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                                                                                                                 Department of the Treasury
                                                                                                                 Internal Revenue Service
2022

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . .     2  required to file electronically. See When, Where, and How To 
Who Must File     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2  File, later, for more information.
When, Where, and How To File . . . . . . . . . . . . . . . . .              3  Form 990-W has been made historical.         The Form 990-W is 
Depository Method of Tax Payment                . . . . . . . . . . . . . . 3  being made historical and prior revisions are still available on 
Other Forms That May Be Required . . . . . . . . . . . . . .                4  IRS.gov.
Accounting Methods . . . . . . . . . . . . . . . . . . . . . . . . .        6  Business Activity Codes.    The North American Industrial 
Specific Instructions     . . . . . . . . . . . . . . . . . . . . . . . . . 7  Classification System (NAICS) updates its business activity 
Items A Through L       . . . . . . . . . . . . . . . . . . . . . . . . . . 8  codes every 5 years, with the most recent update taking effect 
                                                                               for 2022.
Part I. Total Unrelated Business Taxable Income                   . . . . . 9
                                                                               State colleges and universities.     Item G of Form 990-T has 
Part II. Tax Computation        . . . . . . . . . . . . . . . . . . . . . . 9  been updated with a checkbox for state colleges and universities 
Part III. Tax and Payments        . . . . . . . . . . . . . . . . . . . .   10 that are not also recognized as exempt under section 501(c)(3).
Part IV. Statements Regarding Certain Activities                               Advanced manufacturing investment credit.      An eligible filer 
and Other Information . . . . . . . . . . . . . . . . . . . .               12 that claims the advanced manufacturing investment credit for tax 
Part V. Supplemental Information . . . . . . . . . . . . . . .              13 years ending after 2022, can make a deemed payment election 
General Instructions — Schedule A (Form 990-T)                      . . .   13 under section 48D. If the election is made, the filer is treated as 
                                                                               making a payment against tax by the amount of the credit. See 
Purpose of the Schedule . . . . . . . . . . . . . . . . . . . . .           13
                                                                               section 48D and the Instructions for Form 3468.
Specific Instructions—Schedule A (Form 990-T)                       . . .   15
                                                                               Investment and production tax credits under the Inflation 
Part I. Unrelated Trade or Business Income                  . . . . . . .   16 Reduction Act of 2022.  The Inflation Reduction Act of 2022 
Part II. Deductions Not Taken Elsewhere                 . . . . . . . . .   19 include provisions that extend, modify or create a number of 
Part III. Cost of Goods Sold . . . . . . . . . . . . . . . . . . .          22 energy-related investment and production tax credits. These 
Part IV. Rent Income . . . . . . . . . . . . . . . . . . . . . . . .        23 credits are allowed as general business credits (see General 
                                                                               Business Tax Credit, later). The Inflation Reduction Act also 
Part V. Unrelated Debt-Financed Income                  . . . . . . . . .   23 added new section 6417 under which an applicable entity may 
Part VI. Interest, Annuities, Royalties, and Rents                             make a deemed payment election with respect to each credit. 
From Controlled Organizations                   . . . . . . . . . . . . .   25 Applicable entities include:
Part VII. Investment Income of a Section 501(c)(7),                            • Any organization exempt from the tax imposed by subtitle A,
(9), or (17) Organization             . . . . . . . . . . . . . . . . . .   25 • Any state or political subdivision thereof,
                                                                               • The Tennessee Valley Authority,
Part VIII. Exploited Exempt Activity Income, Other                             • An Indian tribal government (as defined in section 30D(g)(9)),
Than Advertising Income                 . . . . . . . . . . . . . . . . .   26 • Any Alaska Native Corporation (as defined in section 3 of the 
Part IX. Advertising Income         . . . . . . . . . . . . . . . . . . .   26 Alaska Native Claims Settlement Act (43 U.S.C. 1602(m)), and
Part X. Compensation of Officers, Directors, and                               • Any corporation operating on a cooperative basis which is 
Trustees        . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   27 engaged in furnishing electric energy to persons in rural areas.
Part XI. Supplemental Information             . . . . . . . . . . . . . .   27 Alternative minimum tax.    The Inflation Reduction Act of 2022 
Business Activity Codes         . . . . . . . . . . . . . . . . . . . . .   29 imposed a corporate alternative minimum tax (CAMT) under 
                                                                               section 55. For tax years beginning after 2022, applicable 
Appendix A. Definitions . . . . . . . . . . . . . . . . . . . . . .         30 corporations within the meaning of section 59(k) may be 
Appendix B. Charitable Contribution Deduction . . . . .                     31 required to pay an alternative minimum tax. Short-period filers 
Appendix C. Public Inspection of Form 990-T                                    with a tax year starting after 2022, and ending before December 
Returns Filed by Section 501(c)(3)                                             31, 2023, see section 55 and the instructions for Part III, line 3, 
Organizations . . . . . . . . . . . . . . . . . . . . . . . . . .           32 later, for additional information.

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Reminders
Future Developments                                                            COVID-19 related credit for qualified sick and family leave. 
For the latest information about developments related to Form                  Generally, the credit for qualified sick and family leave wages, as 
990-T and its instructions, such as legislation enacted after they             enacted under the Families First Coronavirus Response Act 
were published, go to IRS.gov/Form990T.                                        (FFCRA) and amended and extended by the COVID-related Tax 
                                                                               Relief Act, of 2020 and the credit for qualified sick and family 
                                                                               leave wages, as enacted under the American Rescue Plan Act, 
                                                                               of 2021 (the ARP) have expired. However, employers that paid 

Mar 7, 2023                                                               Cat. No. 11292U

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qualified sick and family leave wages in 2022 for leave taken 5. Coverdell education savings accounts (ESAs) described
after March 31, 2020, and before October 1, 2021, may be under section 530.
eligible to claim a credit for qualified sick and family leave wages 6. Archer medical savings accounts (Archer MSAs) described
in 2022. See the March 2022 revision of the Instructions for Form under section 220.
941. Rules prohibiting double benefit continue to apply. 7. Health savings accounts (HSAs) described under section 223.
Each account of a type listed above is treated as a
General Instructions ! separate trust for unrelated business income tax
CAUTION purposes (even if there is a single owner or beneficiary
Purpose of Form for multiple accounts) and must have its own employer
identification number (EIN) if it will file Form 990-T to report
Use Form 990-T and Schedule A (as applicable) to: gross unrelated business taxable income of $1,000 or more. A
• Report unrelated business income; custodian is treated as a trustee. See section 408(h). Individual
• Figure and report unrelated business income tax liability; retirement annuities, unlike IRAs, aren't subject to unrelated
• Report proxy tax liability; business income tax.
• Claim a refund of income tax paid by a regulated investment
company (RIC) or a real estate investment trust (REIT), on IRAs and other tax-exempt shareholders in a RIC or
undistributed long-term capital gain; and TIP REIT filing Form 990-T, only to obtain a refund of income
• Request a credit for certain federal excise taxes paid for small tax paid on undistributed long-term capital gains should
employer health insurance premiums paid and request deemed complete Form 990-T as explained in IRAs and other tax-exempt
payment of certain investment or production tax credits under shareholders in a RIC or REIT, later.
the CHIPS Act and the Inflation Reduction Act of 2022.
Who Must File Organizations With or Without Current UBTI
Proxy tax. Organizations liable for the proxy tax on lobbying
Organizations With Current Unrelated Business and political expenditures. See Part II, Line 3. Proxy Tax, later,
Taxable Income (UBTI) for a discussion of the proxy tax. If your organization is only
required to file because of the proxy tax, see Proxy tax only
• Any disregarded entity, domestic, or foreign organization under Which Parts To Complete, later.
exempt under section 501(a), section 529(a), or section
529A(a), if it has gross income of $1,000 or more from a Other taxes or amounts. Organizations that are liable for
regularly conducted unrelated trade or business (see other taxes (such as tax deferred under section 1291 (Form
Regulations section 1.6012-2(e)). Gross income is gross 990-T, Part II, line 4) or section 1294 (Part III, line 4)), or
receipts minus the cost of goods sold, (see Regulations section organizations liable for other amounts due (or entitled to a refund
1.61-3). For a discussion of cost of goods sold, see Schedule A of, or credit for other amounts such as recapture of tax credits or
(Form 990-T), Part III. Cost of Goods Sold, later. interest adjustments (such as recapture of a credit or interest
due under a look-back rule (Form 990-T, Part III, line 3)). See a
The gross receipts from a gaming business include all discussion of these items later. If your organization is required to
! amounts wagered in games, not just the net proceeds file Form 990-T only because of these taxes or other amounts,
CAUTION after payment of prizes and other expenses. Cash prizes see Other Taxes under Which Parts To Complete, later.
aren't included in cost of goods sold, but are reported on Qualified opportunity investment (annual report).
Schedule A, Part II, line 14, as other deductions. Organizations that deferred a capital gain into a qualified
opportunity fund (QOF) must file Form 990-T with Schedule D,
A disregarded entity, as described in Regulations Form 8949, and Form 8997 attached. Each such organization
! sections 301.7701-1 through 301.7701-3, is treated as a must file Form 990-T with Form 8997 attached annually until the
CAUTION branch or division of its parent organization for federal organization disposes of the investment. See the Instructions for
tax purposes. Therefore, financial information applicable to a Form 8997.
disregarded entity must be reported as the parent organization's
financial information. If you are filing Form 990-T only because of the proxy
TIP tax, other taxes, or only to claim a refund, go directly to
• Colleges and universities of states and other governmental Proxy Tax Only, Other Taxes, or Claim for Refund, later.
units, and subsidiary corporations wholly owned by such If you are filing Form 990-T only to claim the credit for small
colleges and universities. However, a section 501(c)(1) employer health insurance premiums, see the instructions for
corporation that is an instrumentality of the United States and Part III, line 6f, later.
both organized and exempt from tax by an Act of Congress
doesn’t have to file. Which Parts To Complete
• Qualified tuition programs described under section 529 that Organizations with unrelated business taxable income.
have $1,000 or more of unrelated trade or business gross Organizations with UBTI must complete Form 990-T, and also a
income. separate Schedule A (Form 990-T) for each separate unrelated
• Qualified ABLE programs described under section 529A that trade or business. See Regulations section 1.512(a)-6.
have $1,000 or more of unrelated trade or business gross Complete all Schedules A (Form 990-T) first. See General
income. Instructions for Schedule A (Form 990-T), later.
• Trustees for the following trusts that have $1,000 or more of Consolidated returns. The consolidated return provisions of
unrelated trade or business gross income. section 1501 don't apply to exempt organizations, except for
1. Individual retirement accounts (IRAs), including traditional organizations having title holding companies. If a title holding
IRAs described under section 408(a). corporation described in section 501(c)(2) pays any amount of
2. Simplified employee pension IRAs (SEP IRAs) described its net income for a tax year to an organization exempt from tax
under section 408(k). under section 501(a) (or would, except that the expenses of
3. Savings incentive match plan for employees of small collecting its income exceeded that income), and the corporation
employers IRAs (SIMPLE IRAs) described under section 408(p). and organization file a consolidated return as described below,
4. Roth IRAs described under section 408A. then treat the title holding corporation as being organized and

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operated for the same purposes as the other exempt 2439, Notice to Shareholder of Undistributed Long-Term Capital
organization (in addition to the purposes described in section Gains.
501(c)(2)). Composite Form 990-T. If you are a trustee of more than
Two organizations exempt from tax under section 501(a), one one IRA invested in a RIC, you may be able to file a composite
a title holding company and the other earning income from the Form 990-T to claim a refund of tax under section 852(b) instead
first, will be includible corporations for purposes of section of filing a separate Form 990-T for each IRA. See Notice 90-18,
1504(a). If the organizations meet the definition of an affiliated 1990-1 C.B. 327, for information on who can file a composite
group and the other relevant provisions of chapter 6, then these return. Complete the steps under Claim for refund (including
organizations may file a consolidated return. The parent special instructions for IRA trustees) above and follow the
organization must attach Form 851, Affiliations Schedule, to the additional requirements in the notice.
consolidated return. For the first year a consolidated return is Backup withholding. If your only reason for filing Form
filed or for the first year a new corporation is added to a 990-T is to claim a refund of backup withholding, complete the
consolidated return, the title holding company must attach Form steps under Claim for refund (including special instructions for
1122, Authorization and Consent of Subsidiary Corporation To IRA trustees) above and attach a copy of the Form 1099
Be Included in a Consolidated Income Tax Return. See showing the withholding.
Regulations section 1.1502-100.
When, Where, and How To File
Organizations with no UBTI. An organization with no UBTI
that needs to file Form 990-T should complete and file Form When To File
990-T only. Such an organization does not complete or attach
Schedule A (Form 990-T) to its return. 15th day of 4th month or 15th day of 5th month. An
Proxy tax only. Organizations that are required to file Form employees' trust defined in section 401(a), an IRA (including
990-T only because they are liable for the proxy tax on lobbying SEPs and SIMPLEs), a Roth IRA, a Coverdell ESA, or an Archer
and political expenditures must complete the following. MSA must file Form 990-T by the 15th day of the 4th month after
• The heading (above Part I) except items J and K. the end of its tax year. All other organizations must file Form
• Part II, lines 3 and 7. 990-T by the 15th day of the 5th month after the end of their tax
• Part III. years. If the regular due date falls on a Saturday, Sunday, or
• Signature area. legal holiday, file no later than the next business day. If the return
• Attach a statement showing the proxy tax computation. is filed late, see Interest and Penalties, later.
Other taxes. Organizations that are required to file Form Extensions. Filers may request an automatic extension of time
990-T only because they are liable for tax under section 1291 or to file Form 990-T by using Form 8868, Application for Automatic
tax previously deferred under section 1294, recapture taxes, the Extension of Time To File an Exempt Organization Return.
tax on a hospital organization’s non-compliant facility income, or Amended return. To correct errors or change a previously filed
other items listed in the instructions for Part III, line 4, must return, check box F, “Check box if an amended return,” at the top
complete the following. of the return. Also, in Part V, Supplemental Information, include a
• The heading above Part I except items J and K. statement that indicates the line numbers on the original return
• The applicable lines of Parts II and III. that were changed and give the reason for each change.
• Signature area. Generally, the amended return must be filed within 3 years after
• Attach all appropriate forms and/or schedules showing the the date the original return was due or 3 years after the date the
computation of the applicable tax or taxes. organization filed it, whichever is later.
Other amounts due. Organizations that are required to file
Form 990-T only because they are liable for amounts due Where and How To File
because of the recapture of a tax credit, or other items listed in
the instructions for Part III, line 3, must complete the following. Required electronic filing. If you are an organization or trust
• The heading above Part I except items J and K. defined in section 511 and need to file Form 990-T, you are
• The applicable lines of Parts II and III that require an entry. required to file electronically. For additional information, visit
• Signature area. IRS.gov/E-file.
• Attach all appropriate forms and/or schedules showing the
computation of the applicable tax or taxes. Estimated Tax Payments
Claim for refund (including special instructions for IRA Generally, an organization filing Form 990-T must make
trustees or direct payments of certain credits). If your only installment payments of estimated tax if its estimated tax (tax
reason for filing a Form 990-T is to claim a refund or request a minus allowable credits) is expected to be $500 or more. Don't
credit complete the following. include the proxy tax when computing your estimated tax liability
• The heading above Part I except items J and K. for 2022.
• Enter -0- on Part I, lines 1 and 11, and Part III, line 4.
• Enter the credit or payment on Part III, lines 6a through 6g, as Depository Method of Tax Payment
appropriate. The organization must pay any tax due in full by the due date of
• Part III, lines 7, 10, and 11. the return without extension.
• Signature area.
For claims described below, follow the additional instructions Electronic Deposit Requirement
for that claim.
IRAs and other tax-exempt shareholders in a RIC or The organization must deposit all depository taxes (such as
REIT. If you are an IRA or other tax-exempt shareholder that is employment tax, excise tax, and corporate income tax)
invested in a RIC or a REIT and file Form 990-T only to obtain a electronically. Generally, electronic funds transfers are made
refund of income tax paid on undistributed long-term capital using the Electronic Federal Tax Payment System (EFTPS). For
gains, follow the steps under Claim for refund (including special more information about EFTPS or to enroll in EFTPS, go to
instructions for IRA trustees) above; check the applicable box in EFTPS.gov, or call 800-555-4477. To contact EFTPS using
item H at the top of Form 990-T; and attach Copy B of Form Telecommunications Relay Services (TRS) for people who are
deaf, hard of hearing, or have a speech disability, dial 711 and
Instructions for Form 990-T -3-

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then provide the TRS assistant the 800-555-4477 number above • Form 941, Employer's QUARTERLY Federal Tax Return;
or 800-733-4829. Also, see Pub. 966, Electronic Federal Tax • Form 943, Employer's Annual Federal Tax Return for
Payment System: A Guide to Getting Started. Agricultural Employees; or
Depositing on time. For EFTPS deposits to be made timely, • Form 945, Annual Return of Withheld Federal Income Tax.
the organization must submit the deposit by 8 p.m. Eastern time The trust fund recovery penalty may be imposed on all
the day before the deposit is due. persons who are determined by the IRS to have been
responsible for collecting, accounting for, and paying over these
Same-day wire payment option. If you fail to submit a deposit taxes, and who acted willfully in not doing so. The penalty is
transaction on EFTPS by 8 p.m. Eastern time the day before the equal to the unpaid trust fund tax. See the Instructions for Form
date a deposit is due, you can still make your deposit on time by 720; or Pub. 15 (Circular E), Employer's Tax Guide, for details,
using the Federal Tax Application (FTA), a same-day federal tax including the definition of responsible persons.
payment system that works in conjunction with EFTPS. Make
arrangements with your financial institution ahead of time, noting Other penalties. There are also penalties that can be imposed
the institution's availability, deadlines, and costs, if you believe for negligence, substantial understatement of tax, reportable
you would ever need the same-day wire payment option. To transaction understatements, and fraud. See sections 6662,
learn more, go to IRS.gov/SameDayWire. 6662A, and 6663.

Timeliness of deposits. The IRS will use business days to Other Forms That May Be Required
determine the timeliness of deposits. Business days are any day
that isn’t a Saturday, Sunday, or legal holiday in the District of Forms W-2 and W-3. File Form W-2, Wage and Tax
Columbia. Statement, and Form W-3, Transmittal of Wage and Tax
Statements, to report wages, tips, other compensation, withheld
Interest and Penalties income taxes, and withheld social security/Medicare taxes for
Your organization may be subject to interest and penalty employees.
charges if it files a late return or fails to pay tax when due. Form 461. Noncorporate taxpayers may need to file Form 461,
Generally, the organization isn't required to include interest and Limitation on Business Losses. See Form 461 and its
penalty charges on Form 990-T because the IRS can figure the instructions.
amount and bill the organization for it.
Form 720. File Form 720, Quarterly Federal Excise Tax Return,
Interest. Interest is charged on taxes not paid by the original to report environmental excise taxes, communications and air
due date of the return even if the organization uses Form 8868 to transportation taxes, fuel taxes, manufacturers taxes, ship
request an automatic extension of time to file. Interest is also passenger tax, and certain other excise taxes. See Trust fund
charged on penalties imposed for failure to file, negligence, recovery penalty, earlier.
fraud, substantial valuation misstatements, and substantial
understatements of tax from the due date (including extensions) Form 926. File Form 926, Return by a U.S. Transferor of
to the date of payment. The interest charge is figured at the Property to a Foreign Corporation, if the organization is required
underpayment rate determined under section 6621. to report certain transfers to foreign corporations under section
6038B.
Late filing of return. An organization that fails to file its return
when due (including extensions of time for filing) is subject to a Form 940. File Form 940, Employer's Annual Federal
penalty of 5% of the unpaid tax for each month or part of a month Unemployment (FUTA) Tax Return, if the organization is liable
the return is late, up to a maximum of 25% of the unpaid tax. The for FUTA tax.
minimum penalty for a return that is more than 60 days late is the Form 941 and Form 943. File Form 941, Employer's
smaller of the tax due or $450. The penalty won't be imposed if QUARTERLY Federal Tax Return; or Form 943, Employer's
the organization can show that the failure to file on time was due Annual Federal Tax Return for Agricultural Employees, to report
to reasonable cause. If you receive a notice about a penalty after income tax withheld, and employer and employee social security
you file this return, reply to the notice with an explanation and we and Medicare taxes. Also, see Trust fund recovery penalty,
will determine if you meet reasonable-cause criteria. Don’t earlier.
include an explanation when you file your return.
Form 945. File Form 945, Annual Return of Withheld Federal
Late payment of tax. The penalty for late payment of taxes is Income Tax, to report income tax withheld from nonpayroll
usually 1/2 of 1% of the unpaid tax for each month or part of a distributions or payments, including pensions, annuities, IRAs,
month the tax is unpaid. The penalty can’t exceed 25% of the gambling winnings, and backup withholding.
unpaid tax. If you receive a notice about a penalty after you file
this return, reply to the notice with an explanation and we will Form 965-A and Form 965-B. See Form 965-A, Individual
determine if you meet reasonable-cause criteria. Don’t include Report of Net 965 Tax Liability; Form 965-B, Corporate and Real
an explanation when you file your return. Estate Investment Trust (REIT) Report of Net 965 Tax Liability
and Electing REIT Report of 965 Amounts; and their respective
Estimated tax penalty. An organization that doesn’t make instructions, for more information.
estimated tax payments when due may be subject to an
underpayment penalty for the period of underpayment. Form 1098. File Form 1098, Mortgage Interest Statement, to
Generally, an organization is subject to this penalty if its tax report the receipt from any individual of $600 or more of
liability for the tax year is $500 or more and it didn’t make mortgage interest (including points) in the course of the
estimated tax payments of at least the smaller of its tax liability organization's trade or business and reimbursements of
for the tax year or 100% of the prior year's tax. See section 6655 overpaid interest.
for details and exceptions. Forms 1099-A, B, DIV, INT, LTC, MISC, NEC, OID, R, S, and
Trust fund recovery penalty. This penalty may apply if certain SA. Organizations engaged in an unrelated trade or business
excise, income, social security, and Medicare taxes that must be may be required to:
collected or withheld aren't paid to the U.S. Treasury. These • File an information return on Forms 1099-A, B, DIV, INT, LTC,
taxes are generally reported on: MISC, NEC, OID, R, S, and SA;
• Form 720, Quarterly Federal Excise Tax Return; • Report acquisitions or abandonments of secured property
through foreclosure;

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• Report proceeds from broker and barter exchange received more than $10,000 in cash or foreign currency in one
transactions; transaction or in a series of related transactions. See Form 8300
• Report certain dividends and distributions; and Regulations section 1.6050I-1(c).
• Report interest income;
Form 8582. File Form 8582, Passive Activity Loss Limitations,
• Report certain payments made on a per diem basis under a
for trusts that have losses (including prior-year unallowed
long-term care insurance contract, and certain accelerated
losses) from passive activities.
death benefits;
• Report miscellaneous income (such as payments to providers Form 8697. File Form 8697, Interest Computation Under the
of health and medical services, and miscellaneous income Look-Back Method for Completed Long-Term Contracts, to
payments); figure the interest due or to be refunded under the look-back
• Report nonemployee compensation; method of section 460(b)(2). The look-back method applies to
• Report original issue discount; certain long-term contracts that are accounted for under either
• Report distributions from retirement or profit-sharing plans, the percentage method or the completion-capitalized cost
IRAs, SEPs, SIMPLEs, and insurance contracts; method.
• Report proceeds from real estate transactions; and Form 8810. File Form 8810, Corporate Passive Activity Loss
• Report distributions from an HSA, an Archer MSA, or a and Credit Limitations, for closely held corporations that have
Medicare Advantage MSA. losses or credits (including prior-year unallowed losses and
When filing the above listed Form 1099 series credits) from passive activities.
! information returns, the organization must also file Form Form 8865. File Form 8865, Return of U.S. Persons With
CAUTION 1096, Annual Summary and Transmittal of U.S.
Respect To Certain Foreign Partnerships, if the organization:
Information Returns.
1. Controlled a foreign partnership (that is, owned more than
Form 4466. File Form 4466, Corporation Application for Quick a 50% direct or indirect interest in the partnership);
Refund of Overpayment of Estimated Tax, to apply for a quick 2. Owned at least a 10% direct or indirect interest in a
refund if the organization overpaid its estimated tax for the year foreign partnership while U.S. persons controlled that
by at least 10% of its expected income tax liability and at least partnership;
$500. 3. Had an acquisition, disposition, or change in proportional
Form 5498. File Form 5498, IRA Contribution Information, to interest in a foreign partnership that:
report contributions (including rollover contributions) to any IRA, a. Increased its direct interest to at least 10% or reduced its
including a SEP, SIMPLE, or Roth IRA, and to report Roth IRA direct interest of at least 10% to less than 10%;
conversions, IRA s, and the fair market value (FMV) of the
account. b. Changed its direct interest by at least a 10% interest; or
4. Contributed property to a foreign partnership in exchange
Form 5498-ESA. File Form 5498-ESA, Coverdell ESA for a partnership interest if:
Contribution Information, to report contributions (including
rollover contributions) to a Coverdell ESA. a. Immediately after the contribution, the organization
directly or indirectly owned at least a 10% interest in the foreign
Form 5498-SA. File Form 5498-SA, HSA, Archer MSA, or partnership; or
Medicare Advantage MSA Information, to report contributions to b. The FMV of the property the organization contributed to
an HSA or Archer MSA, and the FMV of an HSA, an Archer the foreign partnership in exchange for a partnership interest,
MSA, or a Medicare Advantage MSA. See the Instructions for when added to other contributions of property made to the
Forms 1099-SA and 5498-SA. foreign partnership by the organization or a related person
Form 5713. File Form 5713, International Boycott Report, if the during the preceding 12-month period, exceeds $100,000.
organization had operations in, or related to, certain boycotting
countries. Also, the organization may have to file Form 8865 to report
certain dispositions by a foreign partnership of property it
Form 5884-C. File Form 5884-C, Work Opportunity Credit for previously contributed to that foreign partnership if it was a
Qualified Tax-Exempt Organizations Hiring Qualified Veterans, partner at the time of the disposition. See Form 8865 and its
to claim the work opportunity credit for qualified first-year wages separate instructions.
paid to qualified veterans who begin working for the organization
on or after November 22, 2011, and before January 1, 2026. Form 8886. File Form 8886, Reportable Transaction Disclosure
Statement, to disclose information for each reportable
Form 5884-D. File Form 5884-D, Employee Retention Credit transaction in which the organization participated. Form 8886
for Certain Tax-Exempt Organizations Affected by Qualified must be filed for each tax year that the federal income tax liability
Disasters, to claim the employee retention credit against certain of the organization is affected by its participation in the
payroll taxes if activities of the organization became inoperable transaction. The organization may have to pay a penalty if it is
because of damage from a qualified disaster. See the required to file Form 8886 but doesn’t do so. The following are
Instructions for Form 5884-D for more information. reportable transactions.
Form 6198. File Form 6198, At-Risk Limitations, if the • Any listed transaction that is the same as, or substantially
organization has a loss from an at-risk activity conducted as a similar to, tax avoidance transactions identified by the IRS.
trade or business or for the production of income. • Any transaction offered under conditions of confidentiality for
which the organization paid an advisor a fee of at least
Forms 8275 and 8275-R. Taxpayers and income tax return $250,000.
preparers file Form 8275, Disclosure Statement, and Form • Certain transactions for which the organization has
8275-R, Regulation Disclosure Statement, to disclose items or contractual protection against disallowance of the tax benefits.
positions taken on a tax return or that are contrary to Treasury • Any transaction resulting in a loss of at least $10 million in any
regulations (to avoid parts of the accuracy-related penalty or single year or $20 million in any combination of years.
certain preparer penalties). • Certain transactions identified by the IRS in published
Form 8300. File Form 8300, Report of Cash Payments Over guidance as a “transaction of interest” (a transaction that the IRS
$10,000 Received in a Trade or Business, if the organization

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believes has a potential for tax avoidance or evasion, but hasn’t Form 8995-A. Refer to Form 8995-A. Use this form to figure
yet been identified as a listed transaction). your qualified business income deduction. Use separate
Form 8886-T. File Form 8886-T, Disclosure by Tax-Exempt Schedules A, B, C, and/or D, as appropriate, to help calculate
Entity Regarding Prohibited Tax Shelter Transaction, to disclose the deduction.
information with respect to each prohibited tax shelter Form 8997. File Form 8997, Initial and Annual Statement of
transaction to which the organization is a party. Qualified Opportunity Fund (QOF) Investments, annually to
Penalties. The organization may have to pay a penalty if it is report investments held in a QOF at any time during the year.
required to disclose a reportable transaction under section 6011 See the instructions for Form 8997.
and fails to properly complete and file Form 8886. The penalty is
$50,000 ($200,000 if the reportable transaction is a listed Accounting Methods
transaction) for each failure to file Form 8886 with its return or for An accounting method is a practice a taxpayer follows to
failure to provide a copy of Form 8886 to the Office of Tax determine the year in which to report revenue and expenses for
Shelter Analysis (OTSA). Other penalties, such as an federal income tax purposes. An accounting method includes
accuracy-related penalty under section 6662A, may also apply. not only the overall plan of accounting for gross income or
See the Instructions for Form 8886 for details. deductions (for example, an accrual method or the cash receipts
Form 8899. File Form 8899, Notice of Income From Donated and disbursement method), but also the treatment of an item
Intellectual Property, to report income from qualified intellectual used in such overall plan. However, a practice that does not
property. affect the timing for reporting an item of income or deduction for
purposes of determining taxable income is not an accounting
Form 8925. File Form 8925, Report of Employer-Owned Life method. A taxpayer, including a tax-exempt entity, adopts any
Insurance Contracts, which must be filed by every applicable permissible accounting method in the first year in which it uses
policyholder owning one or more employer-owned life insurance the method in determining its taxable income. See Rev. Proc.
contracts issued after August 17, 2006. 2015-13, 2015-5 I.R.B. 419.
Form 8975. Certain U.S. persons that are the ultimate parent An exempt organization may adopt an accounting
entity of a U.S. multinational enterprise group with annual ! method not only for purposes of calculating taxable
revenue for the preceding reporting period of $850 million or CAUTION income, but also for purposes of determining whether
more are required to file Form 8975. Form 8975 and its taxable income will be subject to federal income tax. For
Schedules A (Form 8975) must be filed with the income tax example, a tax-exempt entity may adopt an accounting method
return of the ultimate parent entity of a U.S. multinational for an item of income from an unrelated trade or business activity
enterprise group for the tax year in or within which the reporting even if the gross income from the activity is less than $1,000 and
period covered by Form 8975 ends. For more information, see is therefore not taxed for federal income tax purposes pursuant
Form 8975, Schedule A (Form 8975), and the Instructions for to Regulations section 1.6012-2(e).
Form 8975 and Schedule A (Form 8975).
Form 8978. File Form 8978, Partner's Additional Reporting An accounting method for an item of income or deduction may
Year Tax, to report adjustments shown on Form 8986, Partner's generally be adopted separately for each of the taxpayer’s
Share of Adjustment(s) to Partnership-Related Items, received trades or businesses. However, in order to be permissible, an
from a partnership that has elected to push out adjustments to accounting method must clearly reflect the taxpayer’s income.
partnership-related items to their partners. Unless instructed otherwise, the organization should generally
use the same accounting method on the Form 990-T and all
Form 8990. File Form 8990, Limitation on Business Interest schedules to report revenue and expenses that it regularly uses
Expense Under Section 163(j), to claim a deduction for business to keep its books and records.
interest unless the taxpayer meets certain specified exceptions.
Also, Form 8990 must be filed by any taxpayer that owns an Accounting method change. Once a taxpayer, including a
interest in a partnership with current-year or prior-year carryover tax-exempt entity, adopts an accounting method for federal
excess business interest expense allocated from the income tax purposes, the taxpayer must generally request the
partnership. IRS’s consent before it can change its accounting method (even
if the year in which the taxpayer seeks to make the change is a
Form 8991. File Form 8991, Tax on Base Erosion Payments of year in which it generates only tax-exempt income or is
Taxpayers With Substantial Gross Receipts, for any corporation, otherwise not taxed on its taxable income). In most cases, a
other than a RIC, a REIT, or an S corporation, that has taxpayer requests consent to change an accounting method by
aggregate gross receipts of at least $500 million in 1 or more of filing Form 3115, Application for Change in Accounting Method.
the 3 preceding tax years ending with the preceding tax year.” See Rev. Proc. 2015-13, or any successor, for general
Form 8993. File Form 8993, Section 250 Deduction for procedures for obtaining consent to change an accounting
Foreign-Derived Intangible Income (FDII) and Global Intangible method. See the Instructions for Form 3115 and Pub. 538 for
Low-Taxed Income (GILTI), for the allowance of a deduction for more information and exceptions. See Rev. Proc. 2021-34 for
the eligible percentage of FDII. The deduction is allowed only to additional procedures that may apply for obtaining automatic
domestic corporations (not including REITs, RICs, and S consent to change methods of accounting for revenue
corporations). recognition and certain other methods of accounting that may
affect the accounting for revenue recognition. Also see Rev.
Form 8994. File Form 8994, Employer Credit for Paid Family Proc. 2022-09 for additional procedures that may apply for
and Medical Leave, to figure the employer credit for paid leave. obtaining automatic consent to change certain methods of
Form 8995. Refer to Form 8995, Qualified Business Income accounting related to small businesses.
Deduction Simplified Computation, if you are a trust filing Form Depending on the specific accounting method change being
990-T and have unrelated business income, to determine if you requested, the taxpayer may be able to request automatic
have qualified business income (QBI) and may be allowed a QBI consent. This means that as long as the taxpayer follows the
deduction under section 199A. See the instructions for Form applicable procedures, the taxpayer does not have to wait for
8995, Part I, line 9. formal approval by the IRS before applying the new accounting
method available at Rev. Proc. 2022-14, for the List of Automatic
Changes for 2022; as modified by Rev. Proc. 2022-23; 2022-18

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I.R.B. 1052, available at Rev. Proc. 2022-23, providing guidance Adopt, Change, or Retain a Tax Year. For details on which
allowing late elections under sections 168(j)(8) and 168(l)(3)(D), procedure applies to your organization, see Rev. Proc. 85-58,
and also providing guidance allowing a late election under 1985-2 C.B. 740, and the Instructions for Form 1128.
section 181(a)(1), for a list of accounting method changes that
may qualify for automatic consent. For the short-period return, figure the tax by placing the
For example, a tax-exempt entity that has adopted an organization's taxable income on an annual basis. If the
accounting method for an item of income from an unrelated organization changes its accounting period, file Form 990-T for
trade or business must generally request consent before it can the short period that begins with the first day after the end of the
change its method of accounting for that item in any subsequent old tax year and ends on the day before the first day of the new
year. This is true regardless of whether gross income from the tax year. For details, see section 443.
unrelated trade or business is $1,000 or more in such
subsequent year. Reporting 990-T Information on Other Returns
Alternatively, if a taxpayer, including a tax-exempt entity, has
not yet adopted an accounting method for an item of income or Your organization may be required to file an annual information
deduction, a change in how the entity reports the item isn’t a return on:
change in accounting method. In this case, the procedures • Form 990, Return of Organization Exempt From Income Tax;
applicable to requests for accounting method changes (the • Form 990-EZ, Short Form Return of Organization Exempt
requirement to file Form 3115) aren’t applicable. See Rev. Proc. From Income Tax;
2015-13 for the definition of what constitutes an accounting • Form 990-PF, Return of Private Foundation or Section
method change. 4947(a)(1) Nonexempt Charitable Trust Treated as a Private
Thus, a tax-exempt entity that has never taken into account Foundation; or
an item of income or deduction in determining taxable income • Form 5500, Annual Return/Report of Employee Benefit Plan.
does not have to request consent to change its method of
reporting that item on its Form 990-T. Additionally, a tax-exempt If so, include on that information return the unrelated business
entity that has never been subject to federal income tax on an gross income and expenses (but not including the specific
item of income or deduction, but that is required to file a Form deduction claimed on Part I, line 8, or any expense carryovers
990-T solely due to owing a section 6033(e)(2) proxy tax, does from prior years) reported on Form 990-T for the same tax year.
not have to request consent to change its method for reporting
the item. Rounding Off to Whole Dollars
Adjustments required when changing an accounting
method. A taxpayer, including a tax-exempt entity, that
changes its accounting method must generally calculate and You may round off cents to whole dollars on the organization’s
report an adjustment to ensure that no portion of the item being return and schedules. If you do round to whole dollars, you must
changed is permanently omitted or duplicated (see section round all amounts. To round, drop amounts under 50 cents and
481(a)). However, depending on the specific method change, increase amounts from 50 to 99 cents to the next dollar. For
the IRS may provide that an adjustment isn’t required or example, $1.39 becomes $1 and $2.50 becomes $3. If you have
permitted. 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
Generally, a taxpayer, including a tax-exempt entity, will the total. If you are entering amounts that include cents, make
! recognize a positive section 481(a) adjustment (that is, sure to include the decimal point. There is no cents column on
CAUTION an increase to income) ratably over 4 tax years and will the form.
recognize a negative section 481(a) adjustment in full in the year
of change. See Rev. Proc. 2015-13, or its successor.
Public Inspection Requirements of Section 501(c)
An organization may elect a 1-year adjustment period for a (3) Organizations
positive section 481(a) adjustment that is less than $50,000. See
the Instructions for Form 3115 for more information and the Under section 6104(d), a section 501(c)(3) organization that files
requirements to make this election. Form 990-T must make its entire annual exempt organization
Include any positive section 481(a) adjustment on business income tax return (including amended returns)
Schedule A (Form 990-T), Part I, line 12 (Other income). If the available for public inspection. See Appendix C. Public
section 481(a) adjustment is negative, report it as a deduction on Inspection of Form 990-T Returns Filed by Section 501(c)(3)
Schedule A (Form 990-T), Part II, line 14 (Other deductions). Organization, later.
The section 481(a) adjustment should not be reported on Form
990-T as a negative number.
However, as discussed above, if a tax-exempt entity has not Specific Instructions
yet adopted an accounting method for an item, a change in how
the entity reports the item for purposes of filing the Form 990-T is Period Covered
not a change in accounting method. In this case, an adjustment File the 2022 form for calendar year 2022 or a fiscal year
under section 481(a) isn’t required or permitted. beginning in 2022 and ending in 2023. For a fiscal year, fill in the
tax year information at the top of the form.
Accounting Period The 2022 Form 990-T may also be used if:
• The organization has a tax year of less than 12 months that
The return must be filed using the organization's established begins and ends in 2023, and
annual accounting period. If the organization has no established The 2023 Form 990-T isn't available at the time the
•
accounting period, file the return on the calendar-year basis. organization is required to file its return. The organization must
show its 2023 tax year on the 2022 Form 990-T and take into
To change an accounting period, some organizations may account any tax law changes that are effective for tax years
make a notation on a timely filed Form 990, 990-EZ, 990-PF, or beginning after 2022.
990-T. Others may be required to file Form 1128, Application To
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Name and Address Item D. An employees' trust described in section 401(a) and
The name and address on Form 990-T should be the same as exempt under section 501(a) should enter its own trust
the name and address shown on other Forms 990. identification number in this block.
Include the suite, room, or other unit number after the street An IRA trust enters its own EIN in this block. An IRA trust
address. If the Post Office doesn’t deliver mail to the street never enters a social security number (SSN) or the trustee's EIN.
address and the organization has a P.O. box, show the box An EIN may be applied for in one of the following ways.
number instead of the street address. • Online go to IRS.gov/EIN. The EIN is issued immediately
once the application information is validated.
If the organization receives its mail in care of a third party • By mailing or faxing Form SS-4, Application for Employer
(such as an accountant or an attorney), enter on the street Identification Number.
address line “C/O” followed by the third party's name and street
address or P.O. box. Note. Only organizations located in the United States or U.S.
Change of name. If the organization has changed its possessions can use the online application. Foreign
organizations must use one of the other methods to apply for an
! name, it must check the box next to “Name of EIN in one of the following ways.
CAUTION organization” and also provide the following when filing
this return, if it is: Item E. If the organization is covered by a group exemption,
• A corporation, is incorporated with the state or limited liability enter the group exemption number.
company treated as a corporation for tax purposes (that is, not a Item F. Check this box if the organization previously filed a
disregarded entity)—an amendment to the articles of Form 990-T return with the IRS for a tax year and is now filing
incorporation or articles of organization along with proof of filing another return for the same tax year to amend the previously
with the state; filed return. Also, see Amended return, earlier, for information
• A trust—an amendment to the trust agreement with the you must include in an amended return.
trustee(s) signature; or
• An association, or an unincorporated association—an Item G. Check the box that describes your organization.
amendment to the articles of association, constitution, by-laws, “Other trust” includes IRAs, SEPs, SIMPLEs, Roth IRAs,
or other organizing document with signatures of at least two Coverdell ESAs, and Archer MSAs.
officers/members. Section 529 organizations check the 501(c) corporation or
501(c) trust box depending on whether the organization is a
Items A Through L corporation or a trust. Also, the box for 529(a) in item B must be
checked.
Item A. If the organization has changed its address since it last
filed a return, check item A. Compute your tax in Part II on the appropriate line. If you
check 501(c) corporation, you must compute your tax on
If a change in address occurs after the return is filed, use CAUTION! Part II, line 2, and leave line 2 blank. If you check 501(c)
TIP Form 8822-B, Change of Address or Responsible trust, 401(a) trust, or Other trust, you must compute your tax on
Party — Business, to notify the IRS of the new address. Part II, line 2, and leave line 1 blank.
Item B. Check the box under which the organization receives its Item H. Check if filing Form 990-T only to claim a credit from
tax exemption. Form 8941 or to claim a refund shown on Form 2439.
Qualified pension, profit-sharing, and stock bonus plans Item I. Check if you are a 501(c)(3) organization filing a
should check the 501 box and enter “a” between the first set of consolidated return with a 501(c)(2) title holding corporation.
parentheses. Do not make an entry in the space between the See Consolidated returns, earlier, for additional information.
second parentheses.
For other organizations exempt under section 501, check the Item J. Enter the total number of Schedules A attached to Form
box for 501 and enter the section that describes their tax-exempt 990-T. An organization with one or more unrelated trades or
status, for example, 501(c)(3). businesses will complete a separate Schedule A for each
unrelated trade or business.
For tax-exempt organizations that don't receive their
exemption under section 501, use the following guide. Complete all needed Schedules A before completing
TIP Parts I through V of Form 990-T.
IF you are a THEN check this box
IRA, SEP, or SIMPLE 408(e). Item K. Check “Yes” box if your organization is a corporation
and either (1) or (2) below applies.
Roth IRA 408A.
1. The corporation is a subsidiary in an affiliated group
Archer MSA 220(e). (defined in section 1504) but isn't filing a consolidated return for
Coverdell ESA 530(a). the tax year with that group.
Qualified State Tuition Program 529(a). 2. The corporation is a subsidiary in a parent-subsidiary
Qualified ABLE Program 529A. controlled group (defined in section 1563).
Excluded member. If the corporation is an "excluded
member" of a controlled group (see section 1563(b)(2)), it is still
A public college or university that has not obtained considered a member of a controlled group for purposes of item
recognition of exemption under section 501(c)(3) should not K.
check any box in item B.
Item L. Enter the name and address of the person who has the
Item C. Enter the total of the end-of-year assets from the organization's books and records and the telephone number at
organization's books of account. which they can be reached.

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Part I. Total Unrelated Business Section 199A Deduction
For trust filers only. If you are a trust filing Form 990-T and
Taxable Income have unrelated business income, you may have Qualified
Business Income (QBI) and may be allowed a QBI deduction
Total of Unrelated Business Taxable Income under section 199A.
Computed From All Unrelated Trades or Refer to the instructions for Form 8995, or Form 8995-A, (as
Businesses applicable) to determine whether you meet the requirements for
the QBI deduction and how to complete the applicable form.
Line 1. Enter the sum of the positive amounts from all
Schedules A (Form 990-T), Part II, line 18. Don’t include any Line 9. For purposes of calculating the QBI deduction, the
amount from Schedule A (Form 990-T), Part II, line 18, that is taxable income before the QBI deduction is the amount reported
less than zero in the computation of total unrelated trade or on Part I, line 7, minus the amount reported on Part I, line 8.
business income reported on Part I, line 1.
Note. For tax years beginning after 2017, the organization
Line 2. Reserved. Do not enter any amount on this line. determines the unrelated business income separately for each
unrelated trade or business, and the income for an unrelated
Charitable Contributions trade or business can’t be less than zero. Since a loss from an
unrelated trade or business isn’t included in the UBTI for the tax
Line 4. Enter contributions or gifts actually paid within the tax year due to application of section 512(a)(6), when calculating
year to or for the use of charitable and governmental QBI, omit items of income, gain, deduction, and loss from any
organizations described in section 170(c). Also, enter any unrelated trade or business that operated at a loss. A loss from
unused contributions carried over from earlier years. The an unrelated trade or business will be carried forward to future
deduction for contributions will be allowed whether or not directly years when the trust has income (or gain that is subject to
connected with the conduct of a trade or business. See unrelated business income tax) from the same unrelated trade or
Appendix B. Charitable Contribution Deduction, later. business and will be used in those years in calculating the QBI.
Additionally, W-2 wages and unadjusted basis immediately after
Deduction for Net Operating Loss Arising in Tax the acquisition (UBIA) of qualified property from an unrelated
Years Beginning Before 2018 trade or business that operated at a loss for the current tax year
aren’t used in calculating the limitation on QBI for taxpayers over
Line 6. Enter the smaller of (a) the amount of NOL arising in tax the threshold.
years beginning before January 1, 2018, or (b) the amount
shown on Part I, line 1. Part II. Tax Computation

Specific Deduction Organizations Taxable as Corporations
Line 1. Multiply Part I, line 11, by 21% (0.21).
Line 8. A specific deduction of $1,000 is allowed except for
computing the NOL and the net operating loss deduction under
Trusts
section 172.
Only one specific deduction may be taken, regardless of the Line 2. Trusts exempt under section 501(a), which otherwise
number of unrelated businesses conducted. However, a would be subject to subchapter J (estates, trusts, etc.), are taxed
diocese, province of a religious order, or convention or at trust rates. This rule also applies to employees' trusts that
association of churches is allowed one specific deduction for qualify under section 401(a). Most trusts figure the tax on the
each parish, individual church, district, or other local unit that UBTI amount on Part I, line 11, using the Tax Rate Schedule for
regularly conducts an unrelated trade or business. This applies Trusts, below. If the tax rate schedule is used, enter the tax on
only to those parishes, districts, or other local units that aren't Part II, line 2, and check the “Tax rate schedule” box. If the trust
separate legal entities but are components of a larger entity is eligible for the rates on net capital gains and qualified
(diocese, province, convention, or association). Each specific dividends, complete Schedule D (Form 1041) and enter on Part
deduction will be the smaller of $1,000 or the gross income from II, line 2, the tax from Schedule D (Form 1041). Check the
any unrelated trade or business the local unit conducts. If you “Schedule D” box on line 2 and attach Schedule D (Form 1041)
claim a total specific deduction larger than $1,000, attach a to Form 990-T.
statement showing how you figured the amount. The attached A trust with more than one unrelated trade or business
statement should include the name of each local unit, its gross ! that computes its tax on Schedule D (Form 1041) may
unrelated business income, and its allowable specific deduction CAUTION need to adjust the amount entered on Schedule D (Form
(which can’t exceed the smaller of $1,000 or the local unit’s 1041), Part V, line 22, to include only the net gain from
gross unrelated business income). Schedule D (Form 1041), line 18a (column 2), or line 19 (column
The diocese, province of a religious order, or convention or 2), that is included in income on Part I of Form 990-T.
association of churches must file a return reporting the gross
income and deductions of all its units that aren't separate legal Tax Rate Schedule for Trusts
entities. These local units can’t file separate returns because If the amount on Part II, line 2, is:
they aren't separately incorporated. Local units that are Of the amount
separately incorporated must file their own returns and can’t be Over— But not over— Tax is: over—
included with any other entity except for a title holding company. $0 $2,750 10% $0
See Consolidated Returns, earlier. 2,750 9,850 $275 + 24% 2,750
For details on the specific deduction, see section 512(b)(12) 9,850 13,450 1,979 + 35% 9,850
13,450 - - - - - 3,239 + 37% 13,450
and the related regulations.

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Proxy Tax Alternative Minimum Tax (Trusts Only)
Line 3. To pay the section 6033(e)(2) proxy tax on Line 5. Only trusts liable for tax on UBTI may be liable for the
nondeductible lobbying and political expenditures, enter the alternative minimum tax on certain adjustments and tax
proxy tax on Part II, line 3, and attach a statement showing the preference items.
computation. Trusts attach Schedule I (Form 1041), Alternative Minimum
Exempt organizations, except section 501(c)(3) and certain Tax—Estates and Trusts, and enter any tax from Schedule I on
other organizations, must include certain information regarding this line.
lobbying expenditures on Form 990. In addition, organizations
may have to provide notices to members regarding their share of Tax on Noncompliant Facility Income
dues to which the expenditures are allocable. See the
Instructions for Form 990 and Rev. Proc. 98-19, 1998-1 C.B. Line 6. There is a tax on a hospital organization’s noncompliant
547, for exceptions. facility income. See Regulations section 1.501(r)-2 for more
information. This tax is an income tax and is separate from the
If the organization elects not to provide the notices described excise tax on a failure to meet the community health needs
earlier, it must pay the proxy tax described in section 6033(e)(2). assessment requirements of section 501(r)(3) that is reported on
If the organization doesn’t include the entire amount of allocable Form 4720.
dues in the notices, it may have to pay the proxy tax. This tax
isn't applicable to section 501(c)(3) organizations. Figure the Total
proxy tax by multiplying the aggregate amount not included in
the notices described earlier by 21%. No deductions are Line 7. Add Part II, lines 3, 4, 5, and 6, to Part II, line 1 or 2,
allowed. whichever applies.

Other Tax Amounts Part III. Tax and Payments

Line 4. Part II, line 4, is intended to capture any positive tax Foreign Tax Credit
amount that doesn’t have a specific line. An MeF (Internet filing)
dependency (attachment) captures the detail. Use line 4 to • Corporations. See Form 1118, Foreign Tax
report tax amounts not reported on a specific line in Part II Credit—Corporations, for an explanation of when a corporation
(excluding tax deferred under section 1294, which is included on can claim this credit for payment of income tax to a foreign
Part III, line 4). country or U.S. possession.
• Use this line to report the base erosion minimum tax amount • Trusts. See Form 1116, Foreign Tax Credit (Individual,
under section 59A from Form 8991, Part IV, line 5e. Section 59A Estate, or Trust), for rules on how the trust computes the foreign
applies to base erosion payments paid or accrued in tax years tax credit.
beginning after 2017. See the Instructions for Form 8991 to Line 1a. Complete the form that applies to the organization and
determine if the organization is an applicable taxpayer under attach the form to Form 990-T. Enter the credit on this line.
section 59A(e), and, if the organization is an applicable taxpayer,
to determine the base erosion minimum tax amount. Enter the Other Credits
base erosion minimum tax amount on Part II, line 4.
• Use this line to report the tax and interest on a nonqualified Line 1b. Use line 1b to enter nonrefundable credits not
withdrawal from a capital construction fund (section 7518). identified elsewhere in Part III, line 1. Attach a statement that
• Use this line to report the deferred tax amount (defined in lists the applicable form and the amount of the credit. Such
section 1291(c)(1)) that is the aggregate increase in taxes credits may include the following.
(described in section 1291(c)(2)) on an excess distribution from • Any QEV passive activity credits from prior years allowed for
a passive foreign investment company (PFIC) that is taxable as the current tax year from Form 8834, Qualified Electric Vehicle
UBTI. See the Instructions for Form 8621, Information Return by Credit, line 7. Attach Form 8834.
a Shareholder of a Passive Foreign Investment Company or • The allowable credits from Form 8912, Credit to Holders of
Qualified Electing Fund. Tax Credit Bonds, line 12.
• Use this line to report the increase in tax attributable to a • If your organization received Form 8986 from one or more
partner's audit liability. If your organization received Form 8986 partnerships that have elected to push out adjustments to
from one or more partnerships that have elected to push out partnership-related items to their partners, complete and attach
adjustments to partnership-related items to their partners, Form 8978. See the Instructions for Form 8978. Enter the
complete and attach Form 8978. See the Instructions for Form amount of any decrease in taxes due from Form 8978, line 14.
8978. Include any increase in taxes due from Form 8978,
line 14, on Part II, line 4. If Form 8978 shows a decrease in tax, General Business Credit
do not report that here. Instead, a negative adjustment should be Line 1c. Enter the organization's total general business credit
reported in Part III on line 1b. (excluding the work opportunity credit, the employee retention
Unless otherwise indicated, when reporting deferred tax on credit, the empowerment zone employment credit, the Indian
line 4, don't include interest on the tax amount. Instead, report employment credit, and the credit for employer differential wage
such interest as an “other amount due” on Part III, line 3. For payments). Additionally, in some cases, certain general
example, interest on tax deferred under section 1291(c)(1), business credits should not be claimed if the seller of the
determined under section 1291(c)(3) is reported on Part III, property discloses to the organization that the seller intends to
line 3. claim the credit and discloses the tentative amount of the credit.
These include the QEV credit, the alternative motor vehicle
How to report. Attach a statement to Part II, line 4, showing (a) credit, the alternative fuel vehicle refueling property credit, and
a brief description of the type of tax, and (b) the amount. For the qualified plug-in electric drive motor vehicle credit.
example, if the organization is reporting $100 of tax due from an
increase in tax attributable to a partner's audit liability (Form The organization is required to file Form 3800, General
8978), the attachment would show “Form 8978” and “$100.” Business Credit, to claim any business credit. For a list of
credits, see Form 3800. Include the allowable credit from Form
3800, Part II, line 38, on Form 990-T, Part III, line 1c.

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An organization described in section 501(c) which is fund (QEF) in the amount entered on Part III, line 4. See Form
! exempt from tax under section 501(a) should not use 8621, Part VI, and How to report, later.
CAUTION Form 3800 to claim the refundable small employer tax
Subtract from the total entered on Part III, line 4, any deferred
credit for certain health insurance premiums paid on behalf of its tax on the corporation's share of undistributed earnings of a
employees. See the instructions for Part III, line 6f. QEF. See Form 8621, Part III).
How to report. Attach a statement showing the computation
Credit for Prior-Year Minimum Tax of each item included in, or subtracted from, the total on Part III,
line 4. Specify (a) the applicable Code section, (b) the type of
Line 1d. Use Form 8801 to figure the minimum tax credit and tax, and (c) the amount of tax.
any carryforwards of that credit for trusts. For corporations, use
Form 8827. Line 5.
Total Credits Section 965
Line 1e. Add lines 1a through 1d. Corporation. For tax years 2021 and later, a corporation will
not have any section 965(a) inclusions to report. If the
Line 3. Other Amounts Due organization elected to pay its section 965 net tax liability in
Recapture of investment credit. If property is disposed of installments, the organization should attach Form 965-B to Form
or ceases to be qualified property before the end of the 990-T. However, the current-year installment should be paid with
recapture period, there may be a recapture of the credit. See a separate voucher (which will be mailed to the organization in
Form 4255, Recapture of Investment Credit. advance of the payment due date). Don’t include the
Recapture of low-income housing credit. If the current-year installment in the Tax and Payments computation in
organization disposed of the building or an interest therein (or Part III.
there was a reduction in the basis of the credit), it may owe a tax. Trust. A trust that has "net 965 tax liability" for the current tax
See Form 8611, Recapture of Low-Income Housing Credit, and year (as described in the Instructions for Form 965-A) should
section 42(j) for details. enter on line 5 the amount from the current year line on Form
Interest due under the look-back method. If the 965-A, Part II, column (k). If the trust has no net 965 tax liability
organization used the look-back method for certain long-term for the current tax year, but has elected to pay its section 965 net
contracts, see Form 8697 for information on figuring the interest tax liability in installments, the trust should attach Form 965-A to
the organization may have to include. The organization may also Form 990-T, but should not include the current-year installment
have to include interest due under the look-back method for in the Tax and Payments computation in Part III (as described
property depreciated under the income forecast method. See above for corporations).
Form 8866, Interest Computation Under the Look-Back Method
for Property Depreciated Under the Income Forecast Method. Estimated Tax Payments
Other. Additional amounts due may be included in the total Line 6b. Enter the total estimated tax payments made for the
entered on Part III, line 3. Check the box for “Other” if the tax year.
organization includes any of the items discussed. See How to If an organization is the beneficiary of a trust, and the trust
report below for details on reporting these amounts on an makes a section 643(g) election to credit its estimated tax
attached statement. payments to its beneficiaries, include the organization's share of
• Interest on deferred tax attributable to installment sales of the estimated tax payments in the total amount entered here.
certain time-shares and residential lots (section 453(l)(3)) and Attach a statement showing the amount of the section 643(g)
certain nondealer installment obligations (section 453A(c)). credit amount.
• Interest due on deferred gain (section 1260(b)).
• If the organization makes the election to be taxed on its
Foreign Organizations
income from qualifying shipping activities, complete Form 8902,
Alternative Tax on Qualifying Shipping Activities, and attach it to Line 6d. Enter the tax withheld on UBTI from U.S. sources that
Form 990-T. See Income from qualifying shipping activities, isn't effectively connected with the conduct of a trade or
later. business within the United States. Attach Form 1042-S, Foreign
• Alternative minimum tax. Applicable corporations filing a Person's U.S. Source Income Subject to Withholding, or another
return for a short tax year that begins in 2023 and ends in 2023, form which verifies the withheld tax reported on Part III, line 6d.
include on Part III, line 3 any corporate AMT imposed under
section 55 by the Inflation Reduction Act of 2022. On the dotted Backup Withholding
line next to Part III, line 3 enter “CAMT” and the AMT amount.
Attach a detailed statement showing the computation of the Line 6e. Recipients of dividend or interest payments must
AMT. Include a computation of adjusted financial statement generally certify their correct tax identification number to the
income. Label the statement “CAMT”. bank or other payer on Form W-9. If the payer doesn’t get this
information, it must withhold part of the payments as “backup
How to report. If the organization checked the “Other” box, withholding.” If your organization was subject to erroneous
attach a statement showing the computation of each item backup withholding because the payer didn’t realize you were an
included in the total for Part III, line 3. In addition, identify (a) the exempt organization and not subject to this withholding, you can
applicable Code section or form number, (b) the type of tax or claim credit for the amount withheld by including it on Part III,
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
Total Tax Premiums
Line 4. Include any deferred tax on the termination of a section Line 6f. An organization described in section 501(c) which is
1294 election applicable to shareholders in a qualified electing exempt from tax under section 501(a) may be eligible to claim
the refundable small employer tax credit for a percentage of

Instructions for Form 990-T -11-

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certain health insurance premiums paid on behalf of its the penalty, you must complete and attach Form 2220 if either of
employees. the following applies.
A tax-exempt eligible small employer can request the • The annualized income or adjusted seasonal installment
refundable credit by attaching Form 8941, Credit for Small method is used.
Employer Health Insurance Premiums, showing the calculation • The organization is a “large organization” computing its first
for the amount of the refundable credit claimed. A tax-exempt required installment based on the prior year's tax.
organization is eligible for the refundable credit if it is an If you attach Form 2220, check the box on Form 990-T, Part
organization that is described in section 501(c) which is exempt III, line 8, and enter the amount of any penalty on this line.
from tax under section 501(a). The organization must keep
records to substantiate the amount of the credit claimed. Tax Due
If a tax-exempt eligible small employer is filing Form Line 9. You must pay the tax in full when the return is filed. You
TIP 990-T only to request a credit for small employer health may pay by EFTPS. For more information about EFTPS, see
insurance premiums paid, complete the following steps. Electronic Deposit Requirement, earlier. Also, you may pay by
1. Fill in the heading (the area above Part I) except items J credit or debit card.
and K. Check the box for “Claim credit from Form 8941” in item To pay by credit or debit card. For information on paying
H . your taxes electronically, including by credit or debit card, go to
2. Enter -0- on Part I, line 11, and Part III, line 4. IRS.gov/E-pay.

3. Enter the credit from Form 8941, line 20, on Part III, Part IV. Statements Regarding Certain
line 6f.
4. Complete Part III, lines 7, 10, and 11, and the signature Activities and Other Information
area.
Complete all lines in Part IV.
Line 1. Check “Yes” if either item (1) or (2) below applies.
Other Credits and Payments
1. At any time during the year the organization had an
Line 6g. Check the appropriate box(es) and enter the following. interest in or signature or other authority over a financial account
• From Form 2439, Credit for Federal Excise Tax Paid on Fuels, in a foreign country (such as a bank account, securities account,
the credit from a RIC or a REIT. Also, attach Form 2439. If you or other financial account); and
are filing a composite Form 990-T, see Composite Form 990-T a. The combined value of the accounts was more than
under Which Parts To Complete, earlier. $10,000 at any time during the year; and
• From Form 4136, the credit for federal tax paid on fuels. Also,
attach Form 4136, if the organization qualifies to claim this b. The accounts were not with a U.S. military banking facility
credit. operated by a U.S. financial institution.
For other credits, check the “Other” box and provide the 2. The organization owns more than 50% of the stock in any
following information: corporation that would answer “Yes” to item (1).
• The number of the form used to calculate the credit, or the If the “Yes” box is checked, write the name of the foreign
code section that establishes the credit, country or countries. If the list of foreign country names will not fit
• A brief description of the credit, and in the available space, continue the list in Part V, Supplemental
• The amount of the credit. Information.
If necessary, provide information required to claim a specific Get FinCEN Form 114, Report of Foreign Bank and Financial
credit in Part V, Supplemental Information. Accounts (FBAR), to see if the organization is considered to
Other credits may include the following. have an interest in or signature or other authority over a financial
• The credit for ozone-depleting chemicals. Include any credit account in a foreign country (such as a bank account, securities
the organization is claiming under section 4682(g) for taxes paid account, or other financial account). If the organization is
on chemicals used as propellants in metered-dose inhalers. required to file this form, file FinCEN Form 114 electronically with
• The amount of current year net section 965 tax liability. For a the Department of the Treasury using FinCEN's BSA E-Filing
trust, this amount will be from Form 965-A, Part I, column (d), System. Because FinCEN Form 114 isn't a tax form, don't file it
line 4. with Form 990-T.
See FinCEN for more information.
Note: Do not use Part III, line 6g to claim a refund of federal tax
withheld and shown on Form 1099. Claims for refund of backup Line 2. The organization may be required to file Form 3520,
withholding should be shown on Part III, line 6e. Annual Return To Report Transactions With Foreign Trusts and
After entering these amounts in the appropriate spaces, add Receipt of Certain Foreign Gifts, if either of the following applies.
them all together and enter the total on Part III, line 6g. • It directly or indirectly transferred money or property to a
foreign trust. For this purpose, any U.S. person who created a
Form 8849, Claim for Refund of Excise Taxes, may be foreign trust is considered a transferor.
TIP used to claim a periodic refund of excise taxes instead of • It is treated as the owner of any part of the assets of a foreign
waiting to claim a credit on Form 4136. See the trust under the grantor trust rules.
Instructions for Form 8849 and Pub. 510, Excise Taxes .
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
received as a shareholder in a mutual fund or other RIC.

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Line 4. Use line 4 to show the amount of the NOL carryover to             • A manually signed copy (of the letter submitted to the IRS with 
the tax year from tax years prior to 2018 (“pre-2018 NOL”), even          the returns and a record of any arithmetic errors corrected) must 
if some of the loss is used to offset income on this return. The          be retained on behalf of the IRA trusts listed in the letter and it 
amount to enter is the total of all pre-2018 NOLs generated in            must be available for inspection by the IRS.
any year prior to 2018, and not used to offset income (either as a        Paid preparer. If an officer of the organization filled in its return, 
carryback or carryover) to a tax year prior to 2022. Do not reduce        the paid preparer's space should remain blank. Anyone who 
the amount by any NOL deduction reported on Part I, line 6.               prepares the return but doesn’t charge the organization should 
Line 5. Use the table in line 5 to show the amount of each NOL            not sign the return. Certain others who prepare the return should 
carryover from tax years after 2017 that is attributable to each          not sign. For example, a regular, full-time employee of the 
separate trade or business conducted at any time after 2017               organization, such as a clerk, secretary, etc., should not sign.
(“siloed post-2017 NOL”) to the tax year. Include the NOL for               Generally, anyone who is paid to prepare the organization's 
each separate trade or business conducted after 2017, even if a           tax return must sign it and fill in the Paid Preparer Use Only area.
Schedule A for any one or more specific trades or businesses                The paid preparer must complete the required preparer 
isn’t included with this return for this tax year. Report the full        information and do the following.
amount of the available NOL for each separate trade or                    • Sign the return in the space provided for the preparer's 
business, even if some of the loss is used to offset income               signature.
reported on a Schedule A filed for that separate trade or                 • Give a copy of the return to the organization.
business on this return.
  In the first column under line 5, identify the business activity        Note. A paid preparer may sign original returns, amended 
code to which each NOL relates. In the second column, enter               returns, or requests for filing extensions by rubber stamp, 
the total amount of each siloed post-2017 NOL generated in any            mechanical device, or computer software program. Also, 
prior year after 2017 and not used to offset income (either as a          facsimile signatures are authorized.
carryback or carryover) to a tax year prior to 2022. Don’t reduce         Paid preparer authorization.     If the organization wants to allow 
the amount by any NOL deduction reported on Schedule A, Part              the IRS to discuss this tax return with the paid preparer who 
II, line 17. See Separate Trades or Businesses, later, for                signed it, check the “Yes” box in the signature area of the return. 
information about changing the business activity code                     This authorization applies only to the individual whose signature 
associated with a particular trade or business, and the effect of         appears in the Paid Preparer Use Only section of its return. It 
such a change on NOLs.                                                    doesn’t apply to the firm, if any, shown in that section.
Line 6. Generally, the organization must file Form 3115 to                  If the “Yes” box is checked, the organization is authorizing the 
change its accounting method. An exception applies where a                IRS to call the paid preparer to:
section 501(c) organization changes its accounting method to              • Give the IRS any information that is missing from its return;
comply with the Financial Accounting Standards Board (FASB)               • Call the IRS for information about the processing of its return 
Accounting Standards Codification 958, Not-for-Profit Entities            or the status of its refund or payment(s); and
(ASC 958). See Notice 96-30, 1996-1 C.B. 378. See Accounting              • Respond to certain IRS notices that the organization has 
Methods, earlier.                                                         shared with the preparer about a math error, offsets, and return 
                                                                          preparation. The notices won't be sent to the preparer.
Part V. Supplemental Information
                                                                            The organization isn't authorizing the paid preparer to receive 
Use Part V to provide the IRS with narrative information required         any refund check, bind the organization to anything (including 
for responses to specific questions on Form 990-T, and to                 any additional tax liability), or otherwise represent the 
explain the organization’s operations or responses to various             organization before the IRS. If the organization wants to expand 
questions.                                                                the paid preparer's authorization, see Pub. 947, Practice Before 
                                                                          the IRS and Power of Attorney.
Signature
                                                                            The authorization can’t be revoked. However, the 
Corporations.    The return must be signed and dated by the               authorization will automatically end no later than the due date 
president, vice president, treasurer, assistant treasurer, or chief       (excluding extensions) for filing next year's Form 990-T.
accounting officer, or by any other corporate officer (such as a 
tax officer) authorized to sign. Receivers, trustees, or assignees                Enter the paid preparer’s Preparer Tax Identification 
must also sign and date any return filed on behalf of the                   !     Number (PTIN), not their SSN, in the “PTIN” box in the 
organization.                                                             CAUTION paid preparer’s block. Because Form 990-T is publicly 
                                                                          disclosable when filed by a 501(c)(3) organization, any 
Trusts. The return must be signed and dated by the individual             information entered in this block will be publicly disclosed. For 
fiduciary, or by the authorized officer of the trust receiving or         more information about PTINs, go to IRS.gov/Taxpros.
having custody or control and management of the income of the 
trust. If two or more individuals act jointly as fiduciaries, any one 
of them may sign.                                                         General Instructions — Schedule A 
  Special rule for IRA trusts. A trustee of IRA trusts may use 
a facsimile signature if all of the following conditions are met.         (Form 990-T)
• Each group of returns sent to the IRS must be accompanied 
by a letter signed by the person authorized to sign the returns           Purpose of the Schedule
declaring, under penalties of perjury, that the facsimile signature       Complete a separate Schedule A to report income and allowable 
appearing on the returns is the signature adopted by that person          deductions for each separate unrelated trade or business.
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 

Instructions for Form 990-T                                           -13-

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conduct of two or more unrelated trades or businesses or business by the deductions allowed by Chapter 1 that are
calculated UBTI by determining its aggregate gross income from directly connected with the carrying on of such trade or
all such unrelated trades or businesses and reducing that business. To be “directly connected” with a trade or business, an
amount by the aggregate deductions allowed with respect to all item of deduction must have a proximate and primary
such unrelated trades or businesses. However, section 512(a) relationship to the carrying on of the unrelated trade or business
(6) changed this calculation for exempt organizations with more generating the gross income. See Regulations section
than one unrelated trade or businesses so that, in the case of 1.512(a)-1(a). Expenses, depreciation, and similar items
any exempt organization with more than one unrelated trade or attributable solely to the conduct of an unrelated trade or
business: business are proximately and primarily related to that trade or
• UBTI, including for purposes of determining any NOL business and qualify to reduce income from such trade or
deduction, shall be computed separately with respect to each business under section 512(a)(1) to the extent such items meet
trade or business and without regard to section 512(b)(12) the requirements of section 162 (trade or business expenses),
(allowing a specific deduction of $1,000); section167 (depreciation), and other relevant provisions. To the
• The UBTI of such exempt organization shall be the sum of the extent that an exempt organization may have items of deduction
UBTI so computed with respect to each trade or business, less a that are shared between an exempt activity and an unrelated
specific deduction under section 512(b)(12); and trade or business, Regulations section 1.512(a)-1(c) provides
• For purposes of section 512(a)(6)(B), UBTI with respect to special rules for allocating such expenses. For example, if
any such trade or business shall not be less than zero. facilities are used both to carry on exempt activities and to
conduct unrelated trade or business activities, then expenses,
Thus, under section 512(a)(6), an exempt organization may depreciation, and similar items attributable to such facilities must
not aggregate income and deductions from all unrelated trades be allocated between the two uses on a reasonable basis. See
or businesses when calculating UBTI. Regulations section 1.512(a)-1(c). The allocation issues under
section 512(a)(1) are also relevant under section 512(a)(6)
An organization determines whether it regularly carries on because an exempt organization with more than one unrelated
one or more unrelated trades or businesses by applying sections trade or business must not only allocate indirect expenses
511 through 514. Identify each separate trade or business using among exempt and taxable activities, as described in
the first two digits of the NAICS two-digit code that most Regulations section 1.512(a)-1(c) but also among separate
accurately describes the unrelated trade or business based on unrelated trades or businesses.
the more specific NAICS code, such as at the six-digit level.
Identify activities in the nature of investments, which aren’t The allocation of expenses, depreciation, and similar items
described in NAICS, using the appropriate business activity using an unadjusted gross-to-gross method is not reasonable if
code described under Non-NAICS Business Activity Codes, the cost of providing the good or service is substantially the
later. same but the price charged differs between related and
unrelated activities.
An organization will use each NAICS two-digit code only
once. For example, a hospital organization that operates several
Which Parts To Complete
hospital facilities that include pharmacies that sell goods to the
general public would include all the pharmacies under the
NAICS two-digit code for retail trade, regardless of whether the Complete a separate Schedule A, Parts I and II, for each
hospital organization keeps separate books and records for unrelated trade or business. Complete only the lines relevant to
each pharmacy. the unrelated trade or business being reported on that
Schedule A.
Once a two-digit NAICS code or business activity code is Is gross income more than $10,000? If the sum of the
used for an unrelated trade or business, you should continue to amounts in all Schedules A (Form 990-T), Part I, line 13, column
use that same code in subsequent tax years. If it is necessary to (A), is more than $10,000, you must complete all Parts of each
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
which the activities are reported. The statement should include Is gross income $10,000 or less? If the sum of the amounts in
(1) the two-digit NAICS code or business activity code used in all Schedules A (Form 990-T), Part I, line 13, column (A), is
the previous tax year; (2) the two-digit NAICS code or business $10,000 or less, complete Schedule A (Form 990-T) and Form
activity code used this year and, if filing more than one 990-T as follows.
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,
! transition rule for certain partnership interests. The enter the amount for Part I, line 2, on Part III, line 8. For Part I,
CAUTION transition period ended on the first day of the first tax
year beginning after December 2, 2020. line 6, 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).

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Form 990-T income includes all gross income, other than income derived in
the ordinary course of a trade or business, that is attributable to
1. Complete all applicable lines in the heading area. interest, dividends, annuities, and royalties (by contrast, a bank's
receipt of interest is in the ordinary course of a trade or business,
2. Complete all applicable lines as needed to determine the as is a securities dealer's receipt of dividends). Portfolio income
appropriate tax, applicable credits, and balance due or refund also includes gain or loss from the disposition of property that
amount. produces portfolio income or is held for investment (see section
3. Complete the signature area. 163(d)(5)). The rule treating portfolio income as not from a
passive activity doesn’t apply to the extent that income, of a type
If an entry for a line on Part I or Part II must be made on a generally regarded as portfolio income, is derived in the ordinary
! different Part of Schedule A, complete only the lines in course of a trade or business. For example, the business income
CAUTION the Part that reference a specific line on Part I or Part II.
of a bank typically is largely interest. Similarly, a securities
Leave all other lines in the applicable Part blank. broker/dealer may earn a substantial portion of the income from
the business in the form of dividends and gains on sales of
Filers with gross income of $10,000 or less, as described dividend-bearing instruments. Interest income may also arise in
above, don't have to complete Schedule A, Parts III though X the ordinary course of a trade or business with respect to
(except as described above because certain entries must be installment sales and interest charges on accounts receivable.
made in those sections to populate lines in Parts I and II). This means that portfolio income may not be reduced by PALs or
However, refer to the applicable Parts of Schedule A when passive activity credits. For example, any portfolio income
completing Schedule A, Part I, column (A), and in determining earned by a trust described in section 501(a) that is UBTI (such
the deductible expenses to include on Schedule A, Part I, as unrelated debt-financed income) may not be offset by PALs
line 13, column (B). from an unrelated trade or business.
Section 469(k) provides that the passive activity limitations
Exceptions and Special Rules must be applied separately to items from each publicly traded
partnership (PTP). A PTP is a partnership whose interests are
Member income of mutual or cooperative electric compa- traded on an established securities market or are readily
nies. Income of a mutual or cooperative electric company tradable on a secondary market (or its substantial equivalent).
described in section 501(c)(12), which is treated as member PALs from a PTP may generally be used only to offset income or
income under subparagraph (H) of that section, is excluded from gain from passive activities of the same PTP. This means that a
UBTI. partner in a PTP may not use PALs and passive activity credits
from a PTP to offset income from other sources, including
Income from qualifying shipping activities. The
passive activity income from another PTP. Such PALs and
organization's gross income doesn’t include income from
passive activity credits aren't allowed for the tax year.
qualifying shipping activities (as defined in section 1356) if the
organization makes an election under section 1354 on a timely Generally, PALs are subject to other limitations (for example,
filed return (including extensions) to be taxed on its notional basis and at-risk limitations) before they are subject to the PAL
shipping income (as defined in section 1353) at the highest limitations. For example, the at-risk rules under section 465
corporate rate. If the election is made, the organization generally generally prohibit trusts and corporations that are affected
may not claim any loss, deduction, or credit with respect to tax-exempt organizations from claiming losses from activities in
qualifying shipping activities. An organization making this excess of the taxpayer’s amount at risk in the activity.
election may also elect to defer gain on the disposition of a An affected tax-exempt organization may need to attach
qualifying vessel under section 1359. Use Form 8902 to figure Form 6198 and either Form 8582 or Form 8810. For more
the tax. Include the alternative tax on Form 990-T, Part III, line 3. information on these rules, see Pub. 925, Passive Activity and
Passive loss and at-risk limitations. Under section 469, At-Risk Rules.
certain taxpayers, including certain tax-exempt organizations, How to report income received from a payment
may not deduct a passive activity loss (PAL). Such tax-exempt ! card and third-party network transaction. An
organizations (“affected tax-exempt organizations”) include a CAUTION organization that receives a Form 1099-K reporting a
trust (such as a trust described in section 501(c), a trust “gross amount” received from payment card and third-party
described in section 401(a), or an IRA), and a corporation if at network transactions in the tax year should report these amounts
any time during the last half of its tax year more than 50% in in the same manner as if the payments weren’t reported on a
value of the outstanding stock of the corporation is owned, Form 1099-K. There isn’t any one specific line on which to report
directly or indirectly, by or for not more than five organizations an amount from Form 1099-K; the correct line should be
that are private foundations under section 509(a) or are determined based on the nature of the payments. Some
described in section 401(a) or 501(c)(17) (for example, a stock payments received may constitute unrelated business income;
corporation described in section 501(c)(2) with a 401(a) parent see the instructions below to determine the appropriate line. For
or private foundation parent). instance, if some of the payments are sales income from an
A PAL occurs when total losses (including prior year unrelated business, then those payments would be reported on
unallowed losses) from all the organization’s passive activities Part I, line 1a. Retain Form 1099-K with your other records.
exceed the total income from all its passive activities. Generally,
passive activities include (1) trade or business activities in which Specific Instructions—Schedule A
the organization didn’t materially participate for the tax year; and
(2) rental activities, regardless of your participation. If the (Form 990-T)
organization has income or loss from a passive activity, several
lines on Form 990-T and Schedule A (Form 990-T) may be Items A Through E
affected by these rules.
Item A. Enter the same name as entered in the heading area of
PALs can’t be used to offset income from nonpassive Form 990-T.
activities. Passive activity income doesn’t include portfolio
income. Portfolio income (see Temporary Regulations section Item B. Enter the same EIN as entered in item D of Form 990-T.
1.469-2T(c)(3)) is income from a nonpassive activity. Portfolio

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Item C. On each Schedule A, enter the business activity code • The organization's average annual gross receipts for the 3
that best describes the organization's unrelated trade or prior tax years doesn’t exceed $27 million.
business reported on that Schedule A. Modernized e-File This provision doesn’t apply to any amount if interest is
requires a 6-digit numerical entry for item C. Unless you are required to be paid on the amount or if there is any penalty for
using a 6-digit non-NAICS business activity code, you should failure to timely pay the amount. See Regulations section
enter the 2 digits of the NAICS code in the first two positions and 1.448-3. Organizations that qualify to use the nonaccrual
then enter 4 zeros to complete the entry. For example, if the experience method should attach a statement showing total
2-digit business activity code 45 (for retail trade) best describes gross receipts, amounts not accrued as a result of the
your unrelated trade or business, enter “450000” in item C. See application of section 448(d)(5), and the net amount accrued.
Business Activity Codes, later, for more information about Enter the net amount on Schedule A, Part I, line 1a.
business activity codes.
Gain or loss on disposition of certain brownfield property.
Part I. Unrelated Trade or Business Gain or loss from the qualifying sale, exchange, or other
disposition of a qualifying brownfield property (as defined in
Income section 512(b)(19)(C)), which was acquired by the organization
after 2004, is excluded from unrelated business taxable income
Gross Receipts or Sales and is excepted from the debt-financed rules for such property.
See sections 512(b)(19) and 514(b)(1)(E).
Line 1a. Enter the gross receipts from an unrelated trade or
business regularly conducted that involves the sale of goods or Capital Gain Net Income
performance of services.
Line 4a. Generally, organizations required to file Form 990-T
A section 501(c)(7) social club would report its (except organizations described in sections 501(c)(7), (9), and
TIP restaurant and bar receipts from nonmembers on (17)) aren't taxed on the net gains from the sale, exchange, or
Schedule A, Part I, line 1, but would report its investment other disposition of property. However, net capital gains on
income on Schedule A, Part I, line 9, and on Schedule A, Part debt-financed property, capital gains on cutting timber, and
VII. ordinary gains on sections 1245, 1250, 1252, 1254, and 1255
property are taxed. See Form 4797, Sales of Business Property,
Advance payments. In general, advance payments are and its instructions for additional information.
reported in the year of receipt. To report income from long-term
contracts, see section 460. For rules that allow a limited deferral Also, any capital gain or loss passed through from an S
of advance payments beyond the current tax year, see section corporation or any gain or loss on the disposition of S
451(c). Also, see Regulations sections 1.451-8(c), (d), and (e). corporation stock by a qualified tax-exempt organization (see S
For applicability dates, see Regulations section 1.451-8(h). For Corporations, later) is taxed as a capital gain or loss and
information on adopting or changing to a permissible method for reported on Part I, line 4.
reporting advance payments for services and certain goods by Capital gains and losses should be reported by a trust on
an accrual method corporation, see the Instructions for Form Schedule D (Form 1041), Capital Gains and Losses, and by a
3115. Also, see Rev. Proc. 2021-34. corporation on Schedule D (Form 1120), Capital Gains and
Losses (and Form 8949, Sale and Other Dispositions of Capital
Installment sales. Generally, the installment method cannot be Assets). Schedule D of Form 1041 or Form 1120 (and Form
used for dealer dispositions of property. A “dealer disposition” is 8949, if applicable) must be attached to Form 990-T.
(a) any disposition of personal property by a person who
regularly sells or otherwise disposes of personal property of the If you deferred a capital gain into a QOF, you must attach
same type on the installment plan, or (b) any disposition of real Schedule D, Form 8949, and Form 8997 to your Form 990-T.
property held for sale to customers in the ordinary course of the You will need to annually file Form 8997 until you dispose of the
taxpayer's trade or business. investment. See the Instructions for Form 8997.
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
contractual obligation. To qualify for this treatment, the
For sales of time-shares and residential lots reported under organization must lend the securities under an agreement that
the installment method, the organization's income tax is requires:
increased by the interest payable under section 453(l)(3).
1. The return of identical securities;
Enter on Schedule A, Part I, line 1a and line 3, the gross profit
on collections from installment sales for any of the following. 2. The payment of amounts equivalent to the interest,
• 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
debt-financed property is the same percentage as the highest
Nonaccrual experience method. Accrual method acquisition indebtedness for the property for the 12-month
organizations aren't required to accrue certain amounts to be period before the date of disposition is to the average adjusted
received from the performance of services that, on the basis of basis of the property. The percentage may not be more than
their experience, won't be collected, if: 100%. See the instructions for Schedule A, Part V, line 5, to
• The services are in the field of health, law, engineering, determine adjusted basis and average adjusted basis.
architecture, accounting, actuarial science, performing arts, or
consulting; or

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If debt-financed property is depreciable or depletable Losses on the transfer of assets to a tax-exempt entity are
property, the provisions of sections 1245, 1250, 1252, 1254, and disallowed if part of a plan having a principal purpose of
1255 must be considered first. recognizing losses.
Example. On January 1, 2021, an exempt educational
corporation, using $288,000 of borrowed funds, purchased an Net Gain or (Loss)
office building for $608,000. The only adjustment to basis was Line 4b. Show gains and losses on other than capital assets on
$29,902 for depreciation (straight line method under MACRS Form 4797. Enter on this line the net gain or (loss) from Form
over the 39-year recovery period for nonresidential real 4797, Part II, line 17.
property). The corporation (section 501(c)(3) organization) sold
the building on December 31, 2022, for $640,000. At the date of An exempt organization using Form 4797 to report ordinary
sale, the adjusted basis of the building was $578,098 ($608,000 gain on sections 1245, 1250, 1252, 1254, and 1255 property will
− $29,902) and the indebtedness remained at $288,000. The include only depreciation, amortization, or depletion allowed or
adjusted basis of the property on the first day of the year of allowable in figuring UBTI or taxable income of the organization
disposition was $593,037. The average adjusted basis is (or a predecessor organization) for a period when it was not
$585,568 (($593,037 + $578,098) ÷ 2). The debt/basis exempt.
percentage is 49% ($288,000 ÷ $585,568).
Capital Loss Deduction for Trusts
The taxable gain is $30,332 (49% × ($640,000 − $578,098)).
This is a long-term capital gain. A corporation should enter the Line 4c. If a trust has a net capital loss, it is subject to the
gain on Schedule D (Form 1120), Part II, line 8. A trust should limitations of Schedule D (Form 1041). Enter on this line the loss
enter the gain on Schedule D (Form 1041), Part II, line 8, if figured on Schedule D (Form 1041).
applicable. In either scenario (a corporation or a trust), the
educational organization must attach a statement to Form 990-T, Income or (Loss) From a Partnership or an S
in addition to the Schedule D, showing how the gain was figured Corporation
along the lines described in this example, if the details weren’t
provided with the Schedule D. Line 5. See Regulations section 1.512(a)-6 for rules permitting
the aggregation of income (and directly connected deductions)
Disposition of property received from taxable subsidiary of certain partnership interests.
and used in unrelated business. A taxable 80%-owned Also, for trusts and certain corporations, there are limitations
subsidiary corporation of one or more tax-exempt entities is on income and losses (including from a partnership or an S
generally subject to tax on a distribution in liquidation of its corporation) under section 469 (the PAL and credit limitation
assets to its exempt parent (or parents). See section 337. The rules) and section 465 (at-risk limitations). For more information
assets are treated as if sold at FMV. on these rules, see the discussion of the application of the
“Tax-exempt entities” for this purpose include organizations passive activity loss and at-risk limitations to affected tax-exempt
described in sections 501(a), 529, 529A, and 115; charitable organizations in the introductory instructions under Part I.
remainder annuity trusts or unitrusts; U.S. (including states) and Unrelated Trade or Business Income, earlier.
foreign governments; Indian tribal governments and certain
corporations; international organizations; and similar Partnerships
non-taxable organizations. If the organization is a partner in a partnership conducting an
A taxable corporation that transfers substantially all of its unrelated trade or business, enter the organization's share
assets to a tax-exempt entity in a transaction that otherwise (whether or not distributed) of the partnership's income or loss
qualifies for nonrecognition treatment must recognize gain on from the unrelated trade or business. The organization is
the transaction as if it sold the assets at FMV. However, such a required to notify the partnership of its tax-exempt status. Figure
transfer isn't taxable if it qualifies as a like-kind exchange under the gross income and deductions of the partnership in the same
section 1031 or an involuntary conversion under section 1033. In way you figure unrelated trade or business income the
such a case, the built-in appreciation is preserved in the organization earns directly.
replacement property received in the transaction. A “taxable
corporation” is any corporation that isn't a tax-exempt entity as Attach a statement to this return showing the organization's
defined above, including an S corporation. share of the partnership's gross income from the unrelated trade
or business, and its share of the partnership deductions directly
A corporation that changes status from taxable to tax-exempt connected with the unrelated gross income.
is generally treated as if it transferred all of its assets to a
tax-exempt entity immediately before the change in status (thus S Corporations
subjecting it to the tax on a deemed sale for FMV). This rule
doesn’t apply where the taxable corporation becomes exempt Qualified tax-exempt organizations can be shareholders in an S
within 3 years of formation (within 7 years of formation for corporation without the S corporation losing its status as an S
section 501(c)(7) organizations), or had previously been exempt corporation. Qualified tax-exempt organizations that hold stock
and within several years (generally a period of 3 years) regains in an S corporation treat their stock interest as an interest in an
exemption, unless the principal purpose of the transactions is to unrelated trade or business. All items of income, loss, or
avoid the tax on the change in status. deduction that the organization receives as a shareholder of the
S corporation are taken into account in Schedule A, Part I, line 5,
In the transactions described above, the taxable event is in figuring UBTI and not reported on another line of Schedule A
deferred for property that the tax-exempt entity immediately uses (Form 990-T) that otherwise would apply, except capital gains
in an unrelated business. If the tax-exempt parent later disposes and losses, which are reported on Schedule A, Part I, line 4.
of the property, then any gain (not in excess of the amount not Report on Schedule A, Part I, line 4, any gain or loss on the
recognized) is included in the parent’s UBTI. If there is partial disposition of S corporation stock.
use of the assets in unrelated business, then there is partial
recognition of gain or loss with respect to the assets not so used. Qualified tax-exempts. A qualified tax-exempt is an
Property is treated as disposed if the tax-exempt entity no longer organization that is described in section 401(a) (qualified stock
uses it in an unrelated business. bonus, pension, and profit-sharing plans) or 501(c)(3) and
exempt from tax under section 501(a).

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Exception. Employee stock ownership plans (ESOPs) don't the tax year that includes the last day of the calendar quarter
follow these S corporation rules if the S corporation stock is an with respect to which the credit is allowed.
employer security as defined in section 409(l).
Note. A credit is available only if the leave was taken sometime
Attach a statement to this return showing the qualified after March 31, 2020 and before October 1, 2021, and only after
tax-exempt's share of all items of income, loss, or deduction. the qualified leave wages were paid, which might under certain
Combine the income, loss, and deductions (except for the circumstances not occur until a quarter after September 30,
capital gains and losses) on the statement. If you hold stock in 2021, including quarters during 2022. Accordingly, all lines
more than one S corporation, total the combined amounts. Show related to qualified sick and family leave wages remain on the
capital gains and losses separately and include them on employment tax returns for 2022.
Schedule A, Part I, line 4a.
Organizations described in section 501(c)(19). Enter the
Rent Income net income from an insurance business that was not properly set
aside. These organizations may set aside income from
Line 6. Enter the amount computed on Part IV, line 3, on Part I, payments received for life, sickness, accident, or health
line 6, column (A). Enter the amount computed on Part IV, line 5, insurance for members of the organization or their dependents.
on Part I, line 6, column (B).
1. To provide for the payment of insurance benefits.
Unrelated Debt-Financed Income 2. For a purpose specified in section 170(c)(4) (religious,
charitable, scientific, literary, educational, etc.).
Line 7. Enter the amount computed on Part V, line 8, on Part I,
line 7, column (A). Enter the amount computed on Part V, 3. For administrative costs directly connected with benefits
line 10, on Part I, line 7, column (B). described in (1) and (2) above.
Amounts set aside and used for purposes other than those in
Interest, Annuities, Royalties, and Rents From a (1), (2), or (3) above must be included in UBTI for the tax year if
Controlled Organization they were previously excluded from taxable income.
Line 8. Enter the sum of columns 5 and 10 from Part VI on Part Any amount spent for a purpose described in section 170(c)
I, line 8, column (A). Enter the sum of columns 6 and 11 from (4) is first considered paid from funds earned by the organization
Part VI on Part I, line 8, column (B). from insurance activities if the income isn't used for the
insurance activities.
Investment Income of a Section 501(c)(7), (9), or Expenditures for lobbying aren't considered section 170(c)(4)
(17) Organization expenses.
Line 9. Enter the sum of amounts from Part VII, column 2, on Income from property financed with qualified 501(c)(3)
Part I, line 9, column (A). Enter the sum of amounts in Part VII, bonds. If any part of the property is used in a trade or business
column 5, on Part I, line 9, column (B). of any person other than a section 501(c)(3) organization or a
governmental unit, and such use isn't consistent with the
Exploited Exempt Activity Income, Other Than requirement for qualified 501(c)(3) bonds under section 145, the
section 501(c)(3) organization is considered to have received
Advertising Income unrelated business income in the amount of the greater of the
Line 10. Enter the amount computed on Part VIII, line 2, on actual rental income or the fair rental value of the property for the
Part I, line 10, column (A). Enter the amount computed on Part period it is used. No deduction is allowed for interest on the
VIII, line 3, on Part I, line 10, column (B). private activity bond. Report the greater of the actual rent or the
fair rental value on Schedule A, Part I, line 12. Report allowable
Advertising Income deductions on Schedule A, Part II. See sections 150(b)(3) and
(c).
Line 11. Enter the amount computed on Part IX, line 2, on Part
I, line 11, column (A). Enter the amount computed on Part IX, PFIC shareholders. If the organization is a direct or indirect
line 3, on Part I, line 11, column (B). shareholder of a PFIC within the meaning of section 1297, it may
have income tax consequences under section 1291 upon the
Other Income disposition of the PFIC stock or on the receipt of an excess
distribution from the PFIC, described in section 1291(a). The
Line 12. Enter on Part I, line 12, any item of unrelated business organization may have current income under section 1293 if the
income from a particular trade or business that isn't reportable PFIC is a QEF with respect to the organization. The organization
elsewhere on the return. Attach a statement describing the may also have current income under section 1296 if it makes a
sources of the other income and their amounts. Such amounts section 1296 mark-to-market election with respect to the PFIC
may include: stock.
• Recoveries of bad debts deducted in earlier years under the Include on Schedule A, Part I, line 12, the portion of an
specific charge-off method; excess distribution (or gain treated as an excess distribution),
• The amount from Form 6478, Biofuel Producer Credit (if section 1293 inclusion, or section 1296 inclusion that is taxable
applicable); as UBTI. See Form 8621.
• The amount from Form 8864, Biodiesel, Renewable Diesel, or
Sustainable Aviation Fuels Credit (if applicable); and See the instructions for Form 990-T, Part II, line 4, for
• Proceeds received from employer-owned life insurance reporting the deferred tax amount that may be owed by the
contracts issued after August 17, 2006 (complete and attach organization with respect to an excess distribution (or gain
Form 8925); and treated as an excess distribution).
• The amount of payroll tax credit taken by an employer on its
2022 employment tax returns (Forms 941, 943, and 944) for Line 13. Total Unrelated Trade or Business
qualified paid sick and qualified paid family leave under the Income
FFCRA and the ARP (both the nonrefundable and refundable Use the amount from Schedule A, Part I, line 13, column (C), in
portions). These amounts must be included in gross income for the computation of UBTI in Part II.

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Part II. Deductions Not Taken                                           Preference Items

Elsewhere                                                               Corporations may be required to adjust deductions for depletion 
If the aggregate sum of the amounts on all Schedules A (Form            of iron ore and coal, intangible drilling and exploration and 
990-T), Part I, line 13, column (A), is $10,000 or less, you don't      development costs, and the amortizable basis of pollution 
have to complete Schedule A, Part II, lines 1 through 14.               control facilities. See section 291 to determine the amount of the 
However, you must complete the remainder of Schedule A, Part            adjustment.
II and include the larger of each total from Schedule A, Part II, 
line 18, or zero, in the computation of the amount reported on          Section 263A Uniform Capitalization Rules
Part I, line 1, of Form 990-T.
Note. Only expenses directly connected with the unrelated               These rules require organizations to capitalize or include as 
trade or business income reported on the Schedule A for that            inventory cost certain costs incurred in connection with the 
particular unrelated trade or business may be deducted on that          following.
Schedule A (see Directly connected expenses in Appendix A).             • The production of real property and tangible personal property 
Don't separately include in Schedule A, Part II, any expenses           held in inventory or held for sale in the ordinary course of 
that are reported in Schedule A, Parts III through IX, other than       business.
excess exempt expenses entered on Schedule A, Part II, line 12,         • Real property or personal property held in inventory (tangible 
and excess readership costs entered on Schedule A, Part II,             and intangible) acquired for resale.
line 13. For example, officers' compensation allocable to               • The production of real property and tangible personal property 
advertising income is reported on Schedule A, Part IX, only and         produced by the organization for use in its trade or business or in 
shouldn’t be included on Schedule A, Part X, or Schedule A, Part        an activity engaged in for profit.
II, line 1.
                                                                          Tangible personal property produced by an organization 
Limitations on Deductions                                               includes a film, sound recording, videotape, book, or similar 
                                                                        property.
The following items discuss certain areas in which the deduction 
may be limited.                                                         Indirect expenses.  Organizations subject to the section 263A 
                                                                        uniform capitalization rules are required to capitalize direct costs 
                                                                        and an allocable part of most indirect costs (including taxes) that 
Activities Lacking a Profit Motive                                      benefit the assets produced or acquired for resale or are 
In some instances, it is necessary to report income whether or          incurred by reason of the performance of production or resale 
not it comes from a trade or business (including interest,              activities.
annuities, royalties, and rents from controlled organizations, and        For inventory, some of the indirect expenses that must be 
income of a section 501(c)(7), (9), or (17) organization other          capitalized are:
than exempt function income). If income is attributable to an           • Administration expenses;
activity lacking a profit motive, then a net loss from the activity     • Taxes;
can’t be claimed on Form 990-T. Therefore, in Part I, column (B),       • Depreciation;
and Part II, the total of deductions for expenses directly              • Insurance;
connected with income from an activity lacking a profit motive is       • Compensation paid to officers attributable to services;
limited to the amount of that income. Generally, an activity            • Rework labor; and
lacking a profit motive is one that isn't conducted for the purpose     • Contributions to pension, stock bonus, and certain 
of producing a profit or one that has consistently produced             profit-sharing, annuity, or deferred compensation plans.
losses when both direct and indirect expenses are taken into              Regulations section 1.263A-1(e)(3) specifies other indirect 
account.                                                                costs that relate to production or resale activities that must be 
                                                                        capitalized and those that may be currently deductible.
Deductions Related to Property Leased to                                Interest expense. Interest expense paid or incurred during the 
Tax-Exempt Entities                                                     production period of designated property must be capitalized 
                                                                        and is governed by special rules. See Regulations section 
For property leased to a governmental or other tax-exempt               1.263A-8 through 1.263A-15.
entity, or in the case of property acquired after March 12, 2004, 
                                                                        When are section 263A capitalized costs deductible?           The 
that is treated as tax-exempt-use property other than by reason 
                                                                        costs required to be capitalized under section 263A aren't 
of a lease, the organization may not claim deductions related to 
                                                                        deductible until the property (to which the costs relate) is sold, 
the property when they exceed the organization's income from 
                                                                        used, or otherwise disposed of by the organization.
the lease payments. Amounts disallowed may be carried over to 
the next year and treated as a deduction concerning the                   Exceptions.   Section 263A doesn’t apply to:
property. See section 470.                                              • Personal property acquired for resale if the organization's 
                                                                        average annual gross receipts for the 3 prior tax years were $10 
                                                                        million or less;
Transactions Between Related Taxpayers                                  • Timber;
                                                                        • Most property produced under long-term contract;
Generally, an accrual basis taxpayer may deduct business                • Certain property produced in a farming business;
expenses and interest owed to a related party only in the year          • Research and experimental costs under section 174;
the payment is included in the income of the related party. See         • Geological and geophysical costs amortized under section 
sections 163(e)(3) and 267 for limitations on deductions for            167(h);
unpaid interest and expenses.                                           • Intangible drilling costs for oil, gas, and geothermal property;
                                                                        • Mining exploration and development costs; and
                                                                        • Inventory of an organization that accounts for inventories in 
                                                                        the same manner as materials and supplies that aren't 
                                                                        incidental. See Schedule A, Part III, Cost of Goods Sold, later.
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See Regulations sections 1.263A-1 through 1.263A-3. Form 1099-NEC for an independent contractor and if the total
amount of such compensation isn't unreasonable.
Travel, Meals, and Entertainment
Subject to the limitations and restrictions discussed below, an Reducing Certain Expenses for Which Credits
organization can deduct ordinary and necessary travel, meals, Are Allowable
and non-entertainment expenses paid or incurred in its trade or If the organization claims certain credits, it may need to reduce
business. Generally, entertainment expenses, membership the otherwise allowable deductions for expenses used to figure
dues, and facilities used in connection with these activities can’t the credit. This applies to credits such as the following.
be deducted. In addition, no deduction is generally allowed for • Disabled access credit.
qualified transportation fringe benefits. Special rules apply to • Employer credit for social security and Medicare taxes paid
deductions for gifts, luxury water travel, and convention on certain employee tips.
expenses. See section 274 and Pub. 463, Travel, Gift, and Car • Credit for employer-provided childcare facilities and services.
Expenses. • Orphan drug credit.
Qualified transportation fringes (QTFs). Generally, no • Credit for small employer pension plan startup costs.
deduction is allowed under section 274(a)(4) for QTFs provided • Mine rescue team training credit.
by employers to their employees. QTFs are defined in section • Employer credit for paid family and medical leave.
132(f)(1) and include:
• Transportation in a commuter highway vehicle between the If the organization has any of these credits, figure each
employee's residence and place of employment, current-year credit before figuring the deduction for expenses on
• Any transit pass, and which the credit is based.
• Qualified parking.
Business Startup and Organizational Costs
See section 274, Pub. 15-B, and Pub. 535 for details.
For business startup and organizational costs paid or incurred
Travel. The organization can’t deduct travel expenses of any after September 8, 2008, an organization can deduct up to
individual accompanying an organization's officer or employee, $5,000 of such costs in the year it begins business (unless the
including a spouse or dependent of the officer or employee, organization elects to capitalize the full amount of such costs).
unless: The $5,000 deduction is reduced (but not below zero) by the
• That individual is an employee of the organization, and amount the total costs exceed $50,000. If the total costs are
• Their travel is for a bona fide business purpose and would $55,000 or more, the deduction is reduced to zero. Any costs not
otherwise be deductible by that individual. deducted must be amortized, as explained below.
Meals. Generally, the organization can deduct only 50% of the
Note. For startup and organizational costs paid or incurred after
amount otherwise allowable for non-entertainment-related meal
September 8, 2008, the organization isn't required to attach a
expenses paid or incurred in an unrelated trade or business. The
statement or specifically identify the amount deducted for the
Taxpayer Certainty and Disaster Tax Relief Act of 2020
election under sections 195(b) and 248(a) to be effective. It is a
amended section 274(n)(2) to provide an exception from the
deemed election. Whether an organization deducts a portion of
general rule. For business meal expenses paid or incurred after
its startup and organizational costs under Regulations sections
December 31, 2020, and before January 1, 2023, the
1.195-1 and 1.248-1 or elects to amortize the full amount of such
organization is allowed a deduction of 100% of business meal
costs, its election is irrevocable. For startup and organizational
expenses for food and beverages provided by a restaurant. See
costs paid or incurred after October 22, 2004, and before
Notice 2021-25, 2021-17 I.R.B. 1118, and Notice 2021-63,
September 9, 2008, an organization must generally attach the
2021-49 I.R.B. 835. Meals not separately stated from
statement required by Regulations sections 1.195-1(b) and
entertainment are generally not deductible. In addition (subject
1.248-1(c) to make the election to deduct a portion of such costs
to exceptions under section 274(k)(2)):
(as explained above). This election is irrevocable. However, an
• Meals mustn’t be lavish or extravagant, and
organization can apply the provisions of these regulations to
• An employee of the organization must be present at the meal.
costs paid or incurred after October 22, 2004.
Membership dues. The organization can deduct amounts paid
Amortization. Any costs not deducted under the above rules
or incurred for membership dues in civic or public service
must be amortized ratably over the 180-month period, beginning
organizations, professional organizations (such as bar and
with the month the organization begins business. See the
medical associations), business leagues, trade associations,
Instructions for Form 4562, Depreciation and Amortization, for
chambers of commerce, boards of trade, and real estate boards.
details. If the association elected to amortize business startup
However, no deduction is allowed if a principal purpose of the
and organizational costs paid or incurred before October 23,
organization is to entertain or provide entertainment facilities for
2004, over a period of 60 months or more, it must continue to
members or their guests. In addition, organizations can’t deduct
amortize those costs over the elected amortization period.
membership dues in any club organized for business, pleasure,
Report the deductible amount of these costs and any
recreation, or other social purpose. This includes country clubs,
amortization on Schedule A, Part II, line 14. For amortization that
golf and athletic clubs, airline and hotel clubs, and clubs
began during the tax year, complete and attach Form 4562.
operated to provide meals under conditions favorable to
business discussion.
Repairs and Maintenance
Entertainment facilities. The organization can’t deduct an
expense paid or incurred for use of a facility (such as a yacht or Line 3. Enter the cost of incidental repairs and maintenance not
hunting lodge) for an activity usually considered entertainment, claimed elsewhere on the return, such as labor and supplies,
amusement, or recreation. that don't add to the value or appreciably prolong the life of the
property.
Amounts treated as compensation. The organization may
generally be able to deduct otherwise non-deductible travel, Bad Debts
meals, and entertainment expenses if the amounts are treated
as compensation and reported on Form W-2 for an employee or Line 4. Enter the total receivables from an unrelated trade or
business that were previously included in taxable income and
that became worthless in whole or in part during the tax year.

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Interest • Foreign or U.S. possession income taxes if a foreign tax credit
is claimed.
Line 5. Attach a separate statement listing the interest being • Taxes not imposed on your organization.
claimed on this line. • Taxes, including state or local sales taxes, paid or incurred in
Interest allocation. If the proceeds of a loan were used for connection with an acquisition or disposition of property. These
more than one purpose (for example, to purchase a portfolio taxes must be treated as part of the cost of the acquired property
investment and to acquire an interest in a passive activity), an or, in the case of a disposition, as a reduction in the amount
interest allocation must be made. See Temporary Regulations realized on the disposition.
section 1.163-8T for the interest allocation rules. • Taxes assessed against local benefits that increase the value
of the property assessed (such as for paving, etc.).
Tax-exempt interest. Don't include interest on indebtedness • Taxes deducted elsewhere on the return, such as those
incurred or continued to purchase or carry obligations on which reflected in cost of goods sold.
the interest income is totally exempt from income tax. For Enter taxes and license fees paid or accrued during the year,
exceptions, see section 265(b). but don't include the following taxes.
Prepaid interest. Generally, a cash basis taxpayer can’t • Federal income taxes.
deduct prepaid interest allocable to years following the current • Foreign or U.S. possession income taxes if a foreign tax credit
tax year, for example, during the tax year a cash basis taxpayer is claimed.
prepaid interest on a loan. The taxpayer can deduct only that • Taxes not imposed on your organization.
part of the prepaid interest that was for the use of the loaned • Taxes, including state or local sales taxes, paid or incurred in
funds during the tax year, not for the use of the loaned funds connection with an acquisition or disposition of property. These
during the subsequent years. taxes must be treated as part of the cost of the acquired property
or, in the case of a disposition, as a reduction in the amount
Straddle interest. Generally, the interest and carrying charges realized on the disposition.
on straddles can’t be deducted and must be capitalized. See • Taxes assessed against local benefits that increase the value
section 263(g). of the property assessed (such as for paving, etc.).
Original issue discount. See section 163(e)(5) for special • Taxes deducted elsewhere on the return, such as those
rules for the disqualified portion of original issue discount on a reflected in cost of goods sold.
high-yield discount obligation. See section 164(d) for apportionment of taxes on real
Interest on certain underpayments of tax. Don't deduct property between the buyer and seller.
interest paid or incurred on any portion of an underpayment of Do not reduce the corporation’s deduction for social
tax that is attributable to an understatement arising from an ! security and Medicare taxes by the amount claimed on
undisclosed listed transaction or an undisclosed reportable CAUTION its employment tax and refundable portions of the
avoidance transaction (other than a listed transaction) entered FFCRA and ARP credits for qualified sick and family leave
into in tax years beginning after October 22, 2004. wages. Instead, report this amount as income on line10.
Interest allocable to the production of designated property.
Don't deduct interest on debt allocable to the production of Depreciation
designated property. Interest that is allocable to such property
produced by an organization for its own use or for sale must be Line 7. Besides depreciation, include on line 7 the part of the
capitalized. An organization must also capitalize any interest on cost, under section 179, that the organization elected to expense
debt allocable to an asset used to produce the earlier property. for certain tangible property placed in service during the tax year
See section 263A(f) and Regulations sections 1.263A-8 through or carried over from the prior tax year. See Form 4562 and its
1.263A-15. instructions.

Interest on below-market loans. See section 7872 for special Depletion
rules regarding the deductibility of foregone interest on certain
below-market-rate loans. Line 9. See sections 613 and 613A for percentage depletion
rates for natural deposits. Attach Form T (Timber), Forest
Limitation on deduction of business interest. Business Activities Schedules, if a deduction is taken for depletion of
interest expense is limited to the sum of business interest timber.
income, 30% of the adjusted taxable income, and floor plan
financing interest. Business interest expense includes any Contributions to Deferred Compensation Plans
interest paid or accrued on indebtedness properly allocable to
an unrelated trade or business. A taxpayer, other than a tax Line 10. Employers who maintain pension, profit-sharing, or
shelter, that meets the gross receipts test isn’t required to limit other funded deferred compensation plans are generally
business interest expense under section 163(j). A taxpayer required to file Form 5500. This requirement applies whether or
meets the gross receipts test if the taxpayer has average annual not the plan is qualified under the Code and whether or not a
gross receipts that are taken into account in determining its UBTI deduction is claimed for the current tax year. Section 6652(e)
of $27 million or less for the 3 prior tax years. Gross receipts imposes a penalty for late filing of these forms. In addition, there
include the aggregate gross receipts from all persons treated as is a penalty for overstating the pension plan deduction. See
a single employer such as a controlled group of corporations, section 6662(f).
commonly controlled partnerships or proprietorships, and
affiliated service groups. If the taxpayer fails to meet the gross Employee Benefit Programs
receipts test, Form 8990 is generally required.
Line 11. Enter the amount of contributions to employee benefit
Taxes and Licenses programs (such as insurance, health, and welfare programs) that
aren't an incidental part of a deferred compensation plan
Line 6. Enter taxes and license fees paid or accrued during the included on Schedule A, Part II, line 10.
year, but don't include the following taxes.
• Federal income taxes.

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Excess Exempt Expenses Regulations section 1.512(a)-6(h). Attach a statement showing
the computation of the NOL deduction.
Line 12. Enter the amount computed on Part VIII, line 7 (if
applicable), on Part II, line 12. Unrelated Business Taxable Income
Excess Readership Costs Line 18. Use the greater of the amount computed on line 18 or
zero in the computation of UBTI on Part I, line 1, of Form 990-T.
Line 13. Enter the amount computed on Part IX, line 8a (if A net loss calculated on any Schedule A, Part II, line 18, can’t be
applicable), on Part II, line 13. used to offset gain on any other Schedule A. Accordingly, a net
loss on a Schedule A should be treated as zero to calculate the
Other Deductions amount reported on Part I, line 1, of Form 990-T
Line 14. Enter on this line the deduction taken for amortization
(see Form 4562) as well as other authorized deductions for Part III. Cost of Goods Sold
which no space is provided on the return. Attach a statement Generally, inventories are required at the beginning and end of
listing the deductions claimed on this line. On each Schedule A, each tax year if the production, purchase, or sale of
deduct only items directly connected with the unrelated trade or merchandise is an income-producing factor. See Regulations
business for which income is reported on that Schedule A. section 1.471-1.
Extraterritorial income exclusion. Complete Form 8873 and However, if the organization is a qualifying taxpayer or a
include the deduction from line 52 in other deductions reported qualifying small business taxpayer, it may adopt or change its
on Part II, line 14. accounting method to account for inventoriable items in the
Don't deduct fines or penalties paid to a government for same manner as materials and supplies that aren't incidental
violating any law. The exclusion was repealed generally for (unless its business is a tax shelter (as defined in section 448(d)
transactions after 2004, with some exceptions. See Form 8873 (3)).
and its instructions. A qualifying taxpayer is a taxpayer that, for each prior tax year
ending after December 16, 1998, has average annual gross
Net Operating Loss (NOL) Deduction Arising in receipts of $1 million or less for the 3-tax-year period ending with
Tax Years Beginning On or After January 1, that prior tax year.
2018 A qualifying small business taxpayer is a taxpayer (a) that has
Line 17. The NOL deduction is the NOL carryover and average annual gross receipts of $27 million or less for the
carrybacks that can be deducted in the tax year with regard to 3-tax-year period ending with that prior tax year, and (b) whose
each separate trade or business. To be deductible, an NOL principal business activity isn't an ineligible activity.
must have been incurred in an unrelated trade or business
activity. See section 172(a). Under this accounting method, inventory cost for raw
materials purchased for use in producing finished goods and
Tax Cuts and Jobs Act amendments to section 172. merchandise purchased for resale are deductible in the year the
Section 13302 of the Tax Cuts and Jobs Act amended section finished goods or merchandise are sold (but not before the year
172 for tax years ending after 2017 to eliminate NOL carrybacks the organization paid for the raw materials or merchandise, if it is
except for certain farming losses and NOLs of insurance also using the cash method). For additional guidance on this
companies other than life insurance companies. See section method of accounting for inventoriable items, see Pub. 538 and
172(b), as amended by the Tax Cuts and Jobs Act. Also see the Instructions for Form 3115.
Pub. 225, Farmer’s Tax Guide; Pub. 536, Net Operating Losses
for Individuals, Estates, and Trusts; and Pub. 542, Corporations, Enter amounts paid for all raw materials and merchandise
for additional information. The Tax Cuts and Jobs Act also during the tax year on line 2. The amount the organization can
amended section 172(a)(2) to limit the allowable NOL deduction deduct for the tax year is figured on Schedule A, Part III, line 8.
to 80% of taxable income (calculated as described in section All filers not using the cash method of accounting should see
172(a)(2)). Section 263A Uniform Capitalization Rules under Limitations on
Instructions for line 17. Enter on Schedule A, Part II, line 17, Deductions, earlier, before completing Schedule A. The
the NOL carryover from other tax years attributable to that trade instructions for lines 1, 4, 5, and 7, later, applies to Part III earlier,
or business, but don't enter more than the amount shown on before completing Schedule A.
Schedule A, Part II, line 16. An organization that claims the Inventory valuation methods. Inventories can be valued at:
deduction with respect to any NOL carried through tax years for
which the organization was not required to file Form 990-T must 1. Cost as described in Regulations section 1.471-3,
show the amount of the deduction and how it was computed, but 2. Lower of cost or market as described in Regulations
the organization need not file a Form 990-T in order to preserve section 1.471-4, or
an NOL carryover. See Regulations section 1.512(a)-6(h)(3) for 3. Any other method approved by the IRS that conforms to
treatment of suspended NOLs resulting from the termination, the requirements of the applicable regulations cited below.
sale, exchange, or other disposition of a separate unrelated
trade or business. After offsetting any gain resulting from the However, if the organization is using the cash method of
termination, sale, exchange, or disposition of a separate accounting, it is required to use cost.
unrelated trade or business, any NOL remaining is suspended. A small producer is an organization whose average annual
However, the suspended NOLs may be used if that previous gross receipts are $1 million or less. Small producers that
separate unrelated trade or business is later resumed or if a new account for inventories in the same manner as materials and
unrelated trade or business that is accurately identified using the supplies that aren't incidental may currently deduct expenditures
same NAICS 2-digit code as the previous separate unrelated for direct labor and all indirect costs that would otherwise be
trade or business is commenced or acquired in a future tax year. included in inventory costs.
The amount of an NOL carryover is determined under section The average cost (rolling average) method of valuing
172. See Regulations section 1.512(b)-1(e) and, for inventories generally doesn’t conform to the requirement of the
organizations with more than one unrelated trade or business, regulations. See Rev. Rul. 71-234, 1971-1 C.B. 148.

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Organizations that use erroneous valuation methods must
change to a method permitted for federal income tax purposes. Part IV. Rent Income
File Form 3115 to make this change. Section 501(c)(7), (9), and (17) organizations, enter gross rents
on Schedule A, Part I, line 6, and applicable expenses on
Inventory may be valued below cost when the merchandise is Schedule A, Part II, lines 1 through 14. All rents except those
unsalable at normal prices or unusable in the normal way that are exempt function income must be included.
because the goods are subnormal because of damage,
imperfections, shop wear, etc., within the meaning of All organizations that have applicable rent income, other than
Regulations section 1.471-2(c). The goods may be valued at the section 501(c)(7), (9), and (17) organizations, should complete
bona fide selling price, minus direct cost of disposition (but not Schedule A, Part IV. For organizations other than section 501(c)
less than scrap value). Bona fide selling price means actual (7), (9), and (17) organizations, only the following rents are
offering of goods during a period ending not later than 30 days taxable on Schedule A, Part I, line 6.
after inventory date. 1. Rents from personal property leased with real property, if
If this is the first year the Last-in First-out (LIFO) inventory the rents from the personal property are more than 10% of the
method was either adopted or extended to inventory goods not total rents received or accrued under the lease, determined at
previously valued under the LIFO method provided in section the time the personal property is placed in service.
472, attach Form 970, Application To Use LIFO Inventory 2. Rents from real and personal property if:
Method, or a statement with the information required by Form
970. a. More than 50% of the total rents received or accrued
under the lease are for personal property, or
If the organization changed or extended its inventory method
to LIFO and had to write up the opening inventory to cost in the b. The amount of the rent depends on the income or profits
year of election, report the effect of this write-up as other income derived by any person from the property leased (except an
(Part I, line 12) proportionately over a 3-year period that begins amount based on a fixed percentage of receipts or sales).
in the tax year the LIFO election was made (section 472(d)). A redetermination of the percentage of rent for personal
Line 1. If the organization is changing its method of accounting property is required when either:
to no longer account for inventories, it must refigure last year's 1. There is an increase of 100% or more by the placing of
closing inventory using the new method of accounting and enter additional or substitute personal property in service, or
the result on line 1. If there is a difference between last year's 2. There is a modification of the lease that changes the rent
closing inventory and the refigured amount, attach an charged. Rents from both real and personal property not taxable
explanation and take it into account when figuring the on Schedule A, Part I, line 6, may be taxable on Schedule A,
organization's section 481(a) adjustment (explained earlier). Part I, line 8, if the income is from a controlled organization or on
Line 4. An entry is required on this line only for organizations Schedule A, Part I, line 7, if the property is debt-financed.
that have elected a simplified method of accounting. Taxability of the rent must be considered in the following order.
For organizations that have elected the simplified production a. Rents not taxed on Schedule A, Part I, line 6 may be
method, additional section 263A costs are generally those costs, taxed on Schedule A, Part I, line 8.
other than interest, that are now required to be capitalized under b. Rents not taxed on Schedule A, Part I, line 6 or line 8,
section 263A but that weren’t capitalized under the may be taxed on Schedule A, Part I, line 7.
organization's method of accounting immediately prior to the
effective date of section 263A. For details, see Regulations Rents from personal property not leased with real property
section 1.263A-2(b). should be reported on Schedule A, Part I, line 12.
For organizations that have elected the simplified resale See Form 8582 (for trusts) or Form 8810 (for corporations)
method, additional section 263A costs are generally those costs and section 469 for limitations on losses from rental activities.
incurred with respect to the following categories.
• Off-site storage or warehousing. Description of Property
• Purchasing. Line 1. Check the box next to the property description if the
• Handling, such as processing, assembling, repackaging, and property is used both to carry on exempt activities and to
transporting. conduct unrelated trade or business activities.
• General and administrative costs (mixed service costs).
For details, see Regulations section 1.263A-3(d). Line 4. For each property, attach a statement describing the
directly connected deductions and their amounts.
Enter on Schedule A, Part III, line 4, the balance of section
263A costs paid or incurred during the tax year not included on Part V. Unrelated Debt-Financed
Schedule A, Part III, lines 2 and 3.
Income
Line 5. Enter on Schedule A, Part III, line 5, any costs paid or
incurred during the tax year not entered on Schedule A, Part III, Use Schedule A, Part V, to compute unrelated debt-financed
lines 2 through 4. Attach a statement describing the other costs. income described in sections 512(b)(4) and 514 from
debt-financed property only to the extent that the income doesn’t
Line 7 See Regulations sections 1.263A-1 through 1.263A-3 for constitute income from the conduct of an unrelated trade or
details on figuring the amount of additional section 263A costs to business and isn't specifically taxable under other provisions of
be included in ending inventory. the Code, such as taxable rents from personal property leased
If the organization accounts for inventories in the same with real property reportable on Schedule A, Part IV (and
manner as materials and supplies that aren't incidental, enter on Schedule A, Part I, line 6), or taxable interest, annuities,
Schedule A, Part III, line 7, the portion of its raw materials and royalties, and rents from a controlled entity reportable on
merchandise purchased for resale that are included on Schedule A, Part VI (and Schedule A, Part I, line 8). See
Schedule A, Part III, line 6, and weren’t sold during the year. Regulations section 1.514(b)-1(b)(2). Refer to Regulations
section 1.512(a)-6 when reporting income from one or more
debt-financed properties and also for rules permitting the
aggregation of unrelated debt-financed income with other UBTI
in certain circumstances. Gain or loss from the sale or
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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
and other purposes, the organization must allocate the basis, business for $20,000. To complete Schedule A, Part V for this
debt, income, and deductions among the purposes for which the example, enter $20,000 on Schedule A, Part V, line 2; $1,000
property is held. Don't include on Schedule A, Part V amounts and $5,000 on Schedule A, Part V, lines 3(a) and 3(b),
allocated to exempt purposes. respectively (since the entire amount is for debt-financed
For section 514 purposes, don't treat an interest in a property); $6,000 and $10,000 on Schedule A, Part V, lines 4
and 5 (since the entire amount is for debt-financed property);
! qualified state tuition program (QSTP) as debt. 60% on Schedule A, Part V, line 6; $12,000 on Schedule A, Part
CAUTION However, a QSTP's investment income is treated as
debt-financed income if the QSTP incurs indebtedness when V, line 7; and $3,600 on Schedule A, Part V, line 9.
acquiring or improving income-producing property. Line 1. Enter the address of the debt-financed property. If the
debt-financed property isn’t real property, enter the address
A property held to produce income is debt-financed property where the property is located and describe the property in Part
if at any time during the tax year there was acquisition XI, Supplemental Information.
indebtedness outstanding for the property. When a property held
for the production of income by an organization is disposed of at Check the box next to the property description if the property
a gain during the tax year, and there was acquisition is used both to carry on exempt activities and to conduct
indebtedness outstanding for that property at any time during the unrelated trade or business activities.
12-month period before the date of disposition, the property is Line 2. Enter the gross income from debt financed property,
debt-financed property. Securities purchased on margin are excluding income otherwise included in UBTI. For example,
considered debt-financed property if the liability incurred in don't include rents from personal property shown on Schedule A,
purchasing them remains outstanding. Part IV, or rents and interest from controlled organizations
Acquisition indebtedness is the outstanding amount of shown on Schedule A, Part VI.
principal debt incurred by the organization to acquire or improve Line 3. For amounts shown on line 3a, attach a statement
the property. Acquisition indebtedness also includes showing, for each property:
indebtedness incurred: 1. The cost or salvage value,
1. Before the property was acquired or improved, if the 2. The year acquired,
indebtedness would not have been incurred but for such
acquisition or improvement of the property; or 3. The property’s useful life (rounded to a whole number if
necessary),
2. After the property was acquired or improved, if the
indebtedness would not have been incurred but for such 4. The years remaining (rounded to a whole number if
acquisition or improvement and the incurrence of such necessary),
indebtedness was reasonably foreseeable at the time of such 5. The annual depreciation expense amount, and
acquisition or improvement. See Regulations section 6. The allowable depreciation expense amount.
1.514(c)-1(a).
With certain exceptions, acquisition indebtedness doesn’t Line 4. Average acquisition indebtedness for any tax year is the
include debt incurred by the following. average amount of the outstanding principal debt during the part
of the tax year the property is held by the organization. To figure
1. A qualified (section 401) trust in acquiring or improving the average amount of acquisition debt, determine the amount of
real property. See section 514(c)(9). the outstanding principal debt on the first day of each calendar
2. A tax-exempt school (section 170(b)(1)(A)(ii)) and its month during that part of the tax year that the organization holds
affiliated support organizations (section 509(a)(3)) for the property. Add these amounts together, and divide the result
indebtedness incurred after July 18, 1984. by the total number of months during the tax year that the
3. An organization described in section 501(c)(25) in tax organization held the property. See section 514(a) and the
years beginning after December 31, 1986. related regulations for property acquired for an indeterminate
price.
4. An obligation, to the extent that it is insured by the
Federal Housing Administration, to finance the purchase, 1. The average amount of acquisition debt,
rehabilitation, or construction of housing for low and moderate 2. The percent allocable to debt-financed income, and
income persons, or indebtedness incurred by a small business 3. The product of (1) multiplied by (2).
investment company licensed after October 22, 2004, under the
Small Business Investment Act of 1958 if such indebtedness is Line 5. The average adjusted basis for debt-financed property
evidenced by a debenture issued by such company under is the average of the adjusted basis of the property on the first
section 303(a) of that Act, and held or guaranteed by the Small and last days during the tax year that the organization holds the
Business Administration (see section 514(c)(6)(B) for property. Determine the adjusted basis of property under section
limitations). 1011. Adjust the basis of the property by the depreciation for all
5. A retirement income account described in section 403(b) earlier tax years, whether or not the organization was exempt
(9) in acquiring or improving real property in tax years beginning from tax for any of these years. Similarly, for tax years during
on or after August 17, 2006. which the organization is subject to tax on UBTI, adjust the basis
of the property by the entire amount of allowable depreciation,
See Pub. 598 for additional exceptions to the rules for even though only a part of the deduction for depreciation is
debt-financed property. taken into account in figuring UBTI.
Example 1. An exempt organization owns a four-story Attach a statement showing, for each property:
building. Two floors are used for an exempt purpose and two

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1. A brief description of the property, • By vote or value, more than 50% of a corporation's stock (for
2. The adjusted basis, an organization that is a corporation);
• More than 50% of a partnership's profits or capital interests
3. The percent allocable to debt-financed income, and (for an organization that is a partnership); or
4. The product of (3) multiplied by (4). • More than 50% of the beneficial interests in an organization
If no adjustments to the basis of property under section 1011 (for an organization other than a corporation or partnership).
apply, the basis of the property is cost. To determine the ownership of stock in a corporation, apply
See section 514(d) and the related regulations for the basis of the principles of section 318 (constructive ownership of stock).
debt-financed property acquired in a complete or partial Apply similar principles to determine the ownership of interests
liquidation of a corporation in exchange for its stock. in a partnership or any other organization.
Line 6. Divide each property's average acquisition Column 3. Enter the net unrelated income (or net unrelated
indebtedness for the tax year by that property's average loss) of each controlled entity listed that is exempt from tax
adjusted basis during the period it is held in the tax year. This under section 501(a).
percentage cannot be more than 100%. Column 7. Enter the taxable income of each nonexempt
Line 7. The amount of income from debt-financed property controlled organization.
included in unrelated trade or business income is figured by Column 8. Enter the net unrelated income (or net unrelated
multiplying the property's gross income by the percentage loss) of each controlled entity listed that isn't exempt from tax
computed on line 6. under section 501(a). Net unrelated income is that portion of the
Line 8 . Enter on line 8 the sum of amounts computed for each controlled entity's taxable income that would be UBTI if the entity
property on line 7. Also enter this amount on Part I, line 7, were exempt under section 501(a) and had the same exempt
column (A). purposes as the controlling organization. Net unrelated loss is
the controlled organization's NOL adjusted under rules similar to
Line 9. For each debt-financed property, multiply the total those used to determine net unrelated income.
deductions directly connected to the income (including the
dividends-received deductions allowed by sections 243, 244, Column 4 or 9. For each controlled organization, enter the total
and 245) by the percentage computed on line 6. However, if the of specified payments received from each controlled
debt-financed property is depreciable property, figure the organization. If the organization received both specified
depreciation deduction by the straight line method only and payments and qualifying specified payments from a controlled
enter the amount on Schedule A, Part V, line 3a. organization, enter specified payments on one line and
qualifying specified payments on another so that there are dual
For each debt-financed property, attach statements showing entries for that controlled organization.
separately a computation of the depreciation deduction (if any)
reported on Schedule A, Part V, line 3a, (as described earlier) Column 5 or 10. For specified payments, enter the portion of
and a breakdown of the expenses included on Schedule A, Part column 4 or 9 to the extent that the payment reduced the net
V, line 3b. Corporations owning stock that is unrelated unrelated income (or increased the net unrelated loss) of the
debt-financed property should see Schedule C (Dividends and controlled entity.
Special Deductions) of Form 1120, U.S. Corporation Income Tax Column 6 or 11. Enter only those deductions directly
Return, to determine the dividends-received deductions to connected with the income entered in column 5 or 10.
include on Schedule A, Part V, line 3b.
With respect to qualifying specified payments, enter only that
When a capital loss for the tax year may be carried back or portion of expenses directly connected to the amounts included
carried over to another tax year, the amount to carry over or in column 5 or 10, that is, the excess of the payment over the
back is figured by using the percentage determined above. FMV amount, as determined in accordance with section 482.
However, in the year to which the amounts are carried, don't Don't enter any expenses relating to the portion of such payment
apply the debt-basis percentage to determine the deduction for that isn't includible in income under this special rule.
that year.
For valuation misstatements regarding qualifying
Line 10. On line 10, enter the sum of amounts computed for ! specified payments, there is a 20% addition to tax. See
each property on line 9. Also enter this amount on Part I, line 7, CAUTION section 512(b)(13)(E)(ii).
column (B).
Excess qualifying specified payments. Excess qualifying
Line 11. Enter the total dividends-received deductions (after specified payments received or accrued from a controlled entity
reduction, when applicable, by the debt-basis percentage(s)) (that is, the amount of qualifying specified payments in excess of
included on Schedule A, Part V, line 9. what would have been paid or accrued if the payments had been
determined under section 482) are included in a controlling
Part VI. Interest, Annuities, Royalties, exempt organization's UBTI.
and Rents From Controlled
Part VII. Investment Income of a
Organizations
Section 501(c)(7), (9), or (17)
Under section 512(b)(13), interest, annuities, royalties, and rents
received or accrued (directly or indirectly) by a controlling Organization
organization from a controlled organization are subject to tax, Generally, for section 501(c)(7), (9), or (17) organizations,
whether or not the activity conducted by the controlling unrelated trade or business income includes all gross income
organization to earn these amounts is a trade or business or is from nonmembers with certain modifications. See section 512(a)
regularly conducted. However, see Regulations section (3)(A). Report on Schedule A, Part VII, all income from
1.512(b)-1(l)(5) regarding amounts taxable under other investments in securities and other similar investment income
provisions of the Code. from nonmembers, including 100% of income and directly
Controlled organization. An entity is a “controlled connected expenses from debt-financed property. Don't report
organization” if the controlling organization owns: nonmember income from debt-financed property on Schedule A,
Part V.

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All section 501(c)(7), (9), and (17) organizations figure their Net investment income set aside must be specifically
investment income using Schedule A, Part VII. Don't include earmarked as such, or placed in a separate account or fund
interest on state and local governmental obligations described in (except for a section 501(c)(9) or (17) organization which, by the
section 103(a). 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).
These rules apply to a corporation described in section
If a section 501(c)(7), (9), or (17) organization (or a title 501(c)(2) (title holding corporation) whose income is payable to
holding corporation, described earlier) sells property that was an organization described in section 501(c)(7), (9), or (17) if it
used for the exempt function of the section 501(c)(7), (9), or (17) files a consolidated return with the section 501(c)(7), (9), or (17)
organization and buys other property used for the organization's organization.
exempt function within a period beginning 1 year before the date
of the sale, and ending 3 years after the date of the sale, the gain Part VIII. Exploited Exempt Activity
from the sale will be recognized only to the extent that the sales
price of the old property is more than the cost of the other Income, Other Than Advertising
property. The other property need not be similar in type or use to
the old property. The organization must notify the IRS of the sale Income
by a statement attached to the return, or other written notice. Exempt organizations that have gross income from an unrelated
trade or business activity that exploits an exempt activity (other
To compute the gain on the sale of depreciable property, see than periodical advertising income reportable on Schedule A,
the instructions for Part V, line 5, to determine the adjusted basis Part IX) should complete Schedule A, Part VIII. See Regulations
of the property. section 1.513-1(d)(4)(iv) for a definition of exploited exempt
Column 3. Deduct only those expenses that are directly activity. Report income from advertising other than in a
connected to the net investment income. Allocate deductions periodical on Schedule A, Part VIII.
between exempt activities and other activities where necessary. Line 1. Briefly describe the exempt activity being exploited in
The organization may not take the dividends-received an unrelated trade or business activity.
deductions in figuring net investment income because they
aren't treated as directly connected with the production of gross Line 3. An exempt organization may take all deductions directly
income. connected with the gross income from the unrelated trade or
business activity.
Column 4. Section 501(c)(7), (9), and (17) organizations may
set aside income that would otherwise be taxable under section Line 4. Subtract directly connected deductions from the gross
512(a)(3). However, income derived from an unrelated trade or unrelated business income. If unrelated business income
business may not be set aside and thus can’t be exempt function exceeds the directly connected deduction, the exempt
income. In addition, any income set aside and later used for organization may take into account all deductible items
other purposes must be included in income. attributable to the exploited exempt activity, with the following
Section 501(c)(7), (9), and (17) organizations won't be taxed limitations.
on income set aside for: 1. Reduce the deductible items of the exempt activity by the
1. Religious, charitable, scientific, literary, or educational income from the activity.
purposes, or for the prevention of cruelty to children or animals 2. Limit the net amount of deductible items arrived at in item
(and reasonable administration costs directly connected to such 1 above for the exempt activity to the net unrelated business
purposes); or income from the exploited exempt activity.
2. The payment of life, sickness, accident, or other benefits 3. Exclude income and expenses of the exempt activity in
(and reasonable administration costs directly connected to such figuring a loss carryover or carryback from the unrelated trade or
benefits) by a section 501(c)(9) or (17) organization. The amount business activity exploiting the exempt activity.
allowed as a set-aside may not exceed a limit determined using 4. Exclude deductible items of the exempt activity in figuring
section 512(a)(3)(E). See sections 512(a)(3)(E) and 419A for unrelated trade or business income from an activity that isn't
details. exploiting the same exempt activity.
Report income set aside on Schedule A, Part VII, column 4. As a result, the net includible exploited exempt activity
Attach a statement listing: income is the UBTI minus the excess of the exempt activity
1. The amount set aside for charitable purposes; expenses over the exempt activity income. If the income from
2. The amount set aside for reasonable administration costs the exempt activity exceeds the exempt activity expenses, don't
directly connected with such amount; add that profit to the net income from the unrelated business
activity. Attach a separate statement showing the computation.
3. The amount set aside for payment of life, sickness,
accident, or other benefit; and Part IX. Advertising Income
4. The amount set aside for reasonable administration costs An exempt organization that earned gross income from the sale
directly connected with the payment of such benefits. of advertising in an exempt organization periodical must
Amounts set aside aren't deductible under section 170 or any complete Schedule A, Part IX. The part of the advertising income
other section of the Code. taken into account is determined as follows.
The organization may elect to treat income set aside by the 1. If direct advertising costs (expenses directly connected
date for filing the return, including any extension of time, as with advertising income) are more than advertising income
income set aside-in the tax year for which the return is filed. The (unrelated business income), deduct that excess in figuring UBTI
income set aside must have been includible in gross income for from any other unrelated trade or business activity conducted by
that earlier tax year. the organization.
Although set-aside income may be accumulated, any 2. If advertising income is more than direct advertising
accumulation that is unreasonable will be evidence that the set costs, and circulation income (exempt activity income) equals or
aside wasn’t for the purposes previously mentioned.

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exceeds readership costs (exempt activity expenses), then UBTI the NAICS or Business Activity Code shown on the Schedule A
is the excess of advertising income over direct advertising costs. for the current tax year can enter the explanation for the change
3. If advertising income is more than direct advertising here.
costs, and readership costs are more than circulation income, For each entry in Part XI, include the Schedule A Part and line
then UBTI is the excess of total income (advertising income and number, a brief description, and the amount (if any). If
circulation income) over total periodical costs (direct advertising necessary, you may also attach a PDF document to provide
costs and readership costs). supplemental information.
4. If the readership costs are more than the circulation
income, and the net readership costs are more than the excess Paperwork Reduction Act Notice
of advertising income over direct advertising costs, no loss is We ask for the information on these forms to carry out the
allowable. See Regulations section 1.512(a)-1(f)(2)(ii)(b). Internal Revenue laws of the United States. You are required to
For allocating membership receipts to circulation income, see give us the information. We need it to ensure that you are
Rev. Rul. 81-101, 1981 C.B. 352. complying with these laws and to allow us to figure and collect
the right amount of tax. You are not required to provide the
Consolidated periodicals. If an organization publishes two or information requested on a form that is subject to the Paperwork
more periodicals, it may elect to treat the gross income for all Reduction Act unless the form displays a valid OMB control
(but not less than all) periodicals, and deductions directly number. Books or records relating to a form or its instructions
connected with those periodicals (including excess readership must be retained as long as their contents may become material
costs) as if the periodicals were one to determine its UBTI. This in the administration of any Internal Revenue law. Generally, tax
rule only applies to periodicals published for the production of returns and return information are confidential, as required by
income. A periodical is considered published for the production section 6103.
of income if gross advertising income of the periodical is at least
25% of the readership costs, and the periodical is an activity Estimates of Taxpayer Burden. These include forms in the
engaged in for profit. 990 series and attachments; and Forms 1023, 1024, 1028,
5578, 5884-C, 8038, 8038-B, 8038-CP, 8038-G, 8038-GC,
If periodicals are consolidated, check the box next to the 8038-R, 8038-T, 8038-TC, 8328, 8718, 8282, 8453-TE, 8453-X,
periodical name, and attach a statement showing the name of 8868, 8870, 8871, 8872, 8879-TE, 8886-T, and 8899 and their
each periodical in the consolidated group. The attached schedules; and all the forms tax-exempt organizations attach to
statement should include the amounts that correspond to their tax returns. Time spent and out-of-pocket costs are
information for lines 2 through 4. Attach a separate statement for presented separately. Time burden includes the time spent
the consolidated group of publications that includes the amounts preparing to file and to file, with recordkeeping representing the
corresponding to the information for lines 5 through 8. largest component. Out-of-pocket costs include any expenses
incurred by taxpayers to prepare and submit their tax returns.
Part X. Compensation of Officers, Examples include tax return preparation and submission fees,
Directors, and Trustees postage and photocopying costs, and tax preparation software
costs. Note that these estimates do not include burden
Complete columns 1 through 4 for those officers, directors, and associated with post-filing activities. IRS operational data
trustees whose salaries or other compensation are allocable to indicate that electronically prepared and filed returns have fewer
unrelated business gross income. Don't include in column 4 arithmetic errors, implying lower post-filing burden.
compensation that is deducted on Schedule A, Part II, lines 2
and 14, or any line of Schedule A, Parts III through IX. Reported time and cost burdens are national averages and
do not necessarily reflect a “typical” case. Most taxpayers
Part XI. Supplemental Information experience lower than average burden, with taxpayer burden
Use Part XI to explain the organization’s operations, to provide varying considerably by taxpayer type. For instance, the
information for lines that don’t have an embedded attachment to estimated average time burden for all taxpayers filing Forms
capture the information to supplement information provided on 990, 990-EZ, 990-PF, 990-T, and 990-N and related forms is
an embedded attachment, or to provide any other information in 32.8 hours, with an average cost of $921 per return. This
support of amounts reported on Schedule A. An organization average includes all associated forms and schedules, across all
that associated unrelated trade or business activity with a preparation methods and taxpayer activities.
different NAICS or Business Activity Code in a prior year than

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Fiscal Year 2023 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 330,400 245,200 122,700 239,600 743,800
Estimated Average
Total Time (Hours) 107 64 53 46 5
Estimated Average
Total
Out-of-Pocket
Costs $2,600 $600 $1,900 $2,100 $20
Estimated Average
Total Monetized
Burden $8,700 $1,400 $4,100 $5,600 $90
Estimated Total
Time (Hours) 35,780,000 15,770,000 6,510,000 10,940,000 3,720,000
Estimated Total
Out-of-Pocket
Costs $867,200,000 $118,600,000 $237,200,000 $512,700,000 $13,800,000
Estimated Total
Monetized Burden $2,916,100,000 $335,200,000 $501,300,000 $1,346,200,000 $64,800,000
Note: Amounts above are for FY2023. 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 Internet, You can access the IRS website 24 hours a day, 7
about this publication and suggestions for future editions. You days a week, at IRS.gov to do the following.
can send us comments through IRS.gov/FormComments. Or • Download forms and publications.
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Tax Forms and Publications Division • Use online Internal Revenue Code (IRC), Regulations, or
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Washington, DC 20224 • View Internal Revenue Bulletins (IRBs) published in the last
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Getting tax forms, instructions, and publications, Go to
Photographs of missing children, The IRS is a proud partner IRS.gov/Forms to download current and prior-year forms,
with the National Center for Missing & Exploited Children. instructions, and publications.
Photographs of missing children selected by the Center may
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You can help bring these children home by looking at the
call 800-829-3676 to order prior-year forms and instructions. The
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this form, call 877-829-5500. This toll-free telephone service is
available Monday through Friday.

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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 
with “9” are not part of the NAICS and are  Appendix A. Definitions                    business 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
activities); or complete Form 990-T, Part I, line 4. any 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 $11.70 (per Rev. Proc. 2021-45, by the due date (including extensions) of
during the tax year. Attach a declaration
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                                                       • Form 8975, Country-by-Country 
within 3 years after the donor contributed     Appendix C. Public                        Report.
the property. See the instructions for 
Form 8282.                                     Inspection of Form                        How does a 501(c)(3) organization 
                                                                                         make its annual returns available for 
Special rules for contributions of cer-        990-T Returns Filed by                    public inspection?     A 501(c)(3) 
tain easements in registered historic                                                    organization must make its annual 
districts. The following rules apply to        Section 501(c)(3)                         returns available in two ways.
certain contributions of real property         Organizations                             • By office visitation.
interests located in a registered historic                                               • By providing copies or making them 
district.                                      Public inspection requirements of         widely available.
• A deduction is allowed for the qualified     section 501(c)(3) organizations.          Public inspection by office visitation. 
real property interest, if the exterior of the Under section 6104(d), a section 501(c)   A 501(c)(3) organization must make its 
building (including the front, side, rear,     (3) organization that files Form 990-T    annual returns available for public 
and space above the building) is               must make its entire annual exempt        inspection without charge at its principal, 
preserved and no portion of the exterior       organization business income tax return   regional, and district offices during 
is changed in a manner that is                 (including amended returns) available for regular business hours.
inconsistent with its historical character.    public inspection.
See section 170(h)(4)(B).                        The Form 990-T and related              Conditions that may be set for public 
• A deduction is allowed on the building       schedules must be made available for      inspection at the office.  A 501(c)(3) 
only (no deduction is allowed for a            public inspection for a period of 3 years organization:
structure or land) if located in a registered  from the date the Form 990-T is required  • May have an employee present,
historic district. However, if listed in the   to be filed, including any extension.     • Must allow the individual conducting 
National Register, a deduction is also                                                   the inspection to take notes freely during 
allowed for structures or land areas. See      What schedules and attachments to         the inspection, and
section 170(h)(4)(C).                          Form 990-T must be made available         • Must allow an individual to make 
• The organization must also include the       for public inspection? Only schedules,    photocopies of documents at no charge 
following information with the tax return.     attachments (statements), and             but only if the individual brings 
  1. A qualified appraisal (as defined in      supporting documents that relate to the   photocopying equipment to the place of 
                                               imposition of tax on UBTI must be made 
section 170(f)(11)(E)) of the qualified                                                  inspection.
                                               available for public inspection when 
property interest.                                                                       Determining if a site is a regional or 
                                               attached to a section 501(c)(3) 
  2. Photographs of the entire exterior        organization's Form 990-T filed after     district office.  A regional or district 
of the building.                               August 17, 2006.                          office is any office of a 501(c)(3) 
                                                                                         organization, other than its principal 
  3. A description of all restrictions on        The following documents, when           office, that has paid employees whose 
the development of the building. See           attached to a section 501(c)(3)           total number of paid hours a week are 
section 170(h)(4)(B)(iii).                     organization's Form 990-T filed after     normally 120 hours or more. Include the 
• The organization's deduction may be          August 17, 2006, aren't required to be    hours worked by part-time (as well as 
reduced if rehabilitation credits were         made available for public inspections.    full-time) employees in making that 
claimed on the building. See section           • Form 926, Return by a U.S. Transferor   determination.
170(f)(14).                                    of Property to a Foreign Corporation.       What sites aren't considered a 
• A $500 filing fee may apply to certain       • Form 5471, Information Return of U.S.   regional or district office.  A site isn't 
deductions over $10,000. See section           Persons With Respect to Certain Foreign   considered a regional or district office if:
170(f)(13).                                    Corporations.
                                               • Form 8271, Investor Reporting of Tax      1. The only services provided at the 
Reduced deductions for contributions           Shelter Registration Number.              site further the organization's exempt 
for certain property.  The organization        • Form 8594, Asset Acquisition            purposes (for example, daycare, health 
must reduce its deduction for                  Statement Under Section 1060.             care, or scientific or medical research); 
contributions of certain capital gain          • Form 8621, Information Return by a      and
property and qualified appreciated stock.      Shareholder of a Passive Foreign            2. The site doesn’t serve as an office 
See sections 170(e)(1) and 170(e)(5).          Investment Company or Qualified           for management staff, other than 
Special rules for corporations.     A          Electing Fund.                            managers who are involved only in 
larger deduction is allowed for certain        • Form 8832, Entity Classification        managing the exempt function activities 
contributions of:                              Election.                                 at the site.
• Inventory and other property to certain      • Form 8858, Information Return of U.S. 
organizations for use in the care of the ill,  Persons With Respect to Foreign             What if the 501(c)(3) organization 
needy, or infants (including contributions     Disregarded Entities.                     doesn’t maintain a permanent office? 
of apparently wholesome food (see              • Form 8865, Return of U.S. Person        If the 501(c)(3) organization doesn’t 
section 170(e)(3)(C))); and                    With Respect to Certain Foreign           maintain a permanent office, it will 
• Scientific equipment used for research       Partnerships.                             comply with the public inspection by 
to institutions of higher learning or to       • Form 8886, Reportable Transaction       office visitation requirement by making 
certain scientific research organizations      Disclosure Statement.                     the annual returns available at a 
(see section 170(e)(4)).                       • Form 8913, Credit for Federal           reasonable location of its choice. It must 
                                               Telephone Excise Tax Paid.                permit public inspection:
  See section 170, the related                 • Form 8925, Report of                    • Within a reasonable amount of time 
regulations, and Pub. 526, Charitable          Employer-Owned Life Insurance             after receiving a request for inspection 
Contributions.                                 Contracts.                                (normally, not more than 2 weeks), and
                                               • Form 8941, Credit for Small Employer    • At a reasonable time of day.
                                               Health Insurance Premiums.                  Optional method of complying.        If a 
                                                                                         501(c)(3) organization that doesn’t have 

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

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

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Index
 
                                         Estimated Tax Payments    11            Other tax amounts:
A                                        Estimated Tax Penalty 12                 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 18                                Income from qualifying shipping       P
Alternative Minimum Tax (Trusts            activities.   15                      Partnerships 17
  Only) 10                                 Passive loss and at-risk              Passive foreign investment company 
Amortization 20                            limitations.   15                      (PFIC) shareholders   18
Annual return 30                         Exploited Exempt Activity Income,       Payment card and third party network 
                                           Other Than Advertising Income      26
Appendix A. Definitions 30                                                        transactions  15
                                                                                 Proxy Tax 10
Appendix B. Charitable Contribution      F                                       Public Inspection Requirements of 
  Deduction  31
Appendix C. Public Inspection of         Foreign Organizations 11                 Section 501(c)(3) 7
  Form 990-T Returns Filed by            Foreign Tax Credit 10                   Purpose of Form 2
  Section 501(c)(3) Organizations     7
                                         G                                       R
B                                        Gain or loss on disposition of certain  Recapture of investment credit:
Backup Withholding 11                      brownfield property 16                 Recapture of low-income housing 
Biodiesel and Renewable Diesel           General Business Credit:                 credit:
  Fuels Credit 18                          Refundable small employer tax          Interest due under the look-back 
                                           credit 10                              method.       11
C                                        Gross Receipts or Sales:                Recoveries of bad debts deducted           18
Capital Gain Net Income  16                Advance payments:                     Rent Income  23
Capital Loss Deduction for Trusts     17   Installment sales                     Reporting 990-T Information on Other 
                                                                                  Returns  7
Certain Activities and Other 
  Information:                           I                                       Rounding Off to Whole Dollars            7

  Signature or other authority over a    Income from property financed with      S
  financial account in a foreign           qualified 501(c)(3) bonds  18
  country:                               Income or (Loss) From a Partnership     S Corporations:
  Report of Foreign Bank and               or an S Corporation 17                 Qualified tax-exempts:
     Financial Accounts (FBAR)           Interest 21                              Exception    17
Change in address:                       Interest, Annuities, Royalties, and     Section 199A Deduction 9
  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 19
  Qualified ABLE Program 8                 Qualifying specified payment 25        Interest expense 19
  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      11
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                13
Cost of Goods Sold 22                      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    11
                                         N
D                                                                                T
                                         Name and Address:                       Tax and Payments   10
Debt-financed property                     Change of name.  8                    Tax Due:
  disposition 16                         Net Gain or (Loss) 17                    Pay by credit or debit card:
Deduction for Net Operating Loss      9  Net Operating Loss (NOL)  22             IRS.gov/E-pay     12
Deductions Not Taken Elsewhere:          Nonaccrual experience method     16     Tax on Noncompliant Facility 
  Directly connected expenses 19
                                                                                  Income   10
Depletion 21                             O                                       Tax Rate Schedule for Trusts            9
Disposition of property received from 
  taxable subsidiary 17                  Organizations described in section      Total of Unrelated Business Taxable 
Disregarded entity 2                       501(c)(19) 18                          Income Computed From all 
                                         Organizations Taxable as                 Unrelated Trades or Businesses            9
                                           Corporations. 9                       Total Tax 11
E                                                                                Total Unrelated Business Taxable 
                                         Other Credits 10
Employer-owned life insurance            Other Deductions:                        Income   9
  contracts 18                             Extraterritorial income exclusion  22 Travel, Meals, and Entertainment           20

                                                         -35-

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Trust filers only:                     Unrelated Trade or Business Income: Who Must File 2
  Qualified Business Income Deduction:  Purpose of the Schedule 13
  Determines the unrelated business 
  income separately for each           W
  unrelated trade or business  9
                                       When are section 263A capitalized 
                                        costs deductible:
U                                       Exceptions 19
Unrelated Debt-Financed Income 23

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