUTION organization that receives a Form 1099-K reporting a
organizations (“affected tax-exempt organizations”) include a “gross amount” received from payment card and third-party
trust (such as a trust described in section 501(c), a trust network transactions in the tax year should report these amounts
described in section 401(a), or an IRA), and a corporation if at in the same manner as if the payments weren’t reported on a
any time during the last half of its tax year more than 50% in Form 1099-K. There isn’t any one specific line on which to report
value of the outstanding stock of the corporation is owned, an amount from Form 1099-K; the correct line should be
directly or indirectly, by or for not more than five organizations determined based on the nature of the payments. Some
that are private foundations under section 509(a) or are payments received may constitute unrelated business income;
described in section 401(a) or 501(c)(17) (for example, a stock see the instructions below to determine the appropriate line. For
corporation described in section 501(c)(2) with a 401(a) parent instance, if some of the payments are sales income from an
or private foundation parent). unrelated business, then those payments would be reported on
Part I, line 1a. Retain Form 1099-K with your other records.
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, Specific Instructions—Schedule A
passive activities include (1) trade or business activities in which (Form 990-T)
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 Items A Through E
lines on Form 990-T and Schedule A (Form 990-T) may be Item A. Enter the same name as entered in the heading area of
affected by these rules. Form 990-T.
PALs can’t be used to offset income from nonpassive Item B. Enter the same EIN as entered in item D of Form 990-T.
activities. Passive activity income doesn’t include portfolio
income. Portfolio income (see Temporary Regulations section Item C. On each Schedule A, enter the business activity code
1.469-2T(c)(3)) is income from a nonpassive activity. Portfolio that best describes the organization's unrelated trade or
income includes all gross income, other than income derived in business reported on that Schedule A. Modernized e-File
the ordinary course of a trade or business, that is attributable to requires a 6-digit numerical entry for item C. Unless you are
interest, dividends, annuities, and royalties (by contrast, a bank's using a 6-digit non-NAICS business activity code, you should
receipt of interest is in the ordinary course of a trade or business, enter the 2 digits of the NAICS code in the first two positions and
as is a securities dealer's receipt of dividends). Portfolio income then enter 4 zeros to complete the entry. For example, if the
also includes gain or loss from the disposition of property that 2-digit business activity code 45 (for retail trade) best describes
produces portfolio income or is held for investment (see section your unrelated trade or business, enter “450000” in item C. See
163(d)(5)). The rule treating portfolio income as not from a Business Activity Codes, later, for more information about
passive activity doesn’t apply to the extent that income, of a type business activity codes.
generally regarded as portfolio income, is derived in the ordinary
course of a trade or business. For example, the business income Part I. Unrelated Trade or Business
of a bank typically is largely interest. Similarly, a securities Income
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 Gross Receipts or Sales
the ordinary course of a trade or business with respect to Line 1a. Enter the gross receipts from an unrelated trade or
installment sales and interest charges on accounts receivable. business regularly conducted that involves the sale of goods or
This means that portfolio income may not be reduced by PALs or performance of services.
passive activity credits. For example, any portfolio income
earned by a trust described in section 501(a) that is UBTI (such A section 501(c)(7) social club would report its
as unrelated debt-financed income) may not be offset by PALs TIP restaurant and bar receipts from nonmembers on
from an unrelated trade or business. Schedule A, Part I, line 1, but would report its investment
income on Schedule A, Part I, line 9, and on Schedule A, Part
Section 469(k) provides that the passive activity limitations VII.
must be applied separately to items from each publicly traded
partnership (PTP). A PTP is a partnership whose interests are Advance payments. In general, advance payments are
traded on an established securities market or are readily reported in the year of receipt. To report income from long-term
tradable on a secondary market (or its substantial equivalent). contracts, see section 460. For rules that allow a limited deferral
PALs from a PTP may generally be used only to offset income or of advance payments beyond the current tax year, see section
gain from passive activities of the same PTP. This means that a 451(c). Also, see Regulations sections 1.451-8(c), (d), and (e).
partner in a PTP may not use PALs and passive activity credits For applicability dates, see Regulations section 1.451-8(h). For
from a PTP to offset income from other sources, including information on adopting or changing to a permissible method for
passive activity income from another PTP. Such PALs and reporting advance payments for services and certain goods by
passive activity credits aren't allowed for the tax year. an accrual method corporation, see the Instructions for Form
Generally, PALs are subject to other limitations (for example, 3115. Also, see Rev. Proc. 2021-34.
basis and at-risk limitations) before they are subject to the PAL Installment sales. Generally, the installment method cannot be
limitations. For example, the at-risk rules under section 465 used for dealer dispositions of property. A “dealer disposition” is
generally prohibit trusts and corporations that are affected (a) any disposition of personal property by a person who
tax-exempt organizations from claiming losses from activities in regularly sells or otherwise disposes of personal property of the
excess of the taxpayer’s amount at risk in the activity. same type on the installment plan, or (b) any disposition of real
An affected tax-exempt organization may need to attach Form property held for sale to customers in the ordinary course of the
6198 and either Form 8582 or Form 8810. For more information taxpayer's trade or business.
on these rules, see Pub. 925, Passive Activity and At-Risk Rules.

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These restrictions on using the installment method don't An organization that transfers securities it owns for the
apply to dispositions of property used or produced in a farming contractual obligation of the borrower to return identical
business or sales of time-shares and residential lots for which securities recognizes no gain or loss on that exchange or on the
the organization elects to pay interest under section 453(l)(3). subsequent receipt of identical securities in satisfaction of the
For sales of time-shares and residential lots reported under contractual obligation. To qualify for this treatment, the
the installment method, the organization's income tax is organization must lend the securities under an agreement that
increased by the interest payable under section 453(l)(3). requires:
Enter on Schedule A, Part I, line 1a and line 3, the gross profit 1. The return of identical securities;
on collections from installment sales for any of the following. 2. The payment of amounts equivalent to the interest,
• Dealer dispositions of property before March 1, 1986. dividends, and other distributions that the owner of the securities
• Dispositions of property used or produced in the trade or would normally receive; and
business of farming. 3. The risk of loss or opportunity for gain not be lessened.
• Certain dispositions of time-shares and residential lots
reported under the installment method. See sections 512(a)(5) and 1058(b) for details.
Attach Form 6252 to show information about each installment Debt-financed property disposition. The amount of gain or
sale. loss to be reported on the sale, exchange, or other disposition of
Nonaccrual experience method. Accrual method debt-financed property is the same percentage as the highest
organizations aren't required to accrue certain amounts to be acquisition indebtedness for the property for the 12-month
received from the performance of services that, on the basis of period before the date of disposition is to the average adjusted
their experience, won't be collected, if: basis of the property. The percentage may not be more than
• The services are in the field of health, law, engineering, 100%. See the instructions for Schedule A, Part V, line 5, to
architecture, accounting, actuarial science, performing arts, or determine adjusted basis and average adjusted basis.
consulting; or If debt-financed property is depreciable or depletable
• The organization's average annual gross receipts for the 3 property, the provisions of sections 1245, 1250, 1252, 1254, and
prior tax years doesn’t exceed $29 million. 1255 must be considered first.
This provision doesn’t apply to any amount if interest is Example. On January 1, 2022, an exempt educational
required to be paid on the amount or if there is any penalty for corporation, using $288,000 of borrowed funds, purchased an
failure to timely pay the amount. See Regulations section office building for $608,000. The only adjustment to basis was
1.448-3. Organizations that qualify to use the nonaccrual $29,902 for depreciation (straight line method under MACRS
experience method should attach a statement showing total over the 39-year recovery period for nonresidential real
gross receipts, amounts not accrued as a result of the property). The corporation (section 501(c)(3) organization) sold
application of section 448(d)(5), and the net amount accrued. the building on December 31, 2023, for $640,000. At the date of
Enter the net amount on Schedule A, Part I, line 1a. sale, the adjusted basis of the building was $578,098 ($608,000
− $29,902) and the indebtedness remained at $288,000. The
Gain or loss on disposition of certain brownfield property. adjusted basis of the property on the first day of the year of
Gain or loss from the qualifying sale, exchange, or other disposition was $593,037. The average adjusted basis is
disposition of a qualifying brownfield property (as defined in $585,568 (($593,037 + $578,098) ÷ 2). The debt/basis
section 512(b)(19)(C)), which was acquired by the organization percentage is 49% ($288,000 ÷ $585,568).
after 2004, is excluded from unrelated business taxable income
The taxable gain is $30,332 (49% × ($640,000 − $578,098)).
and is excepted from the debt-financed rules for such property.
This is a long-term capital gain. A corporation should enter the
See sections 512(b)(19) and 514(b)(1)(E).
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
Capital Gain Net Income applicable. In either scenario (a corporation or a trust), the
Line 4a. Generally, organizations required to file Form 990-T educational organization must attach a statement to Form 990-T,
(except organizations described in sections 501(c)(7), (9), and in addition to the Schedule D, showing how the gain was figured
(17)) aren't taxed on the net gains from the sale, exchange, or along the lines described in this example, if the details weren’t
other disposition of property. However, net capital gains on provided with the Schedule D.
debt-financed property, capital gains on cutting timber, and Disposition of property received from taxable subsidiary
ordinary gains on sections 1245, 1250, 1252, 1254, and 1255 and used in unrelated business. A taxable 80%-owned
property are taxed. See Form 4797, Sales of Business Property, subsidiary corporation of one or more tax-exempt entities is
and its instructions for additional information. generally subject to tax on a distribution in liquidation of its
Also, any capital gain or loss passed through from an S assets to its exempt parent (or parents). See section 337. The
corporation or any gain or loss on the disposition of S assets are treated as if sold at FMV.
corporation stock by a qualified tax-exempt organization (see S “Tax-exempt entities” for this purpose include organizations
Corporations, later) is taxed as a capital gain or loss and described in sections 501(a), 529, 529A, and 115; charitable
reported on Part I, line 4. remainder annuity trusts or unitrusts; U.S. (including states) and
Capital gains and losses should be reported by a trust on foreign governments; Indian tribal governments and certain
Schedule D (Form 1041), Capital Gains and Losses, and by a corporations; international organizations; and similar non-taxable
corporation on Schedule D (Form 1120), Capital Gains and organizations.
Losses (and Form 8949, Sale and Other Dispositions of Capital A taxable corporation that transfers substantially all of its
Assets). Schedule D of Form 1041 or Form 1120 (and Form assets to a tax-exempt entity in a transaction that otherwise
8949, if applicable) must be attached to Form 990-T. qualifies for nonrecognition treatment must recognize gain on the
If you deferred a capital gain into a QOF, you must attach transaction as if it sold the assets at FMV. However, such a
Schedule D, Form 8949, and Form 8997 to your Form 990-T. You transfer isn't taxable if it qualifies as a like-kind exchange under
will need to annually file Form 8997 until you dispose of the section 1031 or an involuntary conversion under section 1033. In
investment. See the Instructions for Form 8997. such a case, the built-in appreciation is preserved in the
replacement property received in the transaction. A “taxable

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corporation” is any corporation that isn't a tax-exempt entity as or business, and its share of the partnership deductions directly
defined above, including an S corporation. 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 S Corporations
tax-exempt entity immediately before the change in status (thus Qualified tax-exempt organizations can be shareholders in an S
subjecting it to the tax on a deemed sale for FMV). This rule corporation without the S corporation losing its status as an S
doesn’t apply where the taxable corporation becomes exempt corporation. Qualified tax-exempt organizations that hold stock
within 3 years of formation (within 7 years of formation for section in an S corporation treat their stock interest as an interest in an
501(c)(7) organizations), or had previously been exempt and unrelated trade or business. All items of income, loss, or
within several years (generally a period of 3 years) regains deduction that the organization receives as a shareholder of the
exemption, unless the principal purpose of the transactions is to S corporation are taken into account in Schedule A, Part I, line 5,
avoid the tax on the change in status. in figuring UBTI and not reported on another line of Schedule A
In the transactions described above, the taxable event is (Form 990-T) that otherwise would apply, except capital gains
deferred for property that the tax-exempt entity immediately uses and losses, which are reported on Schedule A, Part I, line 4.
in an unrelated business. If the tax-exempt parent later disposes Report on Schedule A, Part I, line 4, any gain or loss on the
of the property, then any gain (not in excess of the amount not disposition of S corporation stock.
recognized) is included in the parent’s UBTI. If there is partial Qualified tax-exempts. A qualified tax-exempt is an
use of the assets in unrelated business, then there is partial organization that is described in section 401(a) (qualified stock
recognition of gain or loss with respect to the assets not so used. bonus, pension, and profit-sharing plans) or 501(c)(3) and
Property is treated as disposed if the tax-exempt entity no longer exempt from tax under section 501(a).
uses it in an unrelated business.
Exception. Employee stock ownership plans (ESOPs) don't
Losses on the transfer of assets to a tax-exempt entity are follow these S corporation rules if the S corporation stock is an
disallowed if part of a plan having a principal purpose of employer security, as defined in section 409(l).
recognizing losses.
Attach a statement to this return showing the qualified
Net Gain or (Loss) tax-exempt's share of all items of income, loss, or deduction.
Combine the income, loss, and deductions (except for the capital
Line 4b. Show gains and losses on other than capital assets on gains and losses) on the statement. If you hold stock in more
Form 4797. Enter on this line the net gain or (loss) from Form than one S corporation, total the combined amounts. Show
4797, Part II, line 17. capital gains and losses separately and include them on
An exempt organization using Form 4797 to report ordinary Schedule A, Part I, line 4a.
gain on sections 1245, 1250, 1252, 1254, and 1255 property will
include only depreciation, amortization, or depletion allowed or Rent Income
allowable in figuring UBTI or taxable income of the organization Line 6. Enter the amount computed on Part IV, line 3, on Part I,
(or a predecessor organization) for a period when it was not line 6, column (A). Enter the amount computed on Part IV, line 5,
exempt. on Part I, line 6, column (B).

Capital Loss Deduction for Trusts Unrelated Debt-Financed Income
Line 4c. If a trust has a net capital loss, it is subject to the Line 7. Enter the amount computed on Part V, line 8, on Part I,
limitations of Schedule D (Form 1041). Enter on this line the loss line 7, column (A). Enter the amount computed on Part V, line 10,
figured on Schedule D (Form 1041). on Part I, line 7, column (B).

Income or (Loss) From a Partnership or an S Interest, Annuities, Royalties, and Rents From a
Corporation Controlled Organization
Line 5. See Regulations section 1.512(a)-6 for rules permitting Line 8. Enter the sum of columns 5 and 10 from Part VI on Part
the aggregation of income (and directly connected deductions) I, line 8, column (A). Enter the sum of columns 6 and 11 from
of certain partnership interests. 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 Investment Income of a Section 501(c)(7), (9), or
corporation) under section 469 (the PAL and credit limitation
rules) and section 465 (at-risk limitations). For more information (17) Organization
on these rules, see the discussion of the application of the Line 9. Enter the sum of amounts from Part VII, column 2, on
passive activity loss and at-risk limitations to affected tax-exempt Part I, line 9, column (A). Enter the sum of amounts in Part VII,
organizations in the introductory instructions under Part I. column 5, on Part I, line 9, column (B).
Unrelated Trade or Business Income, earlier.
Exploited Exempt Activity Income, Other Than
Partnerships Advertising Income
If the organization is a partner in a partnership conducting an
unrelated trade or business, enter the organization's share Line 10. Enter the amount computed on Part VIII, line 2, on Part
(whether or not distributed) of the partnership's income or loss I, line 10, column (A). Enter the amount computed on Part VIII,
from the unrelated trade or business. The organization is line 3, on Part I, line 10, column (B).
required to notify the partnership of its tax-exempt status. Figure
the gross income and deductions of the partnership in the same Advertising Income
way you figure unrelated trade or business income the Line 11. Enter the amount computed on Part IX, line 2, on Part I,
organization earns directly. line 11, column (A). Enter the amount computed on Part IX,
Attach a statement to this return showing the organization's line 3, on Part I, line 11, column (B).
share of the partnership's gross income from the unrelated trade

18 Instructions for Form 990-T

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Other Income organization may have current income under section 1293 if the
PFIC is a QEF with respect to the organization. The organization
Line 12. Enter on Part I, line 12, any item of unrelated business may also have current income under section 1296 if it makes a
income from a particular trade or business that isn't reportable section 1296 mark-to-market election with respect to the PFIC
elsewhere on the return. Attach a statement describing the stock.
sources of the other income and their amounts. Such amounts
may include: Include on Schedule A, Part I, line 12, the portion of an
• Recoveries of bad debts deducted in earlier years under the excess distribution (or gain treated as an excess distribution),
specific charge-off method; section 1293 inclusion, or section 1296 inclusion that is taxable
• The amount from Form 6478, Biofuel Producer Credit (if as UBTI. See Form 8621.
applicable); See the instructions for Form 990-T, Part II, line 4, for
• The amount from Form 8864, Biodiesel, Renewable Diesel, or reporting the deferred tax amount that may be owed by the
Sustainable Aviation Fuels Credit (if applicable); and organization with respect to an excess distribution (or gain
• Proceeds received from employer-owned life insurance treated as an excess distribution).
contracts issued after August 17, 2006 (complete and attach
Form 8925); and Line 13. Total Unrelated Trade or Business
• The amount of payroll tax credit taken by an employer on its Income
2023 employment tax returns (Forms 941, 943, and 944) for Use the amount from Schedule A, Part I, line 13, column (C), in
qualified paid sick and qualified paid family leave under the the computation of UBTI in Part II.
FFCRA and the ARP (both the nonrefundable and refundable
portions). These amounts must be included in gross income for Part II. Deductions Not Taken
the tax year that includes the last day of the calendar quarter
with respect to which the credit is allowed. Elsewhere
If the aggregate sum of the amounts on all Schedules A (Form
Note. A credit is available only if the leave was taken sometime 990-T), Part I, line 13, column (A), is $10,000 or less, you don't
after March 31, 2020 and before October 1, 2021, and only after have to complete Schedule A, Part II, lines 1 through 14.
the qualified leave wages were paid, which might, under certain However, you must complete the remainder of Schedule A, Part
circumstances, not occur until a quarter after September 30, II and include the larger of each total from Schedule A, Part II,
2021, including quarters during 2023. line 18, or zero, in the computation of the amount reported on
Organizations described in section 501(c)(19). Enter the Part I, line 1, of Form 990-T.
net income from an insurance business that was not properly set
aside. These organizations may set aside income from Note. Only expenses directly connected with the unrelated
payments received for life, sickness, accident, or health trade or business income reported on the Schedule A for that
insurance for members of the organization or their dependents. particular unrelated trade or business may be deducted on that
Schedule A (see Directly connected expenses in Appendix A).
1. To provide for the payment of insurance benefits. Don't separately include in Schedule A, Part II, any expenses
2. For a purpose specified in section 170(c)(4) (religious, that are reported in Schedule A, Parts III through IX, other than
charitable, scientific, literary, educational, etc.). excess exempt expenses entered on Schedule A, Part II, line 12,
3. For administrative costs directly connected with benefits and excess readership costs entered on Schedule A, Part II,
described in (1) and (2) above. line 13. For example, officers' compensation allocable to
advertising income is reported on Schedule A, Part IX, only and
Amounts set aside and used for purposes other than those in shouldn’t be included on Schedule A, Part X, or Schedule A, Part
(1), (2), or (3) above must be included in UBTI for the tax year if II, line 1.
they were previously excluded from taxable income.
Any amount spent for a purpose described in section 170(c) Limitations on Deductions
(4) is first considered paid from funds earned by the organization The following items discuss certain areas in which the deduction
from insurance activities if the income isn't used for the may be limited.
insurance activities.
Expenditures for lobbying aren't considered section 170(c)(4) Activities Lacking a Profit Motive
expenses.
Income from property financed with qualified 501(c)(3) In some instances, it is necessary to report income whether or
bonds. If any part of the property is used in a trade or business not it comes from a trade or business (including interest,
of any person other than a section 501(c)(3) organization or a annuities, royalties, and rents from controlled organizations, and
governmental unit, and such use isn't consistent with the income of a section 501(c)(7), (9), or (17) organization other than
requirement for qualified 501(c)(3) bonds under section 145, the exempt function income). If income is attributable to an activity
section 501(c)(3) organization is considered to have received lacking a profit motive, then a net loss from the activity can’t be
unrelated business income in the amount of the greater of the claimed on Form 990-T. Therefore, in Part I, column (B), and Part
actual rental income or the fair rental value of the property for the II, the total of deductions for expenses directly connected with
period it is used. No deduction is allowed for interest on the income from an activity lacking a profit motive is limited to the
private activity bond. Report the greater of the actual rent or the amount of that income. Generally, an activity lacking a profit
fair rental value on Schedule A, Part I, line 12. Report allowable motive is one that isn't conducted for the purpose of producing a
deductions on Schedule A, Part II. See sections 150(b)(3) and profit or one that has consistently produced losses when both
(c). direct and indirect expenses are taken into account.
PFIC shareholders. If the organization is a direct or indirect
shareholder of a PFIC within the meaning of section 1297, it may Deductions Related to Property Leased to
have income tax consequences under section 1291 upon the Tax-Exempt Entities
disposition of the PFIC stock or on the receipt of an excess
distribution from the PFIC, described in section 1291(a). The For property leased to a governmental or other tax-exempt entity,
or in the case of property acquired after March 12, 2004, that is
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treated as tax-exempt-use property other than by reason of a Exceptions. Section 263A doesn’t apply to:
lease, the organization may not claim deductions related to the • Personal property acquired for resale if the organization's
property when they exceed the organization's income from the average annual gross receipts for the 3 prior tax years were $10
lease payments. Amounts disallowed may be carried over to the million or less;
next year and treated as a deduction concerning the property. • Timber;
See section 470. • Most property produced under long-term contract;
• Certain property produced in a farming business;
Transactions Between Related Taxpayers • Research and experimental costs under section 174;
• Geological and geophysical costs amortized under section
Generally, an accrual basis taxpayer may deduct business 167(h);
expenses and interest owed to a related party only in the year • Intangible drilling costs for oil, gas, and geothermal property;
the payment is included in the income of the related party. See • Mining exploration and development costs; and
sections 163(e)(3) and 267 for limitations on deductions for • Inventory of an organization that accounts for inventories in
unpaid interest and expenses. the same manner as materials and supplies that aren't
incidental. See Schedule A, Part III, Cost of Goods Sold, later.
Preference Items See Regulations sections 1.263A-1 through 1.263A-3.

Corporations may be required to adjust deductions for depletion Travel, Meals, and Entertainment
of iron ore and coal, intangible drilling and exploration and Subject to the limitations and restrictions discussed below, an
development costs, and the amortizable basis of pollution control organization can deduct ordinary and necessary travel, meals,
facilities. See section 291 to determine the amount of the and non-entertainment expenses paid or incurred in its trade or
adjustment. 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
Section 263A Uniform Capitalization Rules qualified transportation fringe benefits. Special rules apply to
deductions for gifts, luxury water travel, and convention
These rules require organizations to capitalize or include as expenses. See section 274 and Pub. 463, Travel, Gift, and Car
inventory cost certain costs incurred in connection with the Expenses.
following.
• The production of real property and tangible personal property Qualified transportation fringes (QTFs). Generally, no
held in inventory or held for sale in the ordinary course of deduction is allowed under section 274(a)(4) for QTFs provided
business. by employers to their employees. QTFs are defined in section
• Real property or personal property held in inventory (tangible 132(f)(1) and include:
and intangible) acquired for resale. • Transportation in a commuter highway vehicle between the
• The production of real property and tangible personal property employee's residence and place of employment,
produced by the organization for use in its trade or business or in • Any transit pass, and
an activity engaged in for profit. • Qualified parking.
See section 274, Pub. 15-B, and Pub. 535 for details.
Tangible personal property produced by an organization
includes a film, sound recording, videotape, book, or similar Travel. The organization can’t deduct travel expenses of any
property. individual accompanying an organization's officer or employee,
including a spouse or dependent of the officer or employee,
Indirect expenses. Organizations subject to the section 263A unless:
uniform capitalization rules are required to capitalize direct costs • That individual is an employee of the organization, and
and an allocable part of most indirect costs (including taxes) that • Their travel is for a bona fide business purpose and would
benefit the assets produced or acquired for resale or are otherwise be deductible by that individual.
incurred by reason of the performance of production or resale
activities. Meals. Generally, the organization can deduct only 50% of the
amount otherwise allowable for non-entertainment-related meal
For inventory, some of the indirect expenses that must be expenses paid or incurred in an unrelated trade or business.
capitalized are: Meals not separately stated from entertainment are generally not
• Administration expenses; deductible. In addition (subject to exceptions under section
• Taxes; 274(k)(2)):
• Depreciation; Meals mustn’t be lavish or extravagant, and
• Insurance; •
• Compensation paid to officers attributable to services; • An employee of the organization must be present at the meal.
• Rework labor; and Membership dues. The organization can deduct amounts paid
• Contributions to pension, stock bonus, and certain or incurred for membership dues in civic or public service
profit-sharing, annuity, or deferred compensation plans. organizations, professional organizations (such as bar and
Regulations section 1.263A-1(e)(3) specifies other indirect medical associations), business leagues, trade associations,
costs that relate to production or resale activities that must be chambers of commerce, boards of trade, and real estate boards.
capitalized and those that may be currently deductible. However, no deduction is allowed if a principal purpose of the
organization is to entertain or provide entertainment facilities for
Interest expense. Interest expense paid or incurred during the members or their guests. In addition, organizations can’t deduct
production period of designated property must be capitalized membership dues in any club organized for business, pleasure,
and is governed by special rules. See Regulations section recreation, or other social purpose. This includes country clubs,
1.263A-8 through 1.263A-15. golf and athletic clubs, airline and hotel clubs, and clubs
When are section 263A capitalized costs deductible? The operated to provide meals under conditions favorable to
costs required to be capitalized under section 263A aren't business discussion.
deductible until the property (to which the costs relate) is sold,
used, or otherwise disposed of by the organization.

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Entertainment facilities. The organization can’t deduct an that don't add to the value or appreciably prolong the life of the
expense paid or incurred for use of a facility (such as a yacht or property.
hunting lodge) for an activity usually considered entertainment,
amusement, or recreation. Bad Debts
Amounts treated as compensation. The organization may Line 4. Enter the total receivables from an unrelated trade or
generally be able to deduct otherwise non-deductible travel, business that were previously included in taxable income and
meals, and entertainment expenses if the amounts are treated that became worthless in whole or in part during the tax year.
as compensation and reported on Form W-2 for an employee or
Form 1099-NEC for an independent contractor and if the total Interest
amount of such compensation isn't unreasonable. 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
If the organization claims certain credits, it may need to reduce investment and to acquire an interest in a passive activity), an
the otherwise allowable deductions for expenses used to figure interest allocation must be made. See Temporary Regulations
the credit. This applies to credits such as the following. section 1.163-8T for the interest allocation rules.
• Disabled access credit.
• Employer credit for social security and Medicare taxes paid on Tax-exempt interest. Don't include interest on indebtedness
certain employee tips. incurred or continued to purchase or carry obligations on which
• Credit for employer-provided childcare facilities and services. the interest income is totally exempt from income tax. For
• Orphan drug credit. exceptions, see section 265(b).
• Credit for small employer pension plan startup costs. Prepaid interest. Generally, a cash basis taxpayer can’t deduct
• Employer credit for paid family and medical leave. prepaid interest allocable to years following the current tax year,
If the organization has any of these credits, figure each for example, during the tax year a cash basis taxpayer prepaid
current-year credit before figuring the deduction for expenses on interest on a loan. The taxpayer can deduct only that part of the
which the credit is based. 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
Business Startup and Organizational Costs subsequent years.
For business startup and organizational costs paid or incurred Straddle interest. Generally, the interest and carrying charges
after September 8, 2008, an organization can deduct up to on straddles can’t be deducted and must be capitalized. See
$5,000 of such costs in the year it begins business (unless the section 263(g).
organization elects to capitalize the full amount of such costs). Original issue discount. See section 163(e)(5) for special
The $5,000 deduction is reduced (but not below zero) by the rules for the disqualified portion of original issue discount on a
amount the total costs exceed $50,000. If the total costs are high-yield discount obligation.
$55,000 or more, the deduction is reduced to zero. Any costs not
deducted must be amortized, as explained below. Interest on certain underpayments of tax. Don't deduct
interest paid or incurred on any portion of an underpayment of
Note. For startup and organizational costs paid or incurred after tax that is attributable to an understatement arising from an
September 8, 2008, the organization isn't required to attach a undisclosed listed transaction or an undisclosed reportable
statement or specifically identify the amount deducted for the avoidance transaction (other than a listed transaction) entered
election under sections 195(b) and 248(a) to be effective. It is a into in tax years beginning after October 22, 2004.
deemed election. Whether an organization deducts a portion of Interest allocable to the production of designated property.
its startup and organizational costs under Regulations sections Don't deduct interest on debt allocable to the production of
1.195-1 and 1.248-1 or elects to amortize the full amount of such designated property. Interest that is allocable to such property
costs, its election is irrevocable. For startup and organizational produced by an organization for its own use or for sale must be
costs paid or incurred after October 22, 2004, and before capitalized. An organization must also capitalize any interest on
September 9, 2008, an organization must generally attach the debt allocable to an asset used to produce the earlier property.
statement required by Regulations sections 1.195-1(b) and See section 263A(f) and Regulations sections 1.263A-8 through
1.248-1(c) to make the election to deduct a portion of such costs 1.263A-15.
(as explained above). This election is irrevocable. However, an
organization can apply the provisions of these regulations to Interest on below-market loans. See section 7872 for special
costs paid or incurred after October 22, 2004. 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 Limitation on deduction of business interest. Business
with the month the organization begins business. See the interest expense is limited to the sum of business interest
Instructions for Form 4562, Depreciation and Amortization, for income, 30% of the adjusted taxable income, and floor plan
details. If the association elected to amortize business startup financing interest. Business interest expense includes any
and organizational costs paid or incurred before October 23, interest paid or accrued on indebtedness properly allocable to
2004, over a period of 60 months or more, it must continue to an unrelated trade or business. A taxpayer, other than a tax
amortize those costs over the elected amortization period. shelter, that meets the gross receipts test isn’t required to limit
Report the deductible amount of these costs and any business interest expense under section 163(j). A taxpayer
amortization on Schedule A, Part II, line 14. For amortization that meets the gross receipts test if the taxpayer has average annual
began during the tax year, complete and attach Form 4562. gross receipts that are taken into account in determining its UBTI
of $29 million or less for the 3 prior tax years. Gross receipts
Repairs and Maintenance include the aggregate gross receipts from all persons treated as
a single employer such as a controlled group of corporations,
Line 3. Enter the cost of incidental repairs and maintenance not commonly controlled partnerships or proprietorships, and
claimed elsewhere on the return, such as labor and supplies,
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affiliated service groups. If the taxpayer fails to meet the gross Other Deductions
receipts test, Form 8990 is generally required.
Line 14. Enter on this line the deduction taken for amortization
Taxes and Licenses (see Form 4562) as well as other authorized deductions for
which no space is provided on the return. Attach a statement
Line 6. Enter taxes and license fees paid or accrued during the listing the deductions claimed on this line. On each Schedule A,
year, but don't include the following taxes. deduct only items directly connected with the unrelated trade or
• Federal income taxes. business for which income is reported on that Schedule A.
• Foreign or U.S. territory income taxes if a foreign tax credit is
claimed. Extraterritorial income exclusion. Complete Form 8873 and
• Taxes not imposed on your organization. include the deduction from line 52 in other deductions reported
• Taxes, including state or local sales taxes, paid or incurred in on Part II, line 14.
connection with an acquisition or disposition of property. These Don't deduct fines or penalties paid to a government for
taxes must be treated as part of the cost of the acquired property violating any law. The exclusion was repealed generally for
or, in the case of a disposition, as a reduction in the amount transactions after 2004, with some exceptions. See Form 8873
realized on the disposition. and its instructions.
• Taxes assessed against local benefits that increase the value
of the property assessed (such as for paving, etc.). Net Operating Loss (NOL) Deduction Arising in
• Taxes deducted elsewhere on the return, such as those Tax Years Beginning On or After January 1, 2018
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
Do not reduce the corporation’s deduction for social carrybacks that can be deducted in the tax year with regard to
each separate trade or business. To be deductible, an NOL must
! security and Medicare taxes by the amount claimed on have been incurred in an unrelated trade or business activity.
CAUTION its employment tax and refundable portions of the
FFCRA and ARP credits for qualified sick and family leave See section 172(a).
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
Depreciation years ending after 2017 to eliminate NOL carrybacks except for
certain farming losses and NOLs of insurance companies other
Line 7. Besides depreciation, include on line 7 the part of the than life insurance companies. See section 172(b), as amended
cost, under section 179, that the organization elected to expense by the Tax Cuts and Jobs Act. Also see Pub. 225, Farmer’s Tax
for certain tangible property placed in service during the tax year Guide; Pub. 536, Net Operating Losses for Individuals, Estates,
or carried over from the prior tax year. See Form 4562 and its and Trusts; and Pub. 542, Corporations, for additional
instructions. information. The Tax Cuts and Jobs Act also amended section
172(a)(2) to limit the allowable NOL deduction to 80% of taxable
Depletion income (calculated as described in section 172(a)(2)).
Line 9. See sections 613 and 613A for percentage depletion Instructions for line 17. Enter on Schedule A, Part II, line 17,
rates for natural deposits. Attach Form T (Timber), Forest the NOL carryover from other tax years attributable to that trade
Activities Schedules, if a deduction is taken for depletion of or business, but don't enter more than the amount shown on
timber. Schedule A, Part II, line 16. An organization that claims the
deduction with respect to any NOL carried through tax years for
Contributions to Deferred Compensation Plans which the organization was not required to file Form 990-T must
show the amount of the deduction and how it was computed, but
Line 10. Employers who maintain pension, profit-sharing, or
the organization need not file a Form 990-T in order to preserve
other funded deferred compensation plans are generally
an NOL carryover. See Regulations section 1.512(a)-6(h)(3) for
required to file Form 5500. This requirement applies whether or
treatment of suspended NOLs resulting from the termination,
not the plan is qualified under the Code and whether or not a
sale, exchange, or other disposition of a separate unrelated
deduction is claimed for the current tax year. Section 6652(e)
trade or business. After offsetting any gain resulting from the
imposes a penalty for late filing of these forms. In addition, there
termination, sale, exchange, or disposition of a separate
is a penalty for overstating the pension plan deduction. See
unrelated trade or business, any NOL remaining is suspended.
section 6662(f).
However, the suspended NOLs may be used if that previous
separate unrelated trade or business is later resumed or if a new
Employee Benefit Programs unrelated trade or business that is accurately identified using the
Line 11. Enter the amount of contributions to employee benefit same NAICS 2-digit code as the previous separate unrelated
programs (such as insurance, health, and welfare programs) that trade or business is commenced or acquired in a future tax year.
aren't an incidental part of a deferred compensation plan The amount of an NOL carryover is determined under section
included on Schedule A, Part II, line 10. 172. See Regulations section 1.512(b)-1(e) and, for
organizations with more than one unrelated trade or business,
Excess Exempt Expenses Regulations section 1.512(a)-6(h). Attach a statement showing
Line 12. Enter the amount computed on Part VIII, line 7 (if the computation of the NOL deduction.
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
Line 13. Enter the amount computed on Part IX, line 8a (if zero in the computation of UBTI on Part I, line 1, of Form 990-T.
applicable), on Part II, line 13. 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

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loss on a Schedule A should be treated as zero to calculate the less than scrap value). Bona fide selling price means actual
amount reported on Part I, line 1, of Form 990-T offering of goods during a period ending not later than 30 days
after inventory date.
Part III. Cost of Goods Sold If this is the first year the Last-in First-out (LIFO) inventory
Generally, inventories are required at the beginning and end of method was either adopted or extended to inventory goods not
each tax year if the production, purchase, or sale of merchandise previously valued under the LIFO method provided in section
is an income-producing factor. See Regulations section 1.471-1. 472, attach Form 970, Application To Use LIFO Inventory
Method, or a statement with the information required by Form
However, if the organization is a qualifying taxpayer or a
970.
qualifying small business taxpayer, it may adopt or change its
accounting method to account for inventoriable items in the If the organization changed or extended its inventory method
same manner as materials and supplies that aren't incidental to LIFO and had to write up the opening inventory to cost in the
(unless its business is a tax shelter (as defined in section 448(d) year of election, report the effect of this write-up as other income
(3)). (Part I, line 12) proportionately over a 3-year period that begins
in the tax year the LIFO election was made (section 472(d)).
A qualifying taxpayer is a taxpayer that, for each prior tax year
ending after December 16, 1998, has average annual gross Line 1. If the organization is changing its method of accounting
receipts of $1 million or less for the 3-tax-year period ending with to no longer account for inventories, it must refigure last year's
that prior tax year. closing inventory using the new method of accounting and enter
the result on line 1. If there is a difference between last year's
A qualifying small business taxpayer is a taxpayer (a) that has closing inventory and the refigured amount, attach an
average annual gross receipts of $29 million or less for the explanation and take it into account when figuring the
3-tax-year period ending with that prior tax year, and (b) whose organization's section 481(a) adjustment (explained earlier).
principal business activity isn't an ineligible activity.
Line 4. An entry is required on this line only for organizations
Under this accounting method, inventory cost for raw that have elected a simplified method of accounting.
materials purchased for use in producing finished goods and For organizations that have elected the simplified production
merchandise purchased for resale are deductible in the year the method, additional section 263A costs are generally those costs,
finished goods or merchandise are sold (but not before the year other than interest, that are now required to be capitalized under
the organization paid for the raw materials or merchandise, if it is section 263A but that weren’t capitalized under the
also using the cash method). For additional guidance on this organization's method of accounting immediately prior to the
method of accounting for inventoriable items, see Pub. 538 and effective date of section 263A. For details, see Regulations
the Instructions for Form 3115. section 1.263A-2(b).
Enter amounts paid for all raw materials and merchandise For organizations that have elected the simplified resale
during the tax year on line 2. The amount the organization can method, additional section 263A costs are generally those costs
deduct for the tax year is figured on Schedule A, Part III, line 8. incurred with respect to the following categories.
• Off-site storage or warehousing.
All filers not using the cash method of accounting should see • Purchasing.
Section 263A Uniform Capitalization Rules under Limitations on • Handling, such as processing, assembling, repackaging, and
Deductions, earlier, before completing Schedule A. The transporting.
instructions for lines 1, 4, 5, and 7, later, apply to Part III earlier, • General and administrative costs (mixed service costs).
before completing Schedule A. 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
2. Lower of cost or market, as described in Regulations Schedule A, Part III, lines 2 and 3.
section 1.471-4, or Line 5. Enter on Schedule A, Part III, line 5, any costs paid or
3. Any other method approved by the IRS that conforms to incurred during the tax year not entered on Schedule A, Part III,
the requirements of the applicable regulations cited below. lines 2 through 4. Attach a statement describing the other costs.
However, if the organization is using the cash method of Line 7. See Regulations sections 1.263A-1 through 1.263A-3
accounting, it is required to use cost. for details on figuring the amount of additional section 263A
costs to be included in ending inventory.
A small producer is an organization whose average annual
gross receipts are $1 million or less. Small producers that If the organization accounts for inventories in the same
account for inventories in the same manner as materials and manner as materials and supplies that aren't incidental, enter on
supplies that aren't incidental may currently deduct expenditures Schedule A, Part III, line 7, the portion of its raw materials and
for direct labor and all indirect costs that would otherwise be merchandise purchased for resale that are included on
included in inventory costs. Schedule A, Part III, line 6, and weren’t sold during the year.

The average cost (rolling average) method of valuing Part IV. Rent Income
inventories generally doesn’t conform to the requirement of the
regulations. See Rev. Rul. 71-234, 1971-1 C.B. 148. Section 501(c)(7), (9), and (17) organizations, enter gross rents
on Schedule A, Part I, line 6, and applicable expenses on
Organizations that use erroneous valuation methods must Schedule A, Part II, lines 1 through 14. All rents except those that
change to a method permitted for federal income tax purposes. are exempt function income must be included.
File Form 3115 to make this change.
Inventory may be valued below cost when the merchandise is All organizations that have applicable rent income, other than
unsalable at normal prices or unusable in the normal way section 501(c)(7), (9), and (17) organizations, should complete
because the goods are subnormal because of damage, Schedule A, Part IV. For organizations other than section 501(c)
imperfections, shop wear, etc., within the meaning of (7), (9), and (17) organizations, only the following rents are
Regulations section 1.471-2(c). The goods may be valued at the taxable on Schedule A, Part I, line 6.
bona fide selling price, minus direct cost of disposition (but not
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1. Rents from personal property leased with real property, if For section 514 purposes, don't treat an interest in a
the rents from the personal property are more than 10% of the ! qualified state tuition program (QSTP) as debt. However,
total rents received or accrued under the lease, determined at CAUTION a QSTP's investment income is treated as debt-financed
the time the personal property is placed in service. income if the QSTP incurs indebtedness when acquiring or
2. Rents from real and personal property if: improving income-producing property.

a. More than 50% of the total rents received or accrued A property held to produce income is debt-financed property
under the lease are for personal property, or if, at any time during the tax year, there was acquisition
b. The amount of the rent depends on the income or profits indebtedness outstanding for the property. When a property held
derived by any person from the property leased (except an for the production of income by an organization is disposed of at
amount based on a fixed percentage of receipts or sales). a gain during the tax year, and there was acquisition
A redetermination of the percentage of rent for personal indebtedness outstanding for that property at any time during the
property is required when either: 12-month period before the date of disposition, the property is
debt-financed property. Securities purchased on margin are
1. There is an increase of 100% or more by the placing of considered debt-financed property if the liability incurred in
additional or substitute personal property in service, or purchasing them remains outstanding.
2. There is a modification of the lease that changes the rent
charged. Rents from both real and personal property not taxable Acquisition indebtedness is the outstanding amount of
on Schedule A, Part I, line 6, may be taxable on Schedule A, Part principal debt incurred by the organization to acquire or improve
I, line 8, if the income is from a controlled organization or on the property. Acquisition indebtedness also includes
Schedule A, Part I, line 7, if the property is debt-financed. indebtedness incurred:
Taxability of the rent must be considered in the following order. 1. Before the property was acquired or improved, if the
a. Rents not taxed on Schedule A, Part I, line 6, may be indebtedness would not have been incurred but for such
taxed on Schedule A, Part I, line 8. acquisition or improvement of the property; or
b. Rents not taxed on Schedule A, Part I, line 6 or line 8, may 2. After the property was acquired or improved, if the
be taxed on Schedule A, Part I, line 7. indebtedness would not have been incurred but for such
acquisition or improvement and the incurrence of such
Rents from personal property not leased with real property indebtedness was reasonably foreseeable at the time of such
should be reported on Schedule A, Part I, line 12. acquisition or improvement. See Regulations section
1.514(c)-1(a).
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 1. A qualified (section 401) trust in acquiring or improving
Line 1. Check the box next to the property description if the real property. See section 514(c)(9).
property is used both to carry on exempt activities and to 2. A tax-exempt school (section 170(b)(1)(A)(ii)) and its
conduct unrelated trade or business activities. affiliated support organizations (section 509(a)(3)) for
indebtedness incurred after July 18, 1984.
Line 4. For each property, attach a statement describing the
directly connected deductions and their amounts. 3. An organization described in section 501(c)(25) in tax
years beginning after December 31, 1986.
Part V. Unrelated Debt-Financed 4. An obligation, to the extent that it is insured by the Federal
Housing Administration, to finance the purchase, rehabilitation,
Income or construction of housing for low and moderate income
Use Schedule A, Part V, to compute unrelated debt-financed persons, or indebtedness incurred by a small business
income described in sections 512(b)(4) and 514 from investment company licensed after October 22, 2004, under the
debt-financed property only to the extent that the income doesn’t Small Business Investment Act of 1958 if such indebtedness is
constitute income from the conduct of an unrelated trade or evidenced by a debenture issued by such company under
business and isn't specifically taxable under other provisions of section 303(a) of that Act, and held or guaranteed by the Small
the Code, such as taxable rents from personal property leased Business Administration (see section 514(c)(6)(B) for
with real property reportable on Schedule A, Part IV (and limitations).
Schedule A, Part I, line 6), or taxable interest, annuities,
royalties, and rents from a controlled entity reportable on 5. A retirement income account described in section 403(b)
Schedule A, Part VI (and Schedule A, Part I, line 8). See (9) in acquiring or improving real property in tax years beginning
Regulations section 1.514(b)-1(b)(2). Refer to Regulations on or after August 17, 2006.
section 1.512(a)-6 when reporting income from one or more See Pub. 598 for additional exceptions to the rules for
debt-financed properties and also for rules permitting the debt-financed property.
aggregation of unrelated debt-financed income with other UBTI Example 1. An exempt organization owns a four-story
in certain circumstances. Gain or loss from the sale or building. Two floors are used for an exempt purpose and two
disposition of debt-financed property is reported on Schedule A, floors are rented (as an unrelated trade or business) for $10,000.
Part I, line 4. Expenses are $1,000 for depreciation and $5,000 for other
Section 501(c)(7), (9), and (17) organizations should report expenses that relate to the entire building. The average
income from debt-financed property on Schedule A, Part VII acquisition indebtedness is $6,000, and the average adjusted
(and Schedule A, Part I, line 9). basis is $10,000. Both apply to the entire building.
Example 2. Assume the same facts as in Example 1, except
When a debt-financed property is held for exempt purposes the entire building is rented out as an unrelated trade or business
and other purposes, the organization must allocate the basis, for $20,000. To complete Schedule A, Part V, for this example,
debt, income, and deductions among the purposes for which the enter $20,000 on Schedule A, Part V, line 2; $1,000 and $5,000
property is held. Don't include on Schedule A, Part V, amounts on Schedule A, Part V, lines 3(a) and 3(b), respectively (since
allocated to exempt purposes. the entire amount is for debt-financed property); $6,000 and

24 Instructions for Form 990-T

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$10,000 on Schedule A, Part V, lines 4 and 5 (since the entire Line 6. Divide each property's average acquisition
amount is for debt-financed property); 60% on Schedule A, Part indebtedness for the tax year by that property's average adjusted
V, line 6; $12,000 on Schedule A, Part V, line 7; and $3,600 on basis during the period it is held in the tax year. This percentage
Schedule A, Part V, line 9. cannot be more than 100%.
Line 1. Enter the address of the debt-financed property. If the Line 7. The amount of income from debt-financed property
debt-financed property isn’t real property, enter the address included in unrelated trade or business income is figured by
where the property is located and describe the property in Part multiplying the property's gross income by the percentage
XI, Supplemental Information. computed on line 6.
Check the box next to the property description if the property
Line 8 . Enter on line 8 the sum of amounts computed for each
is used both to carry on exempt activities and to conduct
property on line 7. Also enter this amount on Part I, line 7,
unrelated trade or business activities.
column (A).
Line 2. Enter the gross income from debt financed property,
Line 9. For each debt-financed property, multiply the total
excluding income otherwise included in UBTI. For example, don't
deductions directly connected to the income (including the
include rents from personal property shown on Schedule A, Part
dividends-received deductions allowed by sections 243, 244,
IV, or rents and interest from controlled organizations shown on
and 245) by the percentage computed on line 6. However, if the
Schedule A, Part VI.
debt-financed property is depreciable property, figure the
Line 3. For amounts shown on line 3a, attach a statement depreciation deduction by the straight line method only and enter
showing, for each property: the amount on Schedule A, Part V, line 3a.
1. The cost or salvage value, For each debt-financed property, attach statements showing
2. The year acquired, separately a computation of the depreciation deduction (if any)
reported on Schedule A, Part V, line 3a, (as described earlier)
3. The property’s useful life (rounded to a whole number if and a breakdown of the expenses included on Schedule A, Part
necessary), V, line 3b. Corporations owning stock that is unrelated
4. The years remaining (rounded to a whole number if debt-financed property should see Schedule C (Dividends and
necessary), Special Deductions) of Form 1120, U.S. Corporation Income Tax
5. The annual depreciation expense amount, and Return, to determine the dividends-received deductions to
6. The allowable depreciation expense amount. include on Schedule A, Part V, line 3b.
When a capital loss for the tax year may be carried back or
Line 4. Average acquisition indebtedness for any tax year is the carried over to another tax year, the amount to carry over or back
average amount of the outstanding principal debt during the part is figured by using the percentage determined above. However,
of the tax year the property is held by the organization. To figure in the year to which the amounts are carried, don't apply the
the average amount of acquisition debt, determine the amount of debt-basis percentage to determine the deduction for that year.
the outstanding principal debt on the first day of each calendar Line 10. On line 10, enter the sum of amounts computed for
month during that part of the tax year that the organization holds each property on line 9. Also enter this amount on Part I, line 7,
the property. Add these amounts together, and divide the result column (B).
by the total number of months during the tax year that the
organization held the property. See section 514(a) and the Line 11. Enter the total dividends-received deductions (after
related regulations for property acquired for an indeterminate reduction, when applicable, by the debt-basis percentage(s))
price. included on Schedule A, Part V, line 9.
1. The average amount of acquisition debt,
Part VI. Interest, Annuities, Royalties,
2. The percent allocable to debt-financed income, and
3. The product of (1) multiplied by (2). 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 Under section 512(b)(13), interest, annuities, royalties, and rents
and last days during the tax year that the organization holds the received or accrued (directly or indirectly) by a controlling
property. Determine the adjusted basis of property under section organization from a controlled organization are subject to tax,
1011. Adjust the basis of the property by the depreciation for all whether or not the activity conducted by the controlling
earlier tax years, whether or not the organization was exempt organization to earn these amounts is a trade or business or is
from tax for any of these years. Similarly, for tax years during regularly conducted. However, see Regulations section
which the organization is subject to tax on UBTI, adjust the basis 1.512(b)-1(l)(5) regarding amounts taxable under other
of the property by the entire amount of allowable depreciation, provisions of the Code.
even though only a part of the deduction for depreciation is taken Controlled organization. An entity is a “controlled
into account in figuring UBTI. organization” if the controlling organization owns:
Attach a statement showing, for each property: • By vote or value, more than 50% of a corporation's stock (for
1. A brief description of the property, an organization that is a corporation);
• More than 50% of a partnership's profits or capital interests
2. The adjusted basis, (for an organization that is a partnership); or
3. The percent allocable to debt-financed income, and • More than 50% of the beneficial interests in an organization
4. The product of (3) multiplied by (4). (for an organization other than a corporation or partnership).
To determine the ownership of stock in a corporation, apply
If no adjustments to the basis of property under section 1011 the principles of section 318 (constructive ownership of stock).
apply, the basis of the property is cost. Apply similar principles to determine the ownership of interests
See section 514(d) and the related regulations for the basis of in a partnership or any other organization.
debt-financed property acquired in a complete or partial
liquidation of a corporation in exchange for its stock.

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Column 3.  Enter the net unrelated income (or net unrelated          organization and buys other property used for the organization's 
loss) of each controlled entity listed that is exempt from tax under exempt function within a period beginning 1 year before the date 
section 501(a).                                                      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 
Column 7. Enter the taxable income of each nonexempt                 price of the old property is more than the cost of the other 
controlled organization.                                             property. The other property need not be similar in type or use to 
Column 8.  Enter the net unrelated income (or net unrelated          the old property. The organization must notify the IRS of the sale 
loss) of each controlled entity listed that isn't exempt from tax    by a statement attached to the return, or other written notice.
under section 501(a). Net unrelated income is that portion of the    To compute the gain on the sale of depreciable property, see 
controlled entity's taxable income that would be UBTI if the entity  the instructions for Part V, line 5, to determine the adjusted basis 
were exempt under section 501(a) and had the same exempt             of the property.
purposes as the controlling organization. Net unrelated loss is 
the controlled organization's NOL adjusted under rules similar to    Column 3.  Deduct only those expenses that are directly 
those used to determine net unrelated income.                        connected to the net investment income. Allocate deductions 
                                                                     between exempt activities and other activities where necessary. 
Column 4 or 9.    For each controlled organization, enter the total  The organization may not take the dividends-received 
of specified payments received from each controlled                  deductions in figuring net investment income because they aren't 
organization. If the organization received both specified            treated as directly connected with the production of gross 
payments and qualifying specified payments from a controlled         income.
organization, enter specified payments on one line and 
qualifying specified payments on another so that there are dual      Column 4. Section 501(c)(7), (9), and (17) organizations may 
entries for that controlled organization.                            set aside income that would otherwise be taxable under section 
                                                                     512(a)(3). However, income derived from an unrelated trade or 
Column 5 or 10.   For specified payments, enter the portion of       business may not be set aside and thus can’t be exempt function 
column 4 or 9 to the extent that the payment reduced the net         income. In addition, any income set aside and later used for 
unrelated income (or increased the net unrelated loss) of the        other purposes must be included in income.
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 
With respect to qualifying specified payments, enter only that       purposes, or for the prevention of cruelty to children or animals 
portion of expenses directly connected to the amounts included       (and reasonable administration costs directly connected to such 
in column 5 or 10, that is, the excess of the payment over the       purposes); or
FMV amount, as determined in accordance with section 482. 
Don't enter any expenses relating to the portion of such payment     2. The payment of life, sickness, accident, or other benefits 
that isn't includible in income under this special rule.             (and reasonable administration costs directly connected to such 
                                                                     benefits) by a section 501(c)(9) or (17) organization. The amount 
        For valuation misstatements regarding qualifying             allowed as a set-aside may not exceed a limit determined using 
!       specified payments, there is a 20% addition to tax. See      section 512(a)(3)(E). See sections 512(a)(3)(E) and 419A for 
CAUTION section 512(b)(13)(E)(ii).                                   details.
Excess qualifying specified payments.     Excess qualifying          Report income set aside on Schedule A, Part VII, column 4. 
specified payments received or accrued from a controlled entity      Attach a statement listing:
(that is, the amount of qualifying specified payments in excess of   1. The amount set aside for charitable purposes;
what would have been paid or accrued if the payments had been 
determined under section 482) are included in a controlling          2. The amount set aside for reasonable administration costs 
exempt organization's UBTI.                                          directly connected with such amount;
                                                                     3. The amount set aside for payment of life, sickness, 
Part VII. Investment Income of a                                     accident, or other benefit; and
Section 501(c)(7), (9), or (17)                                      4. The amount set aside for reasonable administration costs 
                                                                     directly connected with the payment of such benefits.
Organization
                                                                     Amounts set aside aren't deductible under section 170 or any 
Generally, for section 501(c)(7), (9), or (17) organizations,        other section of the Code.
unrelated trade or business income includes all gross income 
from nonmembers with certain modifications. See section 512(a)       The organization may elect to treat income set aside by the 
(3)(A). Report on Schedule A, Part VII, all income from              date for filing the return, including any extension of time, as 
investments in securities and other similar investment income        income set aside in the tax year for which the return is filed. The 
from nonmembers, including 100% of income and directly               income set aside must have been includible in gross income for 
connected expenses from debt-financed property. Don't report         that earlier tax year.
nonmember income from debt-financed property on Schedule A,          Although set-aside income may be accumulated, any 
Part V.                                                              accumulation that is unreasonable will be evidence that the set 
                                                                     aside wasn’t for the purposes previously mentioned.
All section 501(c)(7), (9), and (17) organizations figure their 
investment income using Schedule A, Part VII. Don't include          Net investment income set aside must be specifically 
interest on state and local governmental obligations described in    earmarked as such, or placed in a separate account or fund 
section 103(a).                                                      (except for a section 501(c)(9) or (17) organization which, by the 
                                                                     terms of its governing instrument, must use its net investment 
Investment income includes all income from debt-financed             income for the payment of life, sickness, accident, or other 
property.                                                            benefits, and reasonable administration costs).
If a section 501(c)(7), (9), or (17) organization (or a title        These rules apply to a corporation described in section 
holding corporation, described earlier) sells property that was      501(c)(2) (title holding corporation) whose income is payable to 
used for the exempt function of the section 501(c)(7), (9), or (17)  an organization described in section 501(c)(7), (9), or (17) if it 

26                                                                                                  Instructions for Form 990-T

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files a consolidated return with the section 501(c)(7), (9), or (17) of advertising income over direct advertising costs, no loss is
organization. allowable. See Regulations section 1.512(a)-1(f)(2)(ii)(b).
Part VIII. Exploited Exempt Activity For allocating membership receipts to circulation income, see
Rev. Rul. 81-101, 1981 C.B. 352.
Income, Other Than Advertising Consolidated periodicals. If an organization publishes two or
Income more periodicals, it may elect to treat the gross income for all
Exempt organizations that have gross income from an unrelated (but not less than all) periodicals, and deductions directly
trade or business activity that exploits an exempt activity (other connected with those periodicals (including excess readership
than periodical advertising income reportable on Schedule A, costs) as if the periodicals were one to determine its UBTI. This
Part IX) should complete Schedule A, Part VIII. See Regulations rule only applies to periodicals published for the production of
section 1.513-1(d)(4)(iv) for a definition of exploited exempt income. A periodical is considered published for the production
activity. Report income from advertising other than in a periodical of income if gross advertising income of the periodical is at least
on Schedule A, Part VIII. 25% of the readership costs, and the periodical is an activity
engaged in for profit.
Line 1. Briefly describe the exempt activity being exploited in If periodicals are consolidated, check the box next to the
an unrelated trade or business activity. periodical name, and attach a statement showing the name of
Line 3. An exempt organization may take all deductions directly each periodical in the consolidated group. The attached
connected with the gross income from the unrelated trade or statement should include the amounts that correspond to
business activity. information for lines 2 through 4. Attach a separate statement for
the consolidated group of publications that includes the amounts
Line 4. Subtract directly connected deductions from the gross corresponding to the information for lines 5 through 8.
unrelated business income. If unrelated business income
exceeds the directly connected deduction, the exempt Part X. Compensation of Officers,
organization may take into account all deductible items
attributable to the exploited exempt activity, with the following Directors, and Trustees
limitations. Complete columns 1 through 4 for those officers, directors, and
1. Reduce the deductible items of the exempt activity by the trustees whose salaries or other compensation are allocable to
income from the activity. unrelated business gross income. Don't include in column 4
2. Limit the net amount of deductible items arrived at in item compensation that is deducted on Schedule A, Part II, lines 2
1 above for the exempt activity to the net unrelated business and 14, or any line of Schedule A, Parts III through IX.
income from the exploited exempt activity.
Part XI. Supplemental Information
3. Exclude income and expenses of the exempt activity in
Use Part XI to explain the organization’s operations, to provide
figuring a loss carryover or carryback from the unrelated trade or
information for lines that don’t have an embedded attachment to
business activity exploiting the exempt activity.
capture the information to supplement information provided on
4. Exclude deductible items of the exempt activity in figuring an embedded attachment, or to provide any other information in
unrelated trade or business income from an activity that isn't support of amounts reported on Schedule A. An organization
exploiting the same exempt activity. that associated unrelated trade or business activity with a
As a result, the net includible exploited exempt activity different NAICS or Business Activity Code in a prior year than the
income is the UBTI minus the excess of the exempt activity NAICS or Business Activity Code shown on the Schedule A for
expenses over the exempt activity income. If the income from the the current tax year can enter the explanation for the change
exempt activity exceeds the exempt activity expenses, don't add here.
that profit to the net income from the unrelated business activity.
For each entry in Part XI, include the Schedule A Part and line
Attach a separate statement showing the computation.
number, a brief description, and the amount (if any). If necessary,
Part IX. Advertising Income you may also attach a PDF document to provide supplemental
information.
An exempt organization that earned gross income from the sale
of advertising in an exempt organization periodical must Paperwork Reduction Act Notice
complete Schedule A, Part IX. The part of the advertising income
We ask for the information on these forms to carry out the
taken into account is determined as follows.
Internal Revenue laws of the United States. You are required to
1. If direct advertising costs (expenses directly connected give us the information. We need it to ensure that you are
with advertising income) are more than advertising income complying with these laws and to allow us to figure and collect
(unrelated business income), deduct that excess in figuring UBTI the right amount of tax. You are not required to provide the
from any other unrelated trade or business activity conducted by information requested on a form that is subject to the Paperwork
the organization. Reduction Act unless the form displays a valid OMB control
2. If advertising income is more than direct advertising costs, number. Books or records relating to a form or its instructions
and circulation income (exempt activity income) equals or must be retained as long as their contents may become material
exceeds readership costs (exempt activity expenses), then UBTI in the administration of any Internal Revenue law. Generally, tax
is the excess of advertising income over direct advertising costs. returns and return information are confidential, as required by
3. If advertising income is more than direct advertising costs, section 6103.
and readership costs are more than circulation income, then Estimates of Taxpayer Burden. These include forms in the
UBTI is the excess of total income (advertising income and 990 series and attachments; and Forms 1023, 1024, 1028,
circulation income) over total periodical costs (direct advertising 5578, 5884-C, 8038, 8038-B, 8038-CP, 8038-G, 8038-GC,
costs and readership costs). 8038-R, 8038-T, 8038-TC, 8328, 8718, 8282, 8453-TE, 8453-X,
4. If the readership costs are more than the circulation 8868, 8870, 8871, 8872, 8879-TE, 8886-T, and 8899 and their
income, and the net readership costs are more than the excess schedules; and all the forms tax-exempt organizations attach to
their tax returns. Time spent and out-of-pocket costs are

Instructions for Form 990-T 27

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presented separately. Time burden includes the time spent Reported time and cost burdens are national averages and
preparing to file and to file, with recordkeeping representing the do not necessarily reflect a “typical” case. Most taxpayers
largest component. Out-of-pocket costs include any expenses experience lower than average burden, with taxpayer burden
incurred by taxpayers to prepare and submit their tax returns. varying considerably by taxpayer type. For instance, the
Examples include tax return preparation and submission fees, estimated average time burden for all taxpayers filing Forms 990,
postage and photocopying costs, and tax preparation software 990-EZ, 990-PF, 990-T, and 990-N and related forms is 32.8
costs. Note that these estimates do not include burden hours, with an average cost of $921 per return. This average
associated with post-filing activities. IRS operational data includes all associated forms and schedules, across all
indicate that electronically prepared and filed returns have fewer preparation methods and taxpayer activities.
arithmetic errors, implying lower post-filing burden.

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 351,100 251,000 130,100 233,200 733,100
Estimated Average
Total Time (Hours) 107 69 53 42 5
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 $282,600,000 $506,400,000 $14,000,000
Estimated Total
Monetized Burden $3,466,900,000 $425,200,000 $594,600,000 $1,324,000,000 $71,400,000
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 Phone help, If you have questions and/or need help completing
about this publication and suggestions for future editions. You this form, call 877-829-5500. This toll-free telephone service is
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28 Instructions for Form 990-T

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Business Activity Codes                                  Industry Classification System (NAICS) commonly used 
                                                         by tax-exempt organizations. If you don’t see a code for 
The codes listed below that begin with the digits 1      the activity you need to categorize in the list below, refer 
through 8 are a selection from the North American        to the full list of NAICS codes at Census.gov/NAICS.
Agriculture, Forestry, Hunting,            513110   Newspaper publishers                532289 All other consumer goods rental  621500 Medical and diagnostic 
                                           513120   Periodical publishers               532420 Office machinery and equipment          laboratories
and Fishing                                513130   Book publishers                            rental and leasing               621610 Home health care services
Code                                       513140   Directory & mailing list publishers 533110 Lessors of nonfinancial          621910 Ambulance services
110000 Agriculture, forestry, hunting, and 513190   Other publishers                           intangible assets (except        621990 All other ambulatory health care 
                                                                                               copyrighted works)
       fishing                             516100   Radio & television broadcasting                                                    services
111000 Crop production                              stations                            Professional, Scientific, and           623000 Nursing and residential care 
                                                                                                                                       facilities
Mining                                     516210   Media streaming, social             Technical Services                      623990 Other residential care facilities
                                                    networks, & other content 
Code                                                providers                           Code                                    624100 Individual and family services
211100 Oil and gas extraction              517000   Telecommunications (including       541100 Legal services                   624110 Child & youth services
211120 Crude petroleum extraction                   wired, wireless, satellite, cable & 541200 Accounting, tax preparation,     624200 Community food and housing, 
                                                    other program distribution, 
211130 Natural gas extraction                       resellers, agents, other                   bookkeeping, and payroll                and emergency and other relief 
212000 Mining (except oil and gas)                  telecommunications, & Internet             services                                services
                                                    service providers)                  541300 Architectural, engineering, and  624210 Meal delivery programs, soup 
                                                                                               related services                        kitchens, or food banks
Utilities                                  Data Processing, Web Search                  541380 Testing laboratories & services  624310 Vocational rehabilitation services
Code                                                                                    541511 Custom computer programming      624410 Childcare services
221000 Utilities                           Portals, & Other Information                        services
Construction                               Services                                     541519 Other computer-related services  Arts, Entertainment, and 
Code                                       Code                                         541610 Management consulting services   Recreation
230000 Construction                        518210   Computing infrastructure            541700 Scientific research and          Code
236000 Construction of buildings                    providers, data processing, web            development services             711110 Theater companies and dinner 
                                                    hosting, & related services         541800 Advertising, public relations, & 
Manufacturing                              519200   Web search portals, libraries,             related services                        theaters
                                                    archives, & other info. services    541860 Direct mail advertising          711120 Dance companies
Code                                                                                    541900 Other professional, scientific,  711130 Musical groups and artists
310000 Manufacturing                       Finance and Insurance                               and technical services           711190 Other performing arts companies
323100 Printing and related support        Code                                         541990 Consumer Credit Counseling       711210 Spectator sports (including 
       activities                          522100   Depository credit intermediation           Services                                sports clubs and racetracks)
339110 Medical equipment and supplies               (including commercial banking,                                              711300 Promoters of performing arts, 
       manufacturing                                savings institutions, and credit    Management of Companies and                    sports, and similar events
                                                    unions)
Wholesale Trade                            522200   Nondepository credit                Enterprises                             713110 Amusement and theme parks
Code                                                intermediation                      Code                                    713200 Gambling industries
423000 Merchant wholesalers, durable       522210   Credit card issuing                 551111 Offices of bank holding          713910 Golf courses and country clubs
       goods                               522220   Sales financing                            companies                        713940 Fitness and recreational sports 
424000 Merchant wholesalers,               522291   Consumer lending                    551112 Offices of other holding                centers
       nondurable goods                    522292   Real estate credit                         companies                        713990 All other amusement and 
                                                                                                                                       recreation industries (including 
Retail Trade                               522299   Intl. secondary market, & other     Administrative and Support                     skiing facilities, marinas, and 
                                                    nondepository credit                                                               bowling centers)
Code                                                intermediation                      Services                                Accommodation and Food 
441100 Automobile dealers                  523000   Securities, commodity contracts,    Code
444100 Building materials and supplies              and other financial investments     561000 Administrative and support       Services
       dealers                                      and related activities                     services                         Code
445100 Grocery & convenience retailers     523940   Portfolio management &              561300 Employment services              721000 Accommodation
445200 Specialty food retailers                     investment advice                   561439 Other business service centers   721110 Hotels (except casino hotels) 
449100 Furniture and home furnishings      524113   Direct life insurance carriers             (including copy shops)                  and motels
       retailers                           524114   Direct health and medical           561499 All other business support       721210 RV (recreational vehicle) parks 
455000 General merchandise retailers                insurance carriers                         services                                and recreational camps
456110 Pharmacies & drug retailers         524126   Direct property and casualty        561500 Travel arrangement and           721310 Rooming and boarding houses, 
                                                    insurance carriers                         reservation services                    dormitories, and workers’ camps
456199 All other health and personal       524130   Reinsurance carriers                561520 Tour operators                   722320 Caterers
       care retailers                      524292   Pharmacy benefit management         561700 Services to buildings and        722410 Drinking places (alcoholic 
458000 Clothing, clothing accessories,              & other third-party administration         dwellings                               beverages)
       shoe, & jewelry retailers           524298   All other insurance-related                                                 722511 Full-service restaurants
459110 Sporting goods retailers                     activities                          Waste Management and 
                                                                                                                                722513 Limited-service restaurants
459120 Hobby, toy, & game retailers        525100   Insurance and employee benefit      Remediation Services                    722514 Cafeterias, grill buffets, and 
459130 Sewing, needlework, & piece                  funds
       goods retailers                     525920   Trusts, estates, and agency         Code                                           buffets
459140 Musical instrument & supplies                accounts                            562000 Waste management and             722515 Snack and non-alcoholic 
       retailers                           525990   Other financial vehicles                   remediation services (sanitary          beverage bars
459210 Book retailers & news dealers                (including mortgage REITs)                 services)                        Other Services
       (including newsstands)
459310 Florists                            Real Estate and Rental and                   Educational Services                    Code
459410 Office supplies & stationery        Leasing                                      Code                                    811000 Repair and maintenance
       retailers                                                                        611420 Computer training                812300 Dry cleaning and laundry 
459420 Gift, novelty, and souvenir         Code                                         611430 Professional and management             services
       retailers                           531110   Lessors of residential buildings           development training             812900 Other personal services
459510 Used merchandise retailers                   and dwellings (including equity     611600 Other schools and instruction    812930 Parking lots and garages
459900 Other miscellaneous retailers                REITs)                                     (other than elementary and 
                                           531120   Lessors of nonresidential 
Transportation and                                  buildings (except                          secondary schools or colleges 
                                                    miniwarehouses)(including                  and universities, which should 
Warehousing                                         equity REITs)                              select a code to describe their 
                                                                                               unrelated activities)
Code                                       531130   Lessors of miniwarehouses &         611710 Educational support services
                                                    self-storage units (including 
480000 Transportation                               equity REITs)                       Healthcare and Social 
485000 Transit and ground passenger        531190   Lessors of other real estate        Assistance
       transportation                               property (including equity REITs)
493000 Warehousing and storage             531310   Real estate property managers       Code
Information                                531320   Offices of real estate appraisers   621110 Offices of physicians
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

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Additional codes

Additional codes listed below that begin                                               Trade or business.   A trade or business 
with “9” are not part of the NAICS and are  Appendix A. Definitions                    is any activity conducted for the 
not listed on the NAICS website                                                        production of income from selling goods 
Census.gov/NAICS. The non-NAICS             Section 501(c)(3) organization.            or performing services. An activity must 
business activity codes are for use on      Section 501(c)(3) describes certain        be conducted with intent to profit to 
Form 990-T to identify various types of     organizations which are exempt from        constitute a trade or business. An activity 
investments, including certain              taxation under section 501(a). A 501(c)    doesn’t lose its identity as a trade or 
partnership and S corporation interests,    (3) organization is an organization        business merely because it is conducted 
reported as separate trades or              organized and operated exclusively for     within a larger group of similar activities 
businesses under section 512(a)(6)          charitable purposes. See Regulations       that may or may not be related to the 
without regard to the specific trade or     section 1.501(c)(3)-1(a).                  exempt purpose of the organization. If, 
business engaged in by the partnership      Annual return.     An annual return (for   however, an activity conducted for profit 
or S corporation. See Regulations           purposes of the public inspection rules    is an unrelated trade or business, no part 
section 1.512(a)-6.                         discussed below) is an exact copy of the   of it can be excluded from this 
                                            Form 990-T that was filed with the IRS,    classification merely because it doesn’t 
Non-NAICS Business                          including all schedules and attachments.   result in profit.
                                            It also includes any amendments to the     Separate trade or business.       An 
Activity Codes                              original return (amended return).          organization with more than one 
In the codes below that include “###”         By annual return (for purposes of the    unrelated trade or business should refer 
replace “#” with numbers to identify each   public inspection rules discussed below),  to Regulations section 1.512(a)-6 to 
interest (nonqualified S corporation or     we mean any annual return (defined         determine if two or more trades or 
passive income activity). For example, if   above) that isn't more than 3 years old    businesses are separate trades or 
four Schedules A are being filed to report  from the later of:                         businesses for purposes of calculating 
unrelated trade or business income from     • The date the return is required to be    UBTI.
four separate nonqualifying S corporation   filed (including extensions), or
interests, the business activity code       • The date that the return is actually     Unrelated trade or business income. 
entered in item C at the top of the four    filed.                                     Unrelated trade or business income is the 
Schedules A would be 904001, 904002,                                                   gross income derived from any trade or 
904003, and 904004, respectively.           Directly connected expenses.      To be    business (defined above) regularly 
                                            deductible in computing UBTI, expenses,    carried on and not substantially related to 
901101. Investment activities, including:   depreciation, and similar items must       (defined above) the organization's 
• Debt-financed income (512(b)(4));         qualify as deductions allowed by section   exempt purpose or function (aside from 
• Qualifying partnership interests;         162, section 167, or other sections, and   the organization's need for income or 
• Qualifying S corporation interests; and   must be directly connected with the        funds or the use it makes of the profits).
• Certain gross income of organizations     conduct of unrelated trade or business     Generally, for section 501(c)(7), (9), or 
subject to section 512(a)(3), or 501(c)(7), activity.                                  (17) organizations, unrelated trade or 
(9), or (17).                                 To be directly connected with the        business income is derived from 
901301. Insurance income derived from       conduct of an unrelated trade or business  nonmembers with certain modifications 
controlled foreign corporations (section    activity, expenses, depreciation, and      (see section 512(a)).
512(b)(17)).                                similar items must bear a proximate and    For a section 511(a)(2)(B) state 
                                            primary relationship to the conduct of the college or university, or a corporation 
903###. Passive income activities with      activity. For example, where facilities    wholly owned by such a college or 
controlled organizations.                   and/or personnel are used both to          university, unrelated trade or business 
904###. Nonqualifying S corporation         conduct exempt activities and to conduct   income is derived from activities not 
interests.                                  an unrelated trade or business, expenses   substantially related to exercising or 
                                            and similar items attributable to such     performing any purpose or function 
  You must report each separate             facilities and/or personnel must be        described in section 501(c)(3).
unrelated trade or business using the first allocated between the two uses on a 
two digits of the NAICS code that most      reasonable basis. The portion of any       An unrelated trade or business 
accurately describes the unrelated trade    such item allocated to the unrelated trade doesn’t include a trade or business:
or business based on the more specific      or business must bear a proximate and      1. In which substantially all the work 
NAICS code, such as at the 6-digit level.   primary relationship to that unrelated     is performed for the organization without 
Investment activities reported as           trade or business.                         compensation; or
separate trades or businesses that are 
identified with a non-NAICS business        Not substantially related to.   “Not       2. That is conducted by a section 
activity code should use the 6-digit code   substantially related to” means the        501(c)(3) or 511(a)(2)(B) organization 
from the list above. See Regulations        activity that produces the income doesn’t  mainly for the convenience of its 
section 1.512(a)-6(b)(1).                   contribute importantly to the exempt       members, students, patients, officers, or 
                                            purposes of the organization, other than   employees; or
  Item C at the top of Schedule A           the need for funds. Whether an activity    3. That sells items of work-related 
requires a 6-digit entry. Enter a 2-digit   contributes importantly depends in each    equipment and clothes, and items 
NAICS code by entering the first digits     case on the facts involved.                normally sold through vending machines, 
followed by four zeros.                                                                food dispensing facilities or by snack 
                                              For details, see Pub. 598, Tax on 
                                            Unrelated Business Income of Exempt        bars, by a local association of employees 
                                            Organizations.                             described in section 501(c)(4), organized 
                                                                                       before May 27, 1969, if the sales are for 

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the convenience of its members at their December 31, 1997. Generally, qualified 2. For contributions to other
usual place of employment; or sponsorship payment means any organizations, the amount claimed may
4. That sells merchandise payment to a tax-exempt organization by not be more than the smaller of:
substantially all of which was received by a person engaged in a trade or business a. 30% of UBTI figured without this
the organization as gifts or contributions; in which there is no arrangement or deduction; or
or expectation of any substantial return b. The amount by which 50% of the
benefit by that person other than the use UBTI is more than the contributions
5. That consists of qualified public or acknowledgment of that person's allowed in (1) above.
entertainment activities regularly name, logo, or product lines in
conducted by a section 501(c)(3), (4), or connection with the activities of the An increased limitation may be
(5) organization as one of its substantial tax-exempt organization. See section available for cash contributions under
exempt purposes (see section 513(d)(2) 513(i). section 170(b)(1)(G).
for the meaning of qualified public
Contributions not allowable in
entertainment activities); or
whole or in part because of the
6. That consists of qualified Appendix B. Charitable CAUTION! limitations may not be deducted
convention or trade show activities as a business expense but may be
regularly conducted by a section 501(c) Contribution Deduction carried over to the next 5 tax years.
(3), (4), (5), or (6) organization as one of
its substantial exempt purposes (see Charitable contributions. Filers should
section 513(d)(3) for the meaning of use the following information regarding Substantiation requirements.
qualified convention and trade show the charitable contribution deduction to Generally, no deduction is allowed for any
activities); or complete Form 990-T, Part I, line 4. contribution of $250 or more, unless the
organization gets a written
7. That furnishes one or more Corporations. The total amount claimed acknowledgment from the donee
services described in section 501(e)(1) normally can’t be more than 10% of UBTI organization that shows the amount of
(A) by a hospital to one or more hospitals figured without regard to the following. cash contributed, describes any property
subject to conditions in section 513(e); or • Any deduction for contributions. contributed, and either gives a
8. That consists of qualified pole • Any capital loss carryback to the tax description and a good faith estimate of
year under section 1212(a)(1).
rentals, as defined in section 501(c)(12) the value of any goods or services
(D), by a mutual or cooperative telephone Corporations on the accrual basis can provided in return for the contribution or
or electric company; or elect to deduct contributions paid by the states that no goods or services were
15th day of the 4th month after the end of
9. That includes activities relating to provided in return for the contribution.
the tax year if the contributions are
the distribution of low-cost articles, each The acknowledgment must be obtained
authorized by the board of directors
costing $12.50 (IRC 1 per Rev. Proc. by the due date (including extensions) of
during the tax year. Attach a declaration
2022-38, section 3.34(1)) or less, by an the organization's return, or, if earlier, the
statement to the return stating that the
organization described in section 501 date the return is filed. However, see
resolution authorizing the contributions
and contributions to which are deductible section 170(f)(8) and the related
was adopted by the board of directors
under section 170(c)(2) or (3) if the regulations for exceptions to this rule.
during the tax year. The declaration
distribution is incidental to the solicitation Don't attach the acknowledgment to the
statement must also include the date the
of charitable contributions; or return but keep it with the organization's
resolution was adopted. See Regulations records.
10. That includes the exchange or section 1.170A-11.
rental of donor or membership lists Note. For contributions of cash, check,
Charitable contributions over the 10%
between organizations described in or other monetary gifts (regardless of the
limitation can’t be deducted for the tax
section 501 and contributions to which amount), the organization must maintain
year, but may be carried over to the next
are deductible under section 170(c)(2) or a bank record, or a receipt, letter, or other
5 tax years.
(3); or written communication from the donee
In figuring the charitable contributions
11. That consists of bingo games as organization indicating the name of the
deduction, if the corporation has an NOL
defined in section 513(f). Generally, a organization, the date of the contribution,
carryover to the tax year, the 10% limit is
bingo game isn't included in any and the amount of the contribution.
applied using the taxable income after
unrelated trade or business if: Contributions of property other than
taking into account any deduction for the
a. Wagers are placed, winners are NOL. cash. If an organization contributes
determined, and prizes are property other than cash and claims over
To figure the amount of any remaining
distributed in the presence of all a $500 deduction for the property, it must
NOL carryover to later years, taxable
persons wagering in that game; and attach a statement to the return
income must be modified. See section
b. The game doesn’t compete with describing the kind of property
172(b). To the extent charitable
bingo games conducted by for-profit contributed and the method used to
contributions are used to reduce taxable
businesses in the same jurisdiction; determine its FMV. All organizations must
income for this purpose and increase an
and generally complete and attach Form
NOL carryover, a contributions carryover
c. The game doesn’t violate state or 8283, Noncash Charitable Contributions,
isn't allowed. See section 170(d)(2)(B).
local law; or to their returns for contributions of
12. That consists of conducting any Trusts. In general. property (other than money) if the total
game of chance by a nonprofit 1. For contributions to organizations claimed deduction for all property
organization in the state of North Dakota described in section 170(b)(1)(A), the contributed was more than $5,000.
and the conducting of the game doesn’t amount claimed may not be more than Special rules apply to the contribution of
violate any state or local law; or 50% of the UBTI figured without this certain property. See the instructions for
13. That consists of soliciting and deduction; and Form 8283. A donee organization must
receiving qualified sponsorship payments use Form 8282, Donee Information
that are solicited or received after Return, to report information to the IRS
and donors about dispositions of certain

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charitable deduction property made                                                       How does a 501(c)(3) organization 
within 3 years after the donor contributed     Appendix C. Public                        make its annual returns available for 
the property. See the instructions for                                                   public inspection?     A 501(c)(3) 
Form 8282.                                     Inspection of Form                        organization must make its annual returns 
Special rules for contributions of cer-        990-T Returns Filed by                    available in two ways.
tain easements in registered historic                                                    • By office visitation.
districts. The following rules apply to        Section 501(c)(3)                         • By providing copies or making them 
                                                                                         widely available.
certain contributions of real property         Organizations
interests located in a registered historic                                               Public inspection by office visitation. 
district.                                      Public inspection requirements of         A 501(c)(3) organization must make its 
• A deduction is allowed for the qualified     section 501(c)(3) organizations.          annual returns available for public 
real property interest, if the exterior of the Under section 6104(d), a section 501(c)   inspection without charge at its principal, 
building (including the front, side, rear,     (3) organization that files Form 990-T    regional, and district offices during 
and space above the building) is               must make its entire annual exempt        regular business hours.
preserved and no portion of the exterior       organization business income tax return 
is changed in a manner that is                 (including amended returns) available for Conditions that may be set for public 
inconsistent with its historical character.    public inspection.                        inspection at the office.  A 501(c)(3) 
                                                                                         organization:
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      •
only (no deduction is allowed for a            public inspection for a period of 3 years • Must allow the individual conducting 
                                                                                         the inspection to take notes freely during 
structure or land) if located in a registered  from the date the Form 990-T is required  the inspection, and
historic district. However, if listed in the   to be filed, including any extension.       Must allow an individual to make 
National Register, a deduction is also                                                   •
allowed for structures or land areas. See      What schedules and attachments to         photocopies of documents at no charge 
section 170(h)(4)(C).                          Form 990-T must be made available         but only if the individual brings 
• The organization must also include the       for public inspection? Only schedules,    photocopying equipment to the place of 
following information with the tax return.     attachments (statements), and             inspection.
  1. A qualified appraisal (as defined in      supporting documents that relate to the   Determining if a site is a regional or 
                                               imposition of tax on UBTI must be made 
section 170(f)(11)(E)) of the qualified                                                  district office.  A regional or district 
                                               available for public inspection when 
property interest.                                                                       office is any office of a 501(c)(3) 
                                               attached to a section 501(c)(3)           organization, other than its principal 
  2. Photographs of the entire exterior        organization's Form 990-T filed after     office, that has paid employees whose 
of the building.                               August 17, 2006.                          total number of paid hours a week are 
  3. A description of all restrictions on        The following documents, when           normally 120 hours or more. Include the 
the development of the building. See           attached to a section 501(c)(3)           hours worked by part-time (as well as 
section 170(h)(4)(B)(iii).                     organization's Form 990-T filed after     full-time) employees in making that 
• The organization's deduction may be          August 17, 2006, aren't required to be    determination.
reduced if rehabilitation credits were         made available for public inspections.      What sites aren't considered a 
claimed on the building. See section           • Form 926, Return by a U.S. Transferor   regional or district office.  A site isn't 
170(f)(14).                                    of Property to a Foreign Corporation.     considered a regional or district office if:
• A $500 filing fee may apply to certain       • Form 5471, Information Return of U.S. 
deductions over $10,000. See section           Persons With Respect to Certain Foreign     1. The only services provided at the 
170(f)(13).                                    Corporations.                             site further the organization's exempt 
                                               • Form 8271, Investor Reporting of Tax    purposes (for example, daycare, health 
Reduced deductions for contributions           Shelter Registration Number.              care, or scientific or medical research); 
for certain property.  The organization        • Form 8594, Asset Acquisition            and
must reduce its deduction for                  Statement Under Section 1060.               2. The site doesn’t serve as an office 
contributions of certain capital gain          • Form 8621, Information Return by a      for management staff, other than 
property and qualified appreciated stock.      Shareholder of a Passive Foreign          managers who are involved only in 
See sections 170(e)(1) and 170(e)(5).          Investment Company or Qualified           managing the exempt function activities 
Special rules for corporations.     A          Electing Fund.                            at the site.
larger deduction is allowed for certain        • Form 8832, Entity Classification          What if the 501(c)(3) organization 
contributions of:                              Election.                                 doesn’t maintain a permanent office? 
• Inventory and other property to certain      • Form 8858, Information Return of U.S.   If the 501(c)(3) organization doesn’t 
organizations for use in the care of the ill,  Persons With Respect to Foreign           maintain a permanent office, it will 
needy, or infants (including contributions     Disregarded Entities.                     comply with the public inspection by 
of apparently wholesome food (see              • Form 8865, Return of U.S. Person With   office visitation requirement by making 
section 170(e)(3)(C))); and                    Respect to Certain Foreign Partnerships.  the annual returns available at a 
• Scientific equipment used for research       • Form 8886, Reportable Transaction       reasonable location of its choice. It must 
to institutions of higher learning or to       Disclosure Statement.                     permit public inspection:
certain scientific research organizations      • Form 8913, Credit for Federal             Within a reasonable amount of time 
(see section 170(e)(4)).                       Telephone Excise Tax Paid.                •
                                                                                         after receiving a request for inspection 
                                               • Form 8925, Report of                    (normally, not more than 2 weeks), and
  See section 170, the related                 Employer-Owned Life Insurance               At a reasonable time of day.
regulations, and Pub. 526, Charitable          Contracts.                                •
Contributions.                                 • Form 8941, Credit for Small Employer      Optional method of complying.        If a 
                                               Health Insurance Premiums.                501(c)(3) organization that doesn’t have 
                                               • Form 8975, Country-by-Country           a permanent office wishes not to allow an 
                                               Report.                                   inspection by office visitation, it may mail 

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a copy of the requested documents must immediately provide the local Requests for parts of a document
instead of allowing an inspection. agent's name, address, and telephone copy. A person can request all or any
However, it must mail the documents number to the requester. specific part or schedule of the annual
within 2 weeks of receiving the request The local agent must: returns and the 501(c)(3) organization
and may charge for copying and postage • Be located within reasonable proximity must fulfill their request for a copy.
only if the requester consents to the to the principal, regional, or district office Can an agent be used to provide
charge. where the individual makes the request; copies? A 501(c)(3) organization can
501(c)(3) organizations with a and use an agent to provide document copies
permanent office but limited or no • Provide document copies within the for the written requests it receives.
hours. Even if a 501(c)(3) organization same time frames as the 501(c)(3) However, the agent must provide the
has a permanent office but no office organization. document copies under the same
hours or very limited hours during certain conditions that are imposed on the 501(c)
times of the year, it must still meet the Written requests for document cop- (3) organization itself. Also, if an agent
office visitation requirement. To meet this ies. If a 501(c)(3) organization receives fails to provide the documents as
requirement during those periods when a written request for a copy of its annual required, the 501(c)(3) organization will
office hours are limited or not available, returns (or parts of these documents), it continue to be subject to penalties.
follow the rules under What if the 501(c) must give a copy to the requester.
(3) organization doesn’t maintain a However, this rule only applies if the Example. The ABC Organization
permanent office, earlier. request: retained an agent to provide copies for all
• Is addressed to a 501(c)(3) written requests for documents. However,
Public Inspection—Providing organization's principal, regional, or the ABC Organization received a request
district office; for document copies before the agent
Copies • Is delivered to that address by mail, did.
A 501(c)(3) organization must provide electronic mail (email), facsimile (fax), or The deadline for providing a response
copies of its annual returns to any a private delivery service approved by the is referenced by the date that the ABC
individual who makes a request for a IRS (see Private Delivery Service, earlier, Organization received the request and
copy in person or in writing unless it for a list); and not when the agent received it. If the
makes these documents widely available. • Gives the address to which the agent received the request first, then a
In-person requests for document cop- document copies should be sent. response would be referenced to the date
ies. A 501(c)(3) organization must How and when a written request is that the agent received it.
provide copies to any individual who fulfilled. Can a fee be charged for providing
makes a request in person at the 501(c) • Requested document copies must be copies? A 501(c)(3) organization may
(3) organization's principal, regional, or mailed within 30 days from the date the charge a reasonable fee for providing
district office during regular business 501(c)(3) organization receives the copies. Also, it can require the fee to be
hours on the same day that the individual request. paid before providing a copy of the
makes the request. • Unless other evidence exists, a requested document.
Accepted delay in fulfilling an request or payment that is mailed is What is a reasonable fee? A fee is
in-person request. If unusual considered to be received by the 501(c) reasonable only if it is no more than the
circumstances exist and fulfilling a (3) organization 7 days after the postmark per-page copying fee charged by the IRS
request on the same day places an date. for providing copies, plus no more than
unreasonable burden on the 501(c)(3) • If an advance payment is required, the actual postage costs incurred to
organization, it must provide copies by copies must be provided within 30 days provide the copies.
the earlier of: from the date payment is received. What forms of payment must the
• The next business day following the • If the 501(c)(3) organization requires 501(c)(3) organization accept? The
day that the unusual circumstances end, payment in advance and it receives a form of payment depends on whether the
or request without payment or with request for copies is made in person or in
• The fifth business day after the date of insufficient payment, it must notify the writing.
the request. requester of the prepayment policy and
Cash and money orders must be
the amount due within 7 days from the
accepted for in-person requests for
Examples of unusual circumstances date it receives the request.
document copies. The 501(c)(3)
include: • A request that is transmitted to the organization, if it wishes, may accept
• Receipt of a volume of requests (for 501(c)(3) organization by email or fax is additional forms of payment.
document copies) that exceeds the considered received the day the request
501(c)(3) organization's daily capacity to is transmitted successfully. Certified check, money order, and
make copies, • Requested documents can be emailed either personal check or credit card must
• Requests received shortly before the instead of the traditional method of be accepted for written requests for
end of regular business hours that require mailing if the requester consents to this document copies. The 501(c)(3)
an extensive amount of copying, or method. organization, if it wishes, may accept
• Requests received on a day when the additional forms of payment.
501(c)(3) organization's managerial staff A document copy is considered as
capable of fulfilling the request is provided on the: Other fee information. If a 501(c)(3)
conducting official duties (for example, • Postmark date, organization provides a requester with
student registration or attending an • Private delivery date, notice of a fee and the requester doesn’t
off-site meeting or convention) instead of • Registration date for certified or pay the fee within 30 days, the 501(c)(3)
its regular administrative duties. registered mail, organization may ignore the request.
Use of local agents for providing • Postmark date on the sender's receipt If a requester's check doesn’t clear on
copies. A 501(c)(3) organization may for certified or registered mail, or deposit, the 501(c)(3) organization may
use a local agent to handle in-person • Day the email is successfully ignore the request.
requests for document copies. If a 501(c) transmitted (if the requester agreed to If a 501(c)(3) organization doesn’t
(3) organization uses a local agent, it this method). require prepayment and the requester

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doesn’t prepay, the 501(c)(3)                  1. The Internet posting requirement         • Takes reasonable precautions to 
organization must receive consent from       is met if:                                    prevent alteration, destruction, or 
the requester if the copying and postage     • The document is posted on an Internet       accidental loss of the document when 
charge exceeds $20.                          page that the 501(c)(3) organization          posted on its page; and
                                             establishes and maintains, or
501(c)(3) organizations subject to a                                                       • Corrects or replaces the document if a 
harassment campaign.   If the IRS            • The document is posted as part of a         posted document is altered, destroyed, or 
                                             database of like documents of other           lost.
determines that a 501(c)(3) organization 
                                             tax-exempt organizations on an Internet 
is being harassed, it isn't required to                                                      4. The notice requirement is met if a 
                                             page established and maintained by 
comply with any request for copies that it                                                 501(c)(3) organization notifies any 
                                             another entity.
reasonably believes is part of the                                                         individual requesting a copy of its annual 
harassment campaign.                           2. An additional posting information        return where the documents are available 
                                             requirement is met if:                        (including the Internet address). If the 
A group of requests for a 501(c)(3) 
organization's annual return is indicative   • The Internet page through which the         request is made in person, the 501(c)(3) 
                                             document is available clearly informs         organization must notify the individual 
of a harassment campaign if the requests 
                                             readers that the document is available        immediately. If the request is in writing, it 
are part of a single coordinated effort to 
                                             and provides instructions for downloading     must notify the individual within 7 days of 
disrupt the operations of the 501(c)(3) 
                                             the document;                                 receiving the request.
organization rather than to collect 
information about it.                        • After it is downloaded and viewed, the 
                                             web document exactly reproduces the           Penalties
Requests that may be disregarded             image of the annual return as it was          A penalty may be imposed on any person 
without IRS approval.  A 501(c)(3)           originally filed with the IRS, except for any who doesn’t make the annual returns 
organization may disregard any request       information permitted by statute to be        (including all required attachments) 
for copies of all or part of any document    withheld from public disclosure; and          available for public inspection according 
beyond the first two received within any     • Any individual with access to the           to the section 6104(d) rules discussed 
30-day period or the first four received     Internet can access, download, view, and      earlier. If more than one person fails to 
within any 1-year period from the same       print the document without special            comply, each person is jointly and 
individual or the same address.              computer hardware or software required        severally liable for the full amount of the 
                                             for that format (except software that is      penalty. The penalty amount is $20 for 
Making the Annual Returns                    readily available to members of the public    each day during which a failure occurs. 
Widely Available                             without payment of any fee) and without       The maximum penalty that may be 
                                             payment of a fee to the 501(c)(3) 
A 501(c)(3) organization doesn’t have to                                                   imposed on all persons for any one 
                                             organization or to another entity 
provide copies of its annual returns if it                                                 annual return is $10,000.
                                             maintaining the web page.
makes these documents widely available.                                                      Any person who willfully fails to 
However, it must still allow public            3. The reliability and accuracy 
inspection by office visitation.             requirements are met if the entity            comply with the section 6104(d) public 
                                             maintaining the Internet page:                inspection requirements is subject to an 
How does a 501(c)(3) organization            • Has procedures for ensuring the             additional penalty of $5,000.
make its annual returns widely availa-       reliability and accuracy of the document 
ble? A 501(c)(3) organization's annual       that it posts on the page;
returns are widely available if it meets all 
four of the following requirements.

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Index
 
                                         Estimated Tax Payments    12            Other tax amounts:
A                                        Estimated Tax Penalty 13                 Excess distribution from a passive 
Accounting method  6                     Exceptions and special rules:            foreign investment company 
Accounting Period  7                       Member income of mutual or             (PFIC)     10
Alcohol and Cellulosic Biofuel Fuels       cooperative electric companies.:
  Credit 19                                Income from qualifying shipping       P
Alternative Minimum Tax (Trusts            activities.   15                      Partnerships 18
  Only) 11                                 Passive loss and at-risk              Passive foreign investment company 
Amortization 21                            limitations.   15                      (PFIC) shareholders   19
Annual return 30                         Exploited Exempt Activity Income,       Payment card and third party network 
                                           Other Than Advertising Income      27
Appendix A. Definitions 30                                                        transactions  16
                                                                                 Proxy Tax 10
Appendix B. Charitable Contribution      F                                       Public Inspection Requirements of 
  Deduction  31
Appendix C. Public Inspection of         Foreign Organizations 12                 Section 501(c)(3) 8
  Form 990-T Returns Filed by            Foreign Tax Credit 11                   Purpose of Form 1
  Section 501(c)(3) Organizations     8
                                         G                                       R
B                                        Gain or loss on disposition of certain  Recapture of investment credit:
Backup Withholding 12                      brownfield property 17                 Recapture of low-income housing 
Biodiesel and Renewable Diesel Fuels     General Business Credit:                 credit:
  Credit 19                                Refundable small employer tax          Interest due under the look-back 
                                           credit 11                              method.       11
C                                        Gross Receipts or Sales:                Recoveries of bad debts deducted            19
Capital Gain Net Income  17                Advance payments:                     Rent Income  23
Capital Loss Deduction for Trusts     18   Installment sales                     Reporting 990-T Information on Other 
                                                                                  Returns  8
Certain Activities and Other 
  Information:                           I                                       Rounding Off to Whole Dollars              8

  Signature or other authority over a    Income from property financed with      S
  financial account in a foreign           qualified 501(c)(3) bonds  19
  country:                               Income or (Loss) From a Partnership     S Corporations:
  Report of Foreign Bank and               or an S Corporation 18                 Qualified tax-exempts:
     Financial Accounts (FBAR)           Interest 21                              Exception    18
Change in address:                       Interest, Annuities, Royalties, and     Section 199A Deduction 10
  Archer MSA  8                            Rents From Controlled                 Section 263A Uniform Capitalization 
  Coverdell ESA 8                          Organizations:                         Rules:
  IRA, SEP, or SIMPLE 8                    Controlled organization 25             Indirect expenses 20
  Qualified ABLE Program    8              Qualifying specified payment 25        Interest expense 20
  Qualified State Tuition Program 8        Specified payment 25                  Section 481(a) adjustment               7
  Roth IRA 8                                                                     Section 501(c)(3) organization           30
Charitable contributions 31              L                                       Section 965 Payments:
Charitable Contributions 9               Limitations on Deductions:               Net tax liability in installments       12
Compensation of Officers, Directors,       Activities Lacking a Profit Motive 19 Separate trades or businesses:
  and Trustees 27                          Deductions Related to Property         Dual-use property:
Consolidated periodicals    27             Leased to Tax-Exempt Entities      19  Which Parts to Complete                 14
Cost of Goods Sold 23                      Preference Items 19                   Substantiation requirements              31
Credit for Prior Year Minimum Tax     11   Section 263A Uniform Capitalization   Supplemental Information:
Credit for Small Employer Health           Rules  19                              Signature:
  Insurance Premiums:                      Transactions Between Related           Paid preparer    13
  Tax-exempt eligible small                Taxpayers   19                         Special rule for IRA trusts             13
  employer    12
                                         N
D                                                                                T
                                         Name and Address:                       Tax and Payments  11
Debt-financed property                     Change of name.  8                    Tax Due:
  disposition 17                         Net Gain or (Loss) 18                    Pay by credit or debit card:
Deduction for Net Operating Loss      9  Net Operating Loss (NOL)  22             IRS.gov/E-pay     13
Deductions Not Taken Elsewhere:          Nonaccrual experience method     17     Tax on Noncompliant Facility 
  Directly connected expenses  19
                                                                                  Income   11
Depletion 22                             O                                       Tax Rate Schedule for Trusts             10
Disposition of property received from 
  taxable subsidiary 17                  Organizations described in section      Total of Unrelated Business Taxable 
Disregarded entity 2                       501(c)(19) 19                          Income Computed From all 
                                         Organizations Taxable as                 Unrelated Trades or Businesses             9
                                           Corporations. 10                      Total Tax 12
E                                                                                Total Unrelated Business Taxable 
                                         Other Credits 11
Employer-owned life insurance            Other Deductions:                        Income   9
  contracts 19                             Extraterritorial income exclusion  22 Travel, Meals, and Entertainment            20

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Trust filers only:                     Unrelated Trade or Business Income: Who Must File 1
  Qualified Business Income Deduction:  Purpose of the Schedule 14
  Determines the unrelated business 
  income separately for each           W
  unrelated trade or business  10
                                       When are section 263A capitalized 
                                        costs deductible:
U                                       Exceptions 20
Unrelated Debt-Financed Income 24

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