2023

Instructions for Form 990-T

Exempt Organization Business Income Tax Return (and Proxy Tax Under Section 

6033(e))

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue Code unless 

otherwise noted.

Contents Page

Purpose of Form ............................ 1

Who Must File ............................. 1

When, Where, and How To File ................. 3

Depository Method of Tax Payment .............. 4

Other Forms That May Be Required .............. 5

Accounting Methods ......................... 6

Specific Instructions ......................... 8

Items A Through L .......................... 8

Part I. Total Unrelated Business Taxable Income ..... 9

Part II. Tax Computation ..................... 10

Part III. Tax and Payments .................... 11

Part IV. Statements Regarding Certain Activities 

and Other Information .................... 13

Part V. Supplemental Information ............... 13

General Instructions — Schedule A (Form 990-T) ... 14

Purpose of the Schedule ..................... 14

Specific Instructions—Schedule A (Form 990-T) ... 16

Part I. Unrelated Trade or Business Income ....... 16

Part II. Deductions Not Taken Elsewhere .......... 19

Part III. Cost of Goods Sold ................... 23

Part IV. Rent Income ........................ 23

Part V. Unrelated Debt-Financed Income ......... 24

Part VI. Interest, Annuities, Royalties, and Rents 

From Controlled Organizations ............. 25

Part VII. Investment Income of a Section 501(c)(7), 

(9), or (17) Organization .................. 26

Part VIII. Exploited Exempt Activity Income, Other 

Than Advertising Income ................. 27

Part IX. Advertising Income ................... 27

Part X. Compensation of Officers, Directors, and 

Trustees ............................. 27

Part XI. Supplemental Information .............. 27

Business Activity Codes ..................... 29

Appendix A. Definitions ...................... 30

Appendix B. Charitable Contribution Deduction ..... 31

Appendix C. Public Inspection of Form 990-T 

Returns Filed by Section 501(c)(3) 

Organizations .......................... 32

Index ................................... 35

Future Developments

For the latest information about developments related to Form 

990-T and its instructions, such as legislation enacted after they 

were published, go to IRS.gov/Form990T.

What's New

Required electronic filing. If you are an organization or trust 

defined in section 511 and need to file Form 990-T, you are 

required to file electronically. See When, Where, and How To 

File, later, for more information.

Tax-exempt and governmental entities. For tax years 

beginning after 2022, applicable entities (such as certain 

tax-exempt and governmental entities) can elect to treat certain 

general business credits as a payment of income tax. See 

Applicable Entity Making an Elective Payment Election on IRA 

2022 Credits, later.

Section 6417(d)(1)(A) applicable entity. Form 990-T, Item G 

has been updated with a checkbox for applicable entities that 

are not normally required to file an annual tax return and are 

filing Form 990-T to make an elective payment election under 

section 6417.

Advanced manufacturing investment credit. Eligible filers 

may elect to treat the advanced manufacturing investment credit 

with respect to a facility as a payment of income tax under 

section 48D(d). See section 48D and the Instructions for Form 

3468.

Alternative minimum tax. The Inflation Reduction Act of 2022 

(IRA 2022) amended section 55 to impose a new corporate 

alternative minimum tax (CAMT) based on the adjusted financial 

statement income (AFSI) of an applicable corporation. See Form 

4626, Alternative Minimum Tax-Corporations, and its 

Instructions, for more information.

General Instructions

Purpose of Form

Use Form 990-T and Schedule A (as applicable) to:

• Report unrelated business income;

• Figure and report unrelated business income tax liability;

• Report proxy tax liability;

• Claim a refund of income tax paid by a regulated investment 

company (RIC) or a real estate investment trust (REIT), on 

undistributed long-term capital gain;

• Request a credit for certain federal excise taxes paid for small 

employer health insurance premiums paid, and

• Make (along with filing Form 3800 and the applicable general 

business credit form(s)) an elective payment election under 

section 48D or section 6417.

Who Must File

Organizations With Current Unrelated Business 

Taxable Income (UBTI)

• Any disregarded entity, domestic, or foreign organization 

exempt under section 501(a), section 529(a), or section 529A(a), 

if it has gross income of $1,000 or more from a regularly 

conducted unrelated trade or business (see Regulations section 

1.6012-2(e)). Gross income is gross receipts minus the cost of 

goods sold, (see Regulations section 1.61-3). For a discussion 

Jan 24, 2024 Cat. No. 11292U
of cost of goods sold, see Schedule A (Form 990-T), Part III. 

Cost of Goods Sold, later.

The gross receipts from a gaming business include all 

amounts wagered in games, not just the net proceeds 

after payment of prizes and other expenses. Cash prizes 

aren't included in cost of goods sold, but are reported on 

Schedule A, Part II, line 14, as other deductions.

A disregarded entity, as described in Regulations 

sections 301.7701-1 through 301.7701-3, is treated as a 

branch or division of its parent organization for federal 

tax purposes. Therefore, financial information applicable to a 

disregarded entity must be reported as the parent organization's 

financial information.

• Colleges and universities of states and other governmental 

units, and subsidiary corporations wholly owned by such 

colleges and universities. However, a section 501(c)(1) 

corporation that is an instrumentality of the United States and 

both organized and exempt from tax by an Act of Congress 

doesn’t have to file.

• Qualified tuition programs described under section 529 that 

have $1,000 or more of unrelated trade or business gross 

income.

• Qualified ABLE programs described under section 529A that 

have $1,000 or more of unrelated trade or business gross 

income.

• Trustees for the following trusts that have $1,000 or more of 

unrelated trade or business gross income.

1. Individual retirement accounts (IRAs), including traditional 

IRAs described under section 408(a).

2. Simplified employee pension IRAs (SEP IRAs) described 

under section 408(k).

3. Savings incentive match plan for employees of small 

employers IRAs (SIMPLE IRAs) described under section 408(p).

4. Roth IRAs described under section 408A.

5. Coverdell education savings accounts (ESAs) described 

under section 530.

6. Archer medical savings accounts (Archer MSAs) described 

under section 220.

7. Health savings accounts (HSAs) described under section 223.

Each account of a type listed above is treated as a 

separate trust for unrelated business income tax 

purposes (even if there is a single owner or beneficiary 

for multiple accounts) and must have its own employer 

identification number (EIN) if it will file Form 990-T to report 

gross unrelated business taxable income of $1,000 or more. A 

custodian is treated as a trustee. See section 408(h). Individual 

retirement annuities, unlike IRAs, aren't subject to unrelated 

business income tax.

IRAs and other tax-exempt shareholders in a RIC or 

REIT filing Form 990-T, only to obtain a refund of income 

tax paid on undistributed long-term capital gains should 

complete Form 990-T, as explained in IRAs and other 

tax-exempt shareholders in a RIC or REIT, later.

Applicable entity making an elective payment 

election on IRA 2022 credits

IRA 2022 extends, modifies, or creates several energy-related 

investment and production tax credits. These credits are taken 

as general business credits. IRA 2022 also created new section 

6417, which permits an applicable entity to make an elective 

payment election with respect to each applicable credit.

Under section 6417(d)(1)(A), applicable entities are defined 

as:

• State and local governments,

• Indian tribal governments,

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• Alaska Native Corporations,

• The Tennessee Valley Authority,

• Rural electric cooperatives, and

• Other tax-exempt entities.

Proposed regulations have been published that provide a 

more detailed definition of an applicable entity. Entities may rely 

on the definitions in the proposed regulations for tax years 

ending before final regulations are published, provided the entity 

follows the proposed regulations in their entirety and in a 

consistent manner with respect to all elections made under 

section 6417. See Proposed Regulations under section 6417.

The detailed description in the proposed regulations includes 

the following.

• An organization exempt from the tax imposed by subtitle A by 

reason of section 501(a);

• The government of an U.S. territory or political subdivision or 

instrumentality thereof;

• Any State, the District of Columbia, or a political subdivision or 

instrumentality thereof;

• The Tennessee Valley Authority;

• An Indian tribal government or a subdivision or instrumentality 

thereof;

• Any Alaska Native Corporation (as defined in section 3 of the 

Alaska Native Claims Settlement Act (43 U.S.C. 1602(m))); and

• Any corporation operating on a cooperative basis that is 

engaged in furnishing electric energy to persons in rural areas.

Pre-filing registration requirement. Before you file Form 

990-T, if you intend to make an elective payment election on 

Form 3800, you must complete a pre-filing registration for each 

property or facility. To register, go to IRS.gov/credits-deductions/

register-for-elective-payment-or-transfer-of-credits. See Pub. 

5884, Inflation Reduction Act (IRA) and CHIPS Act of 2022 

(CHIPS) Pre-Filing Registration Tool. Also see Registering For 

and Making Elective Payment and Transfer Elections in the 

Instructions for Form 3800.

Organizations With or Without Current UBTI

Elective payment election. Applicable entities making an 

elective payment election with respect to applicable credits (see 

section 6417), and eligible taxpayers making an elective 

payment election with respect to the advanced manufacturing 

investment credit under section 48D.

Organizations making an elective payment election must 

complete and attach Form 3800, General Business Credit, as 

well as the required form(s) on which you compute each 

individual credit. If your organization is filing Form 990-T only to 

make the elective payment election, see Elective Payment 

Election under Which Parts to Complete, later.

Proxy tax. Organizations liable for the proxy tax on lobbying 

and political expenditures. See Part II, Line 3. Proxy Tax, later, for 

a discussion of the proxy tax. If your organization is only required 

to file because of the proxy tax, see Proxy tax only under Which 

Parts To Complete, later.

Other taxes or amounts. Organizations that are liable for 

other taxes (such as tax deferred under section 1291 (Form 

990-T, Part II, line 4) or section 1294 (Part III, line 4)), or 

organizations liable for other amounts due (or entitled to a refund 

of, or credit for other amounts such as recapture of tax credits or 

interest adjustments (such as recapture of a credit or interest 

due under a look-back rule (Form 990-T, Part III, line 3e)). See a 

discussion of these items later. If your organization is required to 

file Form 990-T only because of these taxes or other amounts, 

see Other Taxes under Which Parts To Complete, later.

Qualified opportunity investment (annual report). 

Organizations that deferred a capital gain into a qualified 

opportunity fund (QOF) must file Form 990-T with Schedule D, 

Form 8949, and Form 8997 attached. Each such organization 

must file Form 990-T with Form 8997 attached annually until the 

2 Instructions for Form 990-T
organization disposes of the investment. See the Instructions for 

Form 8997.

If you are filing Form 990-T only with regard to an 

elective payment election, because of the proxy tax, 

other taxes, or only to claim a refund, go directly to 

Elective Payment Election Only, Proxy Tax Only, Other Taxes, or 

Claim for Refund, later. If you are filing Form 990-T only to claim 

the credit for small employer health insurance premiums, see the 

instructions for Part III, line 6f, later.

Which Parts To Complete

Organizations with unrelated business taxable income. 

Organizations with UBTI must complete Form 990-T, and also a 

separate Schedule A (Form 990-T) for each separate unrelated 

trade or business. See Regulations section 1.512(a)-6. 

Complete all Schedules A (Form 990-T) first. See General 

Instructions for Schedule A (Form 990-T), later.

Consolidated returns. The consolidated return provisions of 

section 1501 don't apply to exempt organizations, except for 

organizations having title holding companies. If a title holding 

corporation described in section 501(c)(2) pays any amount of 

its net income for a tax year to an organization exempt from tax 

under section 501(a) (or would, except that the expenses of 

collecting its income exceeded that income), and the corporation 

and organization file a consolidated return as described below, 

then treat the title holding corporation as being organized and 

operated for the same purposes as the other exempt 

organization (in addition to the purposes described in section 

501(c)(2)).

Two organizations exempt from tax under section 501(a), one 

a title holding company and the other earning income from the 

first, will be includible corporations for purposes of section 

1504(a). If the organizations meet the definition of an affiliated 

group and the other relevant provisions of chapter 6, then these 

organizations may file a consolidated return. The parent 

organization must attach Form 851, Affiliations Schedule, to the 

consolidated return. For the first year a consolidated return is 

filed or for the first year a new corporation is added to a 

consolidated return, the title holding company must attach Form 

1122, Authorization and Consent of Subsidiary Corporation To 

Be Included in a Consolidated Income Tax Return. See 

Regulations section 1.1502-100.

Organizations with no UBTI. An organization with no UBTI 

that needs to file Form 990-T should complete and file Form 

990-T only. Such an organization does not complete or attach 

Schedule A (Form 990-T) to its return.

Elective payment election only. Organizations filing with 

regard to making an elective payment election and have no 

unrelated business taxable income, including applicable entities 

(as defined earlier) not subject to federal income tax and not 

otherwise required to file any annual tax or information return, 

must complete the following lines of Form 990-T.

• The heading area above Part I, except items B, C, E, J, K, and 

L.

• Part II, lines 3 and 7 (enter -0-).

• Part III, lines 6g, 7, 10, and 11.

• Signature area.

In addition, complete and attach Form 3800, and all forms 

required to compute each applicable credit.

Proxy tax only. Organizations that are required to file Form 

990-T only because they are liable for the proxy tax on lobbying 

and political expenditures must complete the following.

• The heading (above Part I) except items J and K.

• Part II, lines 3 and 7.

• Part III.

• Signature area.

• Attach a statement showing the proxy tax computation.

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Other taxes. Organizations that are required to file Form 

990-T only because they are liable for tax under section 1291 or 

tax previously deferred under section 1294, recapture taxes, the 

tax on a hospital organization’s non-compliant facility income, or 

other items listed in the instructions for Part III, line 4, must 

complete the following.

• The heading above Part I except items J and K.

• The applicable lines of Parts II and III.

• Signature area.

• Attach all appropriate forms and/or schedules showing the 

computation of the applicable tax or taxes.

Other amounts due. Organizations that are required to file 

Form 990-T only because they are liable for amounts due 

because of the recapture of a tax credit, or other items listed in 

the instructions for Part III, line 3, must complete the following.

• The heading above Part I except items J and K.

• The applicable lines of Parts II and III that require an entry.

• Signature area.

• Attach all appropriate forms and/or schedules showing the 

computation of the applicable tax or taxes.

Claim for refund (including special instructions for IRA 

trustees or direct payments of certain credits). If your only 

reason for filing a Form 990-T is to claim a refund or request a 

credit, complete the following.

• The heading above Part I except items J and K.

• Enter -0- on Part I, lines 1 and 11, and Part III, line 4.

• Enter the credit or payment on Part III, lines 6a through 6g, as 

appropriate.

• Part III, lines 7, 10, and 11.

• Signature area.

For claims described below, follow the additional instructions 

for that claim.

IRAs and other tax-exempt shareholders in a RIC or REIT. 

If you are an IRA or other tax-exempt shareholder that is invested 

in a RIC or a REIT and file Form 990-T only to obtain a refund of 

income tax paid on undistributed long-term capital gains, follow 

the steps under Claim for refund (including special instructions 

for IRA trustees) above; check the applicable box in item H at the 

top of Form 990-T; and attach Copy B of Form 2439, Notice to 

Shareholder of Undistributed Long-Term Capital Gains.

Composite Form 990-T. If you are a trustee of more than one 

IRA invested in a RIC, you may be able to file a composite Form 

990-T to claim a refund of tax under section 852(b) instead of 

filing a separate Form 990-T for each IRA. See Notice 90-18, 

1990-1 C.B. 327, for information on who can file a composite 

return. Complete the steps under Claim for refund (including 

special instructions for IRA trustees) above and follow the 

additional requirements in the notice.

Backup withholding. If your only reason for filing Form 

990-T is to claim a refund of backup withholding, complete the 

steps under Claim for refund (including special instructions for 

IRA trustees) above and attach a copy of the Form 1099 showing 

the withholding.

When, Where, and How To File

When To File

15th day of 4th month or 15th day of 5th month. An 

employees' trust defined in section 401(a), an IRA (including 

SEPs and SIMPLEs), a Roth IRA, a Coverdell ESA, or an Archer 

MSA must file Form 990-T by the 15th day of the 4th month after 

the end of its tax year. All other organizations must file Form 

990-T by the 15th day of the 5th month after the end of their tax 

years. If the regular due date falls on a Saturday, Sunday, or legal 

holiday, file no later than the next business day. If the return is 

filed late, see Interest and Penalties, later.

Instructions for Form 990-T 3
Extensions. Filers may request an automatic extension of time 

to file Form 990-T by using Form 8868, Application for Automatic 

Extension of Time To File an Exempt Organization Return.

Note: For 2023, an applicable entity filing Form 990-T solely to 

make an elective payment election that is:

• A State, the District of Columbia, or political subdivision or 

instrumentality or agency thereof;

• The Tennessee Valley Authority; or

• An Indian tribal government or a subdivision or instrumentality 

or agency thereof,

does not need to file Form 8868 to request an automatic 

extension of time to file Form 990-T. For 2023, a paperless 

automatic extension will be provided to each such entity that has 

registered its intention to make an elective payment election and 

has obtained one or more registration numbers.

Amended return. To correct errors or change a previously filed 

return, check box F, “Check box if an amended return,” at the top 

of the return. Also, in Part V, Supplemental Information, include a 

statement that indicates the line numbers on the original return 

that were changed and give the reason for each change. 

Generally, the amended return must be filed within 3 years after 

the date the original return was due or 3 years after the date the 

organization filed it, whichever is later.

Where and How To File

Required electronic filing. If you are an organization or trust 

defined in section 511 and need to file Form 990-T, you are 

required to file electronically. For additional information, visit 

IRS.gov/E-file.

If you are an applicable entity that is not an organization or 

trust defined in section 511, and you are filing Form 990-T to 

make an elective payment election, electronic filing is 

encouraged but not required.

Estimated Tax Payments

Generally, an organization filing Form 990-T must make 

installment payments of estimated tax if its estimated tax (tax 

minus allowable credits) is expected to be $500 or more. Don't 

include the proxy tax when computing your estimated tax liability 

for 2023.

Depository Method of Tax Payment

The organization must pay any tax due in full by the due date of 

the return without extension.

Electronic Deposit Requirement

The organization must deposit all depository taxes (such as 

employment tax, excise tax, and corporate income tax) 

electronically. Generally, electronic funds transfers are made 

using the Electronic Federal Tax Payment System (EFTPS). For 

more information about EFTPS or to enroll in EFTPS, go to 

EFTPS.gov, or call 800-555-4477. To contact EFTPS using 

Telecommunications Relay Services (TRS) for people who are 

deaf, hard of hearing, or have a speech disability, dial 711 and 

then provide the TRS assistant the 800-555-4477 number above 

or 800-733-4829. Also, see Pub. 966, Electronic Federal Tax 

Payment System: A Guide to Getting Started.

Depositing on time. For EFTPS deposits to be made timely, 

the organization must submit the deposit by 8 p.m. Eastern time 

the day before the deposit is due.

Same-day wire payment option. If you fail to submit a deposit 

transaction on EFTPS by 8 p.m. Eastern time the day before the 

date a deposit is due, you can still make your deposit on time by 

using the Federal Tax Application (FTA), a same-day federal tax 

payment system that works in conjunction with EFTPS. Make 

arrangements with your financial institution ahead of time, noting 

the institution's availability, deadlines, and costs. To learn more, 

go to IRS.gov/SameDayWire.

Timeliness of deposits. The IRS will use business days to 

determine the timeliness of deposits. Business days are any day 

that isn’t a Saturday, Sunday, or legal holiday in the District of 

Columbia.

Interest and Penalties

Your organization may be subject to interest and penalty charges 

if it files a late return or fails to pay tax when due. Generally, the 

organization isn't required to include interest and penalty 

charges on Form 990-T because the IRS can figure the amount 

and bill the organization for it.

Interest. Interest is charged on taxes not paid by the original 

due date of the return even if the organization uses Form 8868 to 

request an automatic extension of time to file. Interest is also 

charged on penalties imposed for failure to file, negligence, 

fraud, substantial valuation misstatements, and substantial 

understatements of tax from the due date (including extensions) 

to the date of payment. The interest charge is figured at the 

underpayment rate determined under section 6621.

Late filing of return. An organization that fails to file its return 

when due (including extensions of time for filing) is subject to a 

penalty of 5% of the unpaid tax for each month or part of a month 

the return is late, up to a maximum of 25% of the unpaid tax. The 

minimum penalty for a return that is more than 60 days late is the 

smaller of the tax due or $485. The penalty won't be imposed if 

the organization can show that the failure to file on time was due 

to reasonable cause. If you receive a notice about a penalty after 

you file this return, reply to the notice with an explanation and we 

will determine if you meet reasonable-cause criteria. Don’t 

include an explanation when you file your return.

Late payment of tax. The penalty for late payment of taxes is 

usually 1/2 of 1% of the unpaid tax for each month or part of a 

month the tax is unpaid. The penalty can’t exceed 25% of the 

unpaid tax. If you receive a notice about a penalty after you file 

this return, reply to the notice with an explanation and we will 

determine if you meet reasonable-cause criteria. Don’t include 

an explanation when you file your return.

Estimated tax penalty. An organization that doesn’t make 

estimated tax payments when due may be subject to an 

underpayment penalty for the period of underpayment. 

Generally, an organization is subject to this penalty if its tax 

liability for the tax year is $500 or more and it didn’t make 

estimated tax payments of at least the smaller of its tax liability 

for the tax year or 100% of the prior year's tax. See section 6655 

for details and exceptions.

Trust fund recovery penalty. This penalty may apply if certain 

excise, income, social security, and Medicare taxes that must be 

collected or withheld aren't paid to the U.S. Treasury. These 

taxes are generally reported on:

• Form 720, Quarterly Federal Excise Tax Return;

• Form 941, Employer's QUARTERLY Federal Tax Return;

• Form 943, Employer's Annual Federal Tax Return for 

Agricultural Employees; or

• Form 945, Annual Return of Withheld Federal Income Tax.

The trust fund recovery penalty may be imposed on all 

persons who are determined by the IRS to have been 

responsible for collecting, accounting for, and paying over these 

taxes, and who acted willfully in not doing so. The penalty is 

equal to the unpaid trust fund tax. See the Instructions for Form 

720; or Pub. 15 (Circular E), Employer's Tax Guide, for details, 

including the definition of responsible persons.

4 Instructions for Form 990-T
Other penalties. There are also penalties that can be imposed 

for negligence, substantial understatement of tax, reportable 

transaction understatements, and fraud. See sections 6662, 

6662A, and 6663.

Other Forms That May Be Required

Forms W-2 and W-3. File Form W-2, Wage and Tax Statement, 

and Form W-3, Transmittal of Wage and Tax Statements, to 

report wages, tips, other compensation, withheld income taxes, 

and withheld social security/Medicare taxes for employees.

Form 461. Noncorporate taxpayers may need to file Form 461, 

Limitation on Business Losses. See Form 461 and its 

instructions.

Form 720. File Form 720, Quarterly Federal Excise Tax Return, 

to report environmental excise taxes, communications and air 

transportation taxes, fuel taxes, manufacturers taxes, ship 

passenger tax, and certain other excise taxes. See Trust fund 

recovery penalty, earlier.

Form 926. File Form 926, Return by a U.S. Transferor of 

Property to a Foreign Corporation, if the organization is required 

to report certain transfers to foreign corporations under section 

6038B.

Form 940. File Form 940, Employer's Annual Federal 

Unemployment (FUTA) Tax Return, if the organization is liable for 

FUTA tax.

Form 941 and Form 943. File Form 941, Employer's 

QUARTERLY Federal Tax Return; or Form 943, Employer's 

Annual Federal Tax Return for Agricultural Employees, to report 

income tax withheld, and employer and employee social security 

and Medicare taxes. Also, see Trust fund recovery penalty, 

earlier.

Form 945. File Form 945, Annual Return of Withheld Federal 

Income Tax, to report income tax withheld from nonpayroll 

distributions or payments, including pensions, annuities, IRAs, 

gambling winnings, and backup withholding.

Form 965-A and Form 965-B. See Form 965-A, Individual 

Report of Net 965 Tax Liability; Form 965-B, Corporate and Real 

Estate Investment Trust (REIT) Report of Net 965 Tax Liability 

and Electing REIT Report of 965 Amounts; and their respective 

instructions, for more information.

Form 1098. File Form 1098, Mortgage Interest Statement, to 

report the receipt from any individual of $600 or more of 

mortgage interest (including points) in the course of the 

organization's trade or business and reimbursements of overpaid 

interest.

Forms 1099-A, B, DIV, INT, LTC, MISC, NEC, OID, R, S, and 

SA. Organizations engaged in an unrelated trade or business 

may be required to:

• File an information return on Forms 1099-A, B, DIV, INT, LTC, 

MISC, NEC, OID, R, S, and SA;

• Report acquisitions or abandonments of secured property 

through foreclosure;

• Report proceeds from broker and barter exchange 

transactions;

• Report certain dividends and distributions;

• Report interest income;

• Report certain payments made on a per diem basis under a 

long-term care insurance contract, and certain accelerated 

death benefits;

• Report miscellaneous income (such as payments to providers 

of health and medical services, and miscellaneous income 

payments);

• Report nonemployee compensation;

• Report original issue discount;

• Report distributions from retirement or profit-sharing plans, 

IRAs, SEPs, SIMPLEs, and insurance contracts;

• Report proceeds from real estate transactions; and

• Report distributions from an HSA, an Archer MSA, or a 

Medicare Advantage MSA.

When filing the above listed Form 1099 series 

information returns, the organization must also file Form 

1096, Annual Summary and Transmittal of U.S. 

Information Returns.

Form 4466. File Form 4466, Corporation Application for Quick 

Refund of Overpayment of Estimated Tax, to apply for a quick 

refund if the organization overpaid its estimated tax for the year 

by at least 10% of its expected income tax liability and at least 

$500.

Form 5498. File Form 5498, IRA Contribution Information, to 

report contributions (including rollover contributions) to any IRA, 

including a SEP, SIMPLE, or Roth IRA, and to report Roth IRA 

conversions, IRAs, and the fair market value (FMV) of the 

account.

Form 5498-ESA. File Form 5498-ESA, Coverdell ESA 

Contribution Information, to report contributions (including 

rollover contributions) to a Coverdell ESA.

Form 5498-SA. File Form 5498-SA, HSA, Archer MSA, or 

Medicare Advantage MSA Information, to report contributions to 

an HSA or Archer MSA, and the FMV of an HSA, an Archer 

MSA, or a Medicare Advantage MSA. See the Instructions for 

Forms 1099-SA and 5498-SA.

Form 5713. File Form 5713, International Boycott Report, if the 

organization had operations in, or related to, certain boycotting 

countries.

Form 5884-C. File Form 5884-C, Work Opportunity Credit for 

Qualified Tax-Exempt Organizations Hiring Qualified Veterans, to 

claim the work opportunity credit for qualified first-year wages 

paid to qualified veterans who begin working for the organization 

on or after November 22, 2011, and before January 1, 2026.

Form 5884-D. File Form 5884-D, Employee Retention Credit for 

Certain Tax-Exempt Organizations Affected by Qualified 

Disasters, to claim the employee retention credit against certain 

payroll taxes if activities of the organization became inoperable 

because of damage from a qualified disaster. See the 

Instructions for Form 5884-D for more information.

Form 6198. File Form 6198, At-Risk Limitations, if the 

organization has a loss from an at-risk activity conducted as a 

trade or business or for the production of income.

Forms 8275 and 8275-R. Taxpayers and income tax return 

preparers file Form 8275, Disclosure Statement, and Form 

8275-R, Regulation Disclosure Statement, to disclose items or 

positions taken on a tax return or that are contrary to Treasury 

regulations (to avoid parts of the accuracy-related penalty or 

certain preparer penalties).

Form 8300. File Form 8300, Report of Cash Payments Over 

$10,000 Received in a Trade or Business, if the organization 

received more than $10,000 in cash or foreign currency in one 

transaction or in a series of related transactions. See Form 8300, 

Instructions for Form 8300, and Regulations section 

1.6050I-1(c).

Form 8582. File Form 8582, Passive Activity Loss Limitations, 

for trusts that have losses (including prior-year unallowed losses) 

from passive activities.

Form 8697. File Form 8697, Interest Computation Under the 

Look-Back Method for Completed Long-Term Contracts, to 

figure the interest due or to be refunded under the look-back 

method of section 460(b)(2). The look-back method applies to 

CAUTION

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Instructions for Form 990-T 5
certain long-term contracts that are accounted for under either 

the percentage method or the completion-capitalized cost 

method.

Form 8810. File Form 8810, Corporate Passive Activity Loss 

and Credit Limitations, for closely held corporations that have 

losses or credits (including prior-year unallowed losses and 

credits) from passive activities.

Form 8865. File Form 8865, Return of U.S. Persons With 

Respect To Certain Foreign Partnerships, if the organization:

1. Controlled a foreign partnership (that is, owned more than 

a 50% direct or indirect interest in the partnership);

2. Owned at least a 10% direct or indirect interest in a 

foreign partnership while U.S. persons controlled that 

partnership;

3. Had an acquisition, disposition, or change in proportional 

interest in a foreign partnership that:

a. Increased its direct interest to at least 10% or reduced its 

direct interest of at least 10% to less than 10%;

b. Changed its direct interest by at least a 10% interest; or

4. Contributed property to a foreign partnership in exchange 

for a partnership interest if:

a. Immediately after the contribution, the organization 

directly or indirectly owned at least a 10% interest in the foreign 

partnership; or

b. The FMV of the property the organization contributed to 

the foreign partnership in exchange for a partnership interest, 

when added to other contributions of property made to the 

foreign partnership by the organization or a related person during 

the preceding 12-month period, exceeds $100,000.

Also, the organization may have to file Form 8865 to report 

certain dispositions by a foreign partnership of property it 

previously contributed to that foreign partnership if it was a 

partner at the time of the disposition. See Form 8865 and its 

separate instructions.

Form 8886. File Form 8886, Reportable Transaction Disclosure 

Statement, to disclose information for each reportable 

transaction in which the organization participated. Form 8886 

must be filed for each tax year that the federal income tax liability 

of the organization is affected by its participation in the 

transaction. The organization may have to pay a penalty if it is 

required to file Form 8886 but doesn’t do so. The following are 

reportable transactions.

• Any listed transaction that is the same as, or substantially 

similar to, tax avoidance transactions identified by the IRS.

• Any transaction offered under conditions of confidentiality for 

which the organization paid an advisor a fee of at least 

$250,000.

• Certain transactions for which the organization has 

contractual protection against disallowance of the tax benefits.

• Any transaction resulting in a loss of at least $10 million in any 

single year or $20 million in any combination of years.

• Certain transactions identified by the IRS in published 

guidance as a “transaction of interest” (a transaction that the IRS 

believes has a potential for tax avoidance or evasion, but hasn’t 

yet been identified as a listed transaction).

Form 8886-T. File Form 8886-T, Disclosure by Tax-Exempt 

Entity Regarding Prohibited Tax Shelter Transaction, to disclose 

information with respect to each prohibited tax shelter 

transaction to which the organization is a party.

Penalties. The organization may have to pay a penalty if it is 

required to disclose a reportable transaction under section 6011 

and fails to properly complete and file Form 8886. The penalty is 

$50,000 ($200,000 if the reportable transaction is a listed 

transaction) for each failure to file Form 8886 with its return or for 

failure to provide a copy of Form 8886 to the Office of Tax Shelter 

Analysis (OTSA). Other penalties, such as an accuracy-related 

penalty under section 6662A, may also apply. See the 

Instructions for Form 8886 for details.

Form 8899. File Form 8899, Notice of Income From Donated 

Intellectual Property, to report income from qualified intellectual 

property.

Form 8925. File Form 8925, Report of Employer-Owned Life 

Insurance Contracts, which must be filed by every applicable 

policyholder owning one or more employer-owned life insurance 

contracts issued after August 17, 2006.

Form 8975. Certain U.S. persons that are the ultimate parent 

entity of a U.S. multinational enterprise group with annual 

revenue for the preceding reporting period of $850 million or 

more are required to file Form 8975. Form 8975 and its 

Schedules A (Form 8975) must be filed with the income tax 

return of the ultimate parent entity of a U.S. multinational 

enterprise group for the tax year in or within which the reporting 

period covered by Form 8975 ends. For more information, see 

Form 8975, Schedule A (Form 8975), and the Instructions for 

Form 8975 and Schedule A (Form 8975).

Form 8978. File Form 8978, Partner's Additional Reporting 

Year Tax, to report adjustments shown on Form 8986, Partner's 

Share of Adjustment(s) to Partnership-Related Items, received 

from a partnership that has elected to push out adjustments to 

partnership-related items to their partners.

Form 8990. File Form 8990, Limitation on Business Interest 

Expense Under Section 163(j), to claim a deduction for business 

interest unless the taxpayer meets certain specified exceptions. 

Also, Form 8990 must be filed by any taxpayer that owns an 

interest in a partnership with current-year or prior-year carryover 

excess business interest expense allocated from the 

partnership.

Form 8991. File Form 8991, Tax on Base Erosion Payments of 

Taxpayers With Substantial Gross Receipts, for any corporation, 

other than a RIC, a REIT, or an S corporation, that has aggregate 

gross receipts of at least $500 million in 1 or more of the 3 

preceding tax years ending with the preceding tax year.

Form 8993. File Form 8993, Section 250 Deduction for 

Foreign-Derived Intangible Income (FDII) and Global Intangible 

Low-Taxed Income (GILTI), for the allowance of a deduction for 

the eligible percentage of FDII. The deduction is allowed only to 

domestic corporations (not including REITs, RICs, and S 

corporations).

Form 8994. File Form 8994, Employer Credit for Paid Family 

and Medical Leave, to figure the employer credit for paid leave.

Form 8995. Refer to Form 8995, Qualified Business Income 

Deduction Simplified Computation, if you are a trust filing Form 

990-T and have unrelated business income, to determine if you 

have qualified business income (QBI) and may be allowed a QBI 

deduction under section 199A. See the instructions for Form 

8995, Part I, line 9.

Form 8995-A. Refer to Form 8995-A. Use this form to figure 

your qualified business income deduction. Use separate 

Schedules A, B, C, and/or D, as appropriate, to help calculate 

the deduction.

Form 8997. File Form 8997, Initial and Annual Statement of 

Qualified Opportunity Fund (QOF) Investments, annually to 

report investments held in a QOF at any time during the year. 

See the instructions for Form 8997.

Accounting Methods

An accounting method is a practice a taxpayer follows to 

determine the year in which to report revenue and expenses for 

federal income tax purposes. An accounting method includes 

6 Instructions for Form 990-T
not only the overall plan of accounting for gross income or 

deductions (for example, an accrual method or the cash receipts 

and disbursement method), but also the treatment of an item 

used in such overall plan. However, a practice that does not 

affect the timing for reporting an item of income or deduction for 

purposes of determining taxable income is not an accounting 

method. A taxpayer, including a tax-exempt entity, adopts any 

permissible accounting method in the first year in which it uses 

the method in determining its taxable income. See Rev. Proc. 

2015-13, 2015-5 I.R.B. 419.

An exempt organization may adopt an accounting 

method not only for purposes of calculating taxable 

income, but also for purposes of determining whether 

taxable income will be subject to federal income tax. For 

example, a tax-exempt entity may adopt an accounting method 

for an item of income from an unrelated trade or business activity 

even if the gross income from the activity is less than $1,000 and 

is therefore not taxed for federal income tax purposes pursuant 

to Regulations section 1.6012-2(e).

An accounting method for an item of income or deduction may 

generally be adopted separately for each of the taxpayer’s trades 

or businesses. However, in order to be permissible, an 

accounting method must clearly reflect the taxpayer’s income. 

Unless instructed otherwise, the organization should generally 

use the same accounting method on the Form 990-T and all 

schedules to report revenue and expenses that it regularly uses 

to keep its books and records.

Accounting method change. Once a taxpayer, including a 

tax-exempt entity, adopts an accounting method for federal 

income tax purposes, the taxpayer must generally request the 

IRS consent before it can change its accounting method (even if 

the year in which the taxpayer seeks to make the change is a 

year in which it generates only tax-exempt income or is 

otherwise not taxed on its taxable income). In most cases, a 

taxpayer requests consent to change an accounting method by 

filing Form 3115, Application for Change in Accounting Method. 

See Rev. Proc. 2015-13, or any successor, for general 

procedures for obtaining consent to change an accounting 

method. See the Instructions for Form 3115 and Pub. 538 for 

more information and exceptions. See Rev. Proc. 2021-34 for 

additional procedures that may apply for obtaining automatic 

consent to change methods of accounting for revenue 

recognition and certain other methods of accounting that may 

affect the accounting for revenue recognition. Also see Rev. 

Proc. 2022-09 for additional procedures that may apply for 

obtaining automatic consent to change certain methods of 

accounting related to small businesses.

Depending on the specific accounting method change being 

requested, the taxpayer may be able to request automatic 

consent. This means that, as long as the taxpayer follows the 

applicable procedures, the taxpayer does not have to wait for 

formal approval by the IRS before applying the new accounting 

method available at Rev. Proc. 2022-14, for the List of Automatic 

Changes for 2022; as modified by Rev. Proc. 2022-23; 2022-18 

I.R.B. 1052, available at Rev. Proc. 2022-23, providing guidance 

allowing late elections under sections 168(j)(8) and 168(l)(3)(D), 

and also providing guidance allowing a late election under 

section 181(a)(1), for a list of accounting method changes that 

may qualify for automatic consent.

For example, a tax-exempt entity that has adopted an 

accounting method for an item of income from an unrelated trade 

or business must generally request consent before it can change 

its method of accounting for that item in any subsequent year. 

This is true regardless of whether gross income from the 

unrelated trade or business is $1,000 or more in such 

subsequent year.

CAUTION

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Alternatively, if a taxpayer, including a tax-exempt entity, has 

not yet adopted an accounting method for an item of income or 

deduction, a change in how the entity reports the item isn’t a 

change in accounting method. In this case, the procedures 

applicable to requests for accounting method changes (the 

requirement to file Form 3115) aren’t applicable. See Rev. Proc. 

2015-13 for the definition of what constitutes an accounting 

method change.

Thus, a tax-exempt entity that has never taken into account 

an item of income or deduction in determining taxable income 

does not have to request consent to change its method of 

reporting that item on its Form 990-T. Additionally, a tax-exempt 

entity that has never been subject to federal income tax on an 

item of income or deduction, but that is required to file a Form 

990-T solely due to owing a section 6033(e)(2) proxy tax, does 

not have to request consent to change its method for reporting 

the item.

Adjustments required when changing an accounting 

method. A taxpayer, including a tax-exempt entity, that changes 

its accounting method must generally calculate and report an 

adjustment to ensure that no portion of the item being changed 

is permanently omitted or duplicated (see section 481(a)). 

However, depending on the specific method change, the IRS 

may provide that an adjustment isn’t required or permitted.

Generally, a taxpayer, including a tax-exempt entity, will 

recognize a positive section 481(a) adjustment (that is, 

an increase to income) ratably over 4 tax years and will 

recognize a negative section 481(a) adjustment in full in the year 

of change. See Rev. Proc. 2015-13 or its successor.

An organization may elect a 1-year adjustment period for a 

positive section 481(a) adjustment that is less than $50,000. See 

the Instructions for Form 3115 for more information and the 

requirements to make this election.

Include any positive section 481(a) adjustment on 

Schedule A (Form 990-T), Part I, line 12 (Other income). If the 

section 481(a) adjustment is negative, report it as a deduction on 

Schedule A (Form 990-T), Part II, line 14 (Other deductions). 

The section 481(a) adjustment should not be reported on Form 

990-T as a negative number.

However, as discussed above, if a tax-exempt entity has not 

yet adopted an accounting method for an item, a change in how 

the entity reports the item for purposes of filing the Form 990-T is 

not a change in accounting method. In this case, an adjustment 

under section 481(a) isn’t required or permitted.

Accounting Period 

The return must be filed using the organization's established 

annual accounting period. If the organization has no established 

accounting period, file the return on the calendar-year basis.

Applicable entities such as state and local governmental 

entities and Indian tribal governments that have not established 

an annual accounting period for purposes of filing a tax return 

should identify their annual accounting period on their first Form 

990-T.

Fiscal year. If the organization has established a fiscal year 

accounting period, use the 2023 Form 990-T to report on the 

organization's fiscal year that began in 2023 and ended 12 

months later. A fiscal year accounting period should normally 

coincide with the natural operating cycle of the organization. Be 

certain to indicate in Item A of Form 990-T, the date the 

organization's fiscal year began in 2023 and the date the fiscal 

year ended in 2024.

To change an accounting period, some organizations may 

make a notation on a timely filed Form 990, 990-EZ, 990-PF, or 

CAUTION

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Instructions for Form 990-T 7
990-T. Others may be required to file Form 1128, Application To 

Adopt, Change, or Retain a Tax Year. For details on which 

procedure applies to your organization, see Rev. Proc. 85-58, 

1985-2 C.B. 740, and the Instructions for Form 1128.

For the short-period return, figure the tax by placing the 

organization's taxable income on an annual basis. If the 

organization changes its accounting period, file Form 990-T for 

the short period that begins with the first day after the end of the 

old tax year and ends on the day before the first day of the new 

tax year. For details, see section 443.

Reporting 990-T Information on Other Returns

Your organization may be required to file an annual information 

return on:

• Form 990, Return of Organization Exempt From Income Tax;

• Form 990-EZ, Short Form Return of Organization Exempt 

From Income Tax;

• Form 990-PF, Return of Private Foundation or Section 4947(a)

(1) Nonexempt Charitable Trust Treated as a Private Foundation; 

or

• Form 5500, Annual Return/Report of Employee Benefit Plan.

If so, include on that information return the unrelated business 

gross income and expenses (but not including the specific 

deduction claimed on Part I, line 8, or any expense carryovers 

from prior years) reported on Form 990-T for the same tax year.

Rounding Off to Whole Dollars

You may round off cents to whole dollars on the organization’s 

return and schedules. If you do round to whole dollars, you must 

round all amounts. To round, drop amounts under 50 cents and 

increase amounts from 50 to 99 cents to the next dollar. For 

example, $1.39 becomes $1 and $2.50 becomes $3. If you have 

to add two or more amounts to figure the amount to enter on a 

line, include cents when adding the amounts and round off only 

the total. If you are entering amounts that include cents, make 

sure to include the decimal point. There is no cents column on 

the form.

Public Inspection Requirements of Section 501(c)

(3) Organizations

Under section 6104(d), a section 501(c)(3) organization that files 

Form 990-T must make its entire annual exempt organization 

business income tax return (including amended returns) 

available for public inspection. See Appendix C. Public 

Inspection of Form 990-T Returns Filed by Section 501(c)(3) 

Organization, later.

Specific Instructions

Period Covered

File the 2023 form for calendar year 2023 or a fiscal year 

beginning in 2023 and ending in 2024. For a fiscal year, fill in the 

tax year information at the top of the form.

The 2023 Form 990-T may also be used if:

• The organization has a tax year of less than 12 months that 

begins and ends in 2024, and

• The 2024 Form 990-T isn't available at the time the 

organization is required to file its return. The organization must 

show its 2024 tax year on the 2023 Form 990-T and take into 

account any tax law changes that are effective for tax years 

beginning after 2023.

Name and Address

The name and address on Form 990-T should be the same as 

the name and address shown on other Forms 990.

Include the suite, room, or other unit number after the street 

address. If the Post Office doesn’t deliver mail to the street 

address and the organization has a P.O. box, show the box 

number instead of the street address.

If the organization receives its mail in care of a third party 

(such as an accountant or an attorney), enter on the street 

address line “C/O” followed by the third party's name and street 

address or P.O. box.

Change of name. If the organization has changed its 

name, it must check the box next to “Name of 

organization” and also provide the following when filing 

this return, if it is:

• A corporation, is incorporated with the state or limited liability 

company treated as a corporation for tax purposes (that is, not a 

disregarded entity)—an amendment to the articles of 

incorporation or articles of organization along with proof of filing 

with the state;

• A trust—an amendment to the trust agreement with the 

trustee(s) signature; or

• An association, or an unincorporated association—an 

amendment to the articles of association, constitution, by-laws, 

or other organizing document with signatures of at least two 

officers/members.

Items A Through L

Item A. If the organization has changed its address since it last 

filed a return, check item A.

If a change in address occurs after the return is filed, use 

Form 8822-B, Change of Address or Responsible 

Party — Business, to notify the IRS of the new address.

Item B. Check the box under which the organization receives its 

tax exemption.

Qualified pension, profit-sharing, and stock bonus plans 

should check the 501 box and enter “a” between the first set of 

parentheses. Do not make an entry in the space between the 

second parentheses.

For other organizations exempt under section 501, check the 

box for 501 and enter the section that describes their tax-exempt 

status, for example, 501(c)(3).

For tax-exempt organizations that don't receive their 

exemption under section 501, use the following guide.

IF you are a THEN check this box

IRA, SEP, or SIMPLE 408(e).

Roth IRA 408A.

Archer MSA 220(e).

Coverdell ESA 530(a).

Qualified State Tuition Program 529(a).

Qualified ABLE Program 529A.

Public colleges and universities that have not obtained 

recognition of exemption under section 501(c)(3), and applicable 

entities that are not described in section 501(a) should not check 

any box in item B.

Item C. Enter the total of the end-of-year assets from the 

organization's books of account.

CAUTION

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TIP

8 Instructions for Form 990-T
Item D. Every organization or entity filing Form 990-T must 

have its own employer identification number (EIN).

No organization or other entity should use the EIN 

of any other organization or entity.

An employees' trust described in section 401(a) and exempt 

under section 501(a) should enter its own trust identification 

number in this block.

An IRA trust enters its own EIN in this block. An IRA trust 

never enters a social security number (SSN) or the trustee's EIN.

An EIN may be applied for in one of the following ways.

• Online. Go to IRS.gov/EIN. The EIN is issued immediately 

once the application information is validated.

• By mailing or faxing Form SS-4, Application for Employer 

Identification Number.

Note. Only organizations located in the United States or U.S. 

territories can use the online application. Foreign organizations 

must use one of the other methods to apply for an EIN in one of 

the following ways.

Item E. If the organization is covered by a group exemption, 

enter the group exemption number.

Item F. Check this box if the organization previously filed a 

Form 990-T return with the IRS for a tax year and is now filing 

another return for the same tax year to amend the previously 

filed return. Also, see Amended return, earlier, for information 

you must include in an amended return.

Item G. Check the box that describes your organization.

Check the box for "6417(d)(1)(A) Applicable entity" only if no 

other checkbox on this line applies. For example, a rural electric 

cooperative exempt under section 501(c)(12) should check the 

box for 501(c) Corporation or 501(c) Trust, (as the case may be). 

Similarly, a public college or university should check the box for 

"State college/university" even if it is filing Form 990-T solely with 

regard to an elective payment election.

“Other trust” includes IRAs, SEPs, SIMPLEs, Roth IRAs, 

Coverdell ESAs, and Archer MSAs.

Section 529 organizations check the 501(c) corporation or 

501(c) trust box depending on whether the organization is a 

corporation or a trust. Also, the box for 529(a) in item B must be 

checked.

Compute your tax in Part II on the appropriate line. If you 

check 501(c) corporation, you must compute your tax on 

Part II, line 1, and leave line 2 blank. If you check 501(c) 

trust, 401(a) trust, or Other trust, you must compute your tax on 

Part II, line 2, and leave line 1 blank.

Item H. Check if filing Form 990-T only to claim a credit from 

Form 8941, to claim a refund shown on Form 2439, or to claim 

the elective payment election amount from Form 3800.

Item I. Check if you are a 501(c)(3) organization filing a 

consolidated return with a 501(c)(2) title holding corporation. 

See Consolidated returns, earlier, for additional information.

Item J. Enter the total number of Schedules A attached to Form 

990-T. An organization with one or more unrelated trades or 

businesses will complete a separate Schedule A for each 

unrelated trade or business.

Complete all needed Schedules A before completing 

Parts I through V of Form 990-T.

Item K. Check “Yes” box if your organization is a corporation 

and either (1) or (2) below applies.

CAUTION

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CAUTION

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TIP

1. The corporation is a subsidiary in an affiliated group 

(defined in section 1504) but isn't filing a consolidated return for 

the tax year with that group.

2. The corporation is a subsidiary in a parent-subsidiary 

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 

considered a member of a controlled group for purposes of item 

K.

Item L. Enter the name and address of the person who has the 

organization's books and records and the telephone number at 

which they can be reached.

Part I. Total Unrelated Business 

Taxable Income

Total of Unrelated Business Taxable Income 

Computed From All Unrelated Trades or 

Businesses

Line 1. Enter the sum of the positive amounts from all 

Schedules A (Form 990-T), Part II, line 18. Don’t include any 

amount from Schedule A (Form 990-T), Part II, line 18, that is 

less than zero in the computation of total unrelated trade or 

business income reported on Part I, line 1.

Line 2. Reserved. Do not enter any amount on this line.

Charitable Contributions

Line 4. Enter contributions or gifts actually paid within the tax 

year to or for the use of charitable and governmental 

organizations described in section 170(c). Also, enter any 

unused contributions carried over from earlier years. The 

deduction for contributions will be allowed whether or not directly 

connected with the conduct of a trade or business. See 

Appendix B. Charitable Contribution Deduction, later.

Deduction for Net Operating Loss Arising in Tax 

Years Beginning Before 2018

Line 6. Enter the smaller of (a) the amount of NOL arising in tax 

years beginning before January 1, 2018, or (b) the amount 

shown on Part I, line 1.

Specific Deduction

Line 8. A specific deduction of $1,000 is allowed except for 

computing the NOL and the net operating loss deduction under 

section 172.

Only one specific deduction may be taken, regardless of the 

number of unrelated businesses conducted. However, a 

diocese, province of a religious order, or convention or 

association of churches is allowed one specific deduction for 

each parish, individual church, district, or other local unit that 

regularly conducts an unrelated trade or business. This applies 

only to those parishes, districts, or other local units that aren't 

separate legal entities but are components of a larger entity 

(diocese, province, convention, or association). Each specific 

deduction will be the smaller of $1,000 or the gross income from 

any unrelated trade or business the local unit conducts. If you 

claim a total specific deduction larger than $1,000, attach a 

statement showing how you figured the amount. The attached 

statement should include the name of each local unit, its gross 

unrelated business income, and its allowable specific deduction 

(which can’t exceed the smaller of $1,000 or the local unit’s 

gross unrelated business income).

Instructions for Form 990-T 9
The diocese, province of a religious order, or convention or 

association of churches must file a return reporting the gross 

income and deductions of all its units that aren't separate legal 

entities. These local units can’t file separate returns because 

they aren't separately incorporated. Local units that are 

separately incorporated must file their own returns and can’t be 

included with any other entity except for a title holding company. 

See Consolidated Returns, earlier.

For details on the specific deduction, see section 512(b)(12) 

and the related regulations.

Section 199A Deduction

For trust filers only. If you are a trust filing Form 990-T and 

have unrelated business income, you may have Qualified 

Business Income (QBI) and may be allowed a QBI deduction 

under section 199A.

Refer to the instructions for Form 8995, or Form 8995-A, (as 

applicable) to determine whether you meet the requirements for 

the QBI deduction and how to complete the applicable form.

Line 9. For purposes of calculating the QBI deduction, the 

taxable income before the QBI deduction is the amount reported 

on Part I, line 7, minus the amount reported on Part I, line 8.

Note. For tax years beginning after 2017, the organization 

determines the unrelated business income separately for each 

unrelated trade or business, and the income for an unrelated 

trade or business can’t be less than zero. Since a loss from an 

unrelated trade or business isn’t included in the UBTI for the tax 

year due to application of section 512(a)(6), when calculating 

QBI, omit items of income, gain, deduction, and loss from any 

unrelated trade or business that operated at a loss. A loss from 

an unrelated trade or business will be carried forward to future 

years when the trust has income (or gain that is subject to 

unrelated business income tax) from the same unrelated trade or 

business and will be used in those years in calculating the QBI. 

Additionally, W-2 wages and unadjusted basis immediately after 

the acquisition (UBIA) of qualified property from an unrelated 

trade or business that operated at a loss for the current tax year 

aren’t used in calculating the limitation on QBI for taxpayers over 

the threshold.

Part II. Tax Computation

Organizations Taxable as Corporations

Line 1. Multiply Part I, line 11, by 21% (0.21).

Trusts

Line 2. Trusts exempt under section 501(a), which otherwise 

would be subject to subchapter J (estates, trusts, etc.), are taxed 

at trust rates. This rule also applies to employees' trusts that 

qualify under section 401(a). Most trusts figure the tax on the 

UBTI amount on Part I, line 11, using the Tax Rate Schedule for 

Trusts, below. If the tax rate schedule is used, enter the tax on 

Part II, line 2, and check the “Tax rate schedule” box. If the trust 

is eligible for the rates on net capital gains and qualified 

dividends, complete Schedule D (Form 1041) and enter on Part 

II, line 2, the tax from Schedule D (Form 1041). Check the 

“Schedule D” box on line 2 and attach Schedule D (Form 1041) 

to Form 990-T.

A trust with more than one unrelated trade or business 

that computes its tax on Schedule D (Form 1041) may 

need to adjust the amount entered on Schedule D (Form 

1041), Part V, line 22, to include only the net gain from 

Schedule D (Form 1041), line 18a (column 2), or line 19 (column 

2), that is included in income on Part I of Form 990-T.

CAUTION

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Tax Rate Schedule for Trusts

If the amount on Part II, line 2, is:

Over— But not over— Tax is:

Of the amount 

over—

$0 $2,900 10% $0

2,900 10,550 $290 + 24% 2,900

10,550 14,450 2,126 + 35% 10,550

14,450 - - - - - 3,491 + 37% 14,450

Proxy Tax

Line 3. To pay the section 6033(e)(2) proxy tax on 

nondeductible lobbying and political expenditures, enter the 

proxy tax on Part II, line 3, and attach a statement showing the 

computation.

Exempt organizations, except section 501(c)(3) and certain 

other organizations, must include certain information regarding 

lobbying expenditures on Form 990. In addition, organizations 

may have to provide notices to members regarding their share of 

dues to which the expenditures are allocable. See the 

Instructions for Form 990 and Rev. Proc. 98-19, 1998-1 C.B. 547, 

for exceptions.

If the organization elects not to provide the notices described 

earlier, it must pay the proxy tax described in section 6033(e)(2). 

If the organization doesn’t include the entire amount of allocable 

dues in the notices, it may have to pay the proxy tax. This tax 

isn't applicable to section 501(c)(3) organizations. Figure the 

proxy tax by multiplying the aggregate amount not included in 

the notices described earlier by 21%. No deductions are 

allowed.

Other Tax Amounts

Line 4. Part II, line 4, is intended to capture any positive tax 

amount that doesn’t have a specific line. An MeF (Internet filing) 

dependency (attachment) captures the detail. Use line 4 to 

report tax amounts not reported on a specific line in Part II 

(excluding tax deferred under section 1294, which is included on 

Part III, line 4).

• Use this line to report the base erosion minimum tax amount 

under section 59A from Form 8991, Part IV, line 5e. Section 59A 

applies to base erosion payments paid or accrued in tax years 

beginning after 2017. See the Instructions for Form 8991 to 

determine if the organization is an applicable taxpayer under 

section 59A(e), and, if the organization is an applicable taxpayer, 

to determine the base erosion minimum tax amount. Enter the 

base erosion minimum tax amount on Part II, line 4.

• Use this line to report the tax and interest on a nonqualified 

withdrawal from a capital construction fund (section 7518).

• Use this line to report the deferred tax amount (defined in 

section 1291(c)(1)) that is the aggregate increase in taxes 

(described in section 1291(c)(2)) on an excess distribution from 

a passive foreign investment company (PFIC) that is taxable as 

UBTI. See the Instructions for Form 8621, Information Return by 

a Shareholder of a Passive Foreign Investment Company or 

Qualified Electing Fund.

• Use this line to report the increase in tax attributable to a 

partner's audit liability. If your organization received Form 8986 

from one or more partnerships that have elected to push out 

adjustments to partnership-related items to their partners, 

complete and attach Form 8978. See the Instructions for Form 

8978. Include any increase in taxes due from Form 8978, line 14, 

on Part II, line 4. If Form 8978 shows a decrease in tax, do not 

report that here. Instead, a negative adjustment should be 

reported in Part III on line 1b.

Unless otherwise indicated, when reporting deferred tax on 

line 4, don't include interest on the tax amount. Instead, report 

such interest as an “other amount due” on Part III, line 3. For 

example, interest on tax deferred under section 1291(c)(1), 

10 Instructions for Form 990-T
determined under section 1291(c)(3) is reported on Part III, 

line 3.

How to report. Attach a statement to Part II, line 4, showing (a) 

a brief description of the type of tax, and (b) the amount. For 

example, if the organization is reporting $100 of tax due from an 

increase in tax attributable to a partner's audit liability (Form 

8978), the attachment would show “Form 8978” and “$100.”

Alternative Minimum Tax 

Line 5. Organizations liable for tax on unrelated business 

taxable income may be liable for alternative minimum tax.

Trusts attach Schedule I, Alternative Minimum Tax–Estate 

and Trusts, and enter any tax from Schedule I on this line.

Corporations may need to complete and attach Form 4626, 

Alterative Minimum Tax–Corporation, and enter any tax from 

Form 4626 on this line. See the Instructions for Form 4626 for 

more information.

Tax on Noncompliant Facility Income

Line 6. There is a tax on a hospital organization’s noncompliant 

facility income. See Regulations section 1.501(r)-2 for more 

information. This tax is an income tax and is separate from the 

excise tax on a failure to meet the community health needs 

assessment requirements of section 501(r)(3) that is reported on 

Form 4720.

Total

Line 7. Add Part II, lines 3, 4, 5, and 6, to Part II, line 1 or 2, 

whichever applies.

Part III. Tax and Payments

Foreign Tax Credit

• Corporations. See Form 1118, Foreign Tax 

Credit—Corporations, for an explanation of when a corporation 

can claim this credit for payment of income tax to a foreign 

country or U.S. possession.

• Trusts. See Form 1116, Foreign Tax Credit (Individual, Estate, 

or Trust), for rules on how the trust computes the foreign tax 

credit.

Line 1a. Complete the form that applies to the organization and 

attach the form to Form 990-T. Enter the credit on this line.

Other Credits

Line 1b. Use line 1b to enter nonrefundable credits not 

identified elsewhere in Part III, line 1. Attach a statement that lists 

the applicable form and the amount of the credit. Such credits 

may include the following.

• Any QEV passive activity credits from prior years allowed for 

the current tax year from Form 8834, Qualified Electric Vehicle 

Credit, line 7. Attach Form 8834.

• The allowable credits from Form 8912, Credit to Holders of 

Tax Credit Bonds, line 12.

• If your organization received Form 8986 from one or more 

partnerships that have elected to push out adjustments to 

partnership-related items to their partners, complete and attach 

Form 8978. See the Instructions for Form 8978. Enter the 

amount of any decrease in taxes due from Form 8978, line 14.

General Business Credit

Line 1c. Enter the organization's total general business credit 

(excluding the work opportunity credit, the employee retention 

credit, the empowerment zone employment credit, the Indian 

employment credit, and the credit for employer differential wage 

payments). See the Instructions for Form 3800 for exceptions.

The organization is required to file Form 3800, General 

Business Credit, to claim any business credit. For a list of 

credits, see Form 3800. Include the allowable credit from Form 

3800, Part II, line 38, on Form 990-T, Part III, line 1c.

Do not enter the net elective payment election amount 

from Form 3800 on line 1c. Enter the elective payment 

election amount from Form 3800 on line 6g.

An organization described in section 501(c) which is 

exempt from tax under section 501(a) should not use 

Form 3800 to claim the refundable small employer tax 

credit for certain health insurance premiums paid on behalf of its 

employees. See the instructions for Part III, line 6f. See the 

instructions to Form 3800.

Credit for Prior-Year Minimum Tax

Line 1d. Use Form 8801 to figure the minimum tax credit and 

any carryforwards of that credit for trusts. For corporations, use 

Form 8827.

Total Credits

Line 1e. Add lines 1a through 1d.

Line 3. Other Amounts Due

Line 3a. Recapture of investment credit. Use line 3a to 

report recapture of investment tax credit amounts required when 

certain investment tax credit property ceases to be qualified 

property before the end of the recapture period. See Form 4255, 

Recapture of Investment Credit.

Line 3b. Recapture of low-income housing credit. If the 

corporation disposed of property (or there was a reduction in the 

qualified basis of the property) for which it took the low-income 

housing credit, and the corporation did not follow the procedures 

that would have prevented recapture of the credit, it may owe a 

tax. See Form 8611, Recapture of Low-Income Housing Credit.

Line 3c. Interest due under the look-back method --

completed long-term contracts. If the corporation used the 

percentage-of-completion method under section 460(b) for 

certain long-term contracts, figure any interest due or to be 

refunded using the look-back method, described in section 

460(b)(2). Use Form 8697 to figure any interest due or to be 

refunded. See the Instructions for Form 8697. Include any 

interest due on line 3c.

Line 3d. Interest due under the look-back method --

income forecast method. If the corporation used the income 

forecast method to depreciate property, it must figure any 

interest due or to be refunded using the look-back method, 

described in section 167(g)(2). Use Form 8866 to figure any 

interest due or to be refunded. See the Instructions for Form 

8866. Include any interest due on line 3d.

Line 3e. Other Additional amounts due may be included in the 

total entered on Part III, line 3. Check the box for “Other” if the 

organization includes any of the items discussed. See How to 

report below for details on reporting these amounts on an 

attached statement.

• Interest on deferred tax attributable to installment sales of 

certain time-shares and residential lots (section 453(l)(3)) and 

certain nondealer installment obligations (section 453A(c)).

• Interest due on deferred gain (section 1260(b)).

• If the organization makes the election to be taxed on its 

income from qualifying shipping activities, complete Form 8902, 

Alternative Tax on Qualifying Shipping Activities, and attach it to 

Form 990-T. See Income from qualifying shipping activities, later.

How to report. If the organization checked the “Other” box, 

attach a statement showing the computation of each item 

included in the total for Part III, line 3e. In addition, identify (a) the 

applicable Code section or form number, (b) the type of tax or 

CAUTION

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CAUTION

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Instructions for Form 990-T 11
interest, and (c) the amount of tax or interest. For example, if the 

organization is reporting $100 of tax due from the recapture of 

the QEV credit, enter “Section 30—QEV recapture tax—$100” 

on the attached statement.

Total Tax

Line 4. Include any deferred tax on the termination of a section 

1294 election applicable to shareholders in a qualified electing 

fund (QEF) in the amount entered on Part III, line 4. See Form 

8621, Part VI, and How to report, later.

Subtract from the total entered on Part III, line 4, any deferred 

tax on the corporation's share of undistributed earnings of a 

QEF. See Form 8621, Part III.

How to report. Attach a statement showing the computation 

of each item included in, or subtracted from, the total on Part III, 

line 4. Specify (a) the applicable Code section, (b) the type of 

tax, and (c) the amount of tax.

Line 5

Section 965

Corporation. For tax years 2021 and later, a corporation will not 

have any section 965(a) inclusions to report. If the organization 

elected to pay its section 965 net tax liability in installments, the 

organization should attach Form 965-B to Form 990-T. However, 

the current-year installment should be paid with a separate 

voucher (which will be mailed to the organization in advance of 

the payment due date). Don’t include the current-year installment 

in the Tax and Payments computation in Part III.

Trust. A trust that has "net 965 tax liability" for the current tax 

year (as described in the Instructions for Form 965-A) should 

enter on line 5 the amount from the current-year line on Form 

965-A, Part II, column (k). If the trust has no net 965 tax liability 

for the current tax year, but has elected to pay its section 965 net 

tax liability in installments, the trust should attach Form 965-A to 

Form 990-T, but should not include the current-year installment 

in the Tax and Payments computation in Part III (as described 

above for corporations).

Estimated Tax Payments

Line 6b. Enter the total estimated tax payments made for the 

tax year.

If an organization is the beneficiary of a trust, and the trust 

makes a section 643(g) election to credit its estimated tax 

payments to its beneficiaries, include the organization's share of 

the estimated tax payments in the total amount entered here. 

Attach a statement showing the amount of the section 643(g) 

credit amount.

Foreign Organizations

Line 6d. Enter the tax withheld on UBTI from U.S. sources that 

isn't effectively connected with the conduct of a trade or 

business within the United States. Attach Form 1042-S, Foreign 

Person's U.S. Source Income Subject to Withholding, or another 

form which verifies the withheld tax reported on Part III, line 6d.

Backup Withholding

Line 6e. Recipients of dividend or interest payments must 

generally certify their correct tax identification number to the 

bank or other payer on Form W-9. If the payer doesn’t get this 

information, it must withhold part of the payments as “backup 

withholding.” If your organization was subject to erroneous 

backup withholding because the payer didn’t realize you were an 

exempt organization and not subject to this withholding, you can 

claim credit for the amount withheld by including it on Part III, 

line 6e. See Backup withholding under Which Parts To 

Complete, earlier.

Credit for Small Employer Health Insurance 

Premiums

Line 6f. An organization described in section 501(c) which is 

exempt from tax under section 501(a) may be eligible to claim 

the refundable small employer tax credit for a percentage of 

certain health insurance premiums paid on behalf of its 

employees.

A tax-exempt eligible small employer can request the 

refundable credit by attaching Form 8941, Credit for Small 

Employer Health Insurance Premiums, showing the calculation 

for the amount of the refundable credit claimed. A tax-exempt 

organization is eligible for the refundable credit if it is an 

organization that is described in section 501(c) which is exempt 

from tax under section 501(a). The organization must keep 

records to substantiate the amount of the credit claimed.

If a tax-exempt eligible small employer is filing Form 

990-T only to request a credit for small employer health 

insurance premiums paid, complete the following steps.

1. Fill in the heading (the area above Part I) except items J 

and K. Check the box for “Credit from Form 8941” in item H .

2. Enter -0- on Part I, line 11, and Part III, line 4.

3. Enter the credit from Form 8941, line 20, on Part III, 

line 6f.

4. Complete Part III, lines 7, 10, and 11, and the signature 

area.

Elective payment election

Line 6g. Enter the elective payment election amount from Form 

3800. See the Instructions for Form 3800. On line 6g, enter the 

total net elective payment election amount from Form 3800, Part 

III, line 6, column (i).

Tax on Undistributed Long-Term Capital Gain by 

RIC or Reit

Line 6h. Enter the elective payment election amount from Form 

3800. See the Instruction for Form 3800.

Enter the amount of tax paid by a regulated investment 

company (RIC) or real estate investment trust (REIT) on 

undistributed long-term capital gains. Attach each Form 2439 

you received from each RIC or REIT of which you are a 

shareholder. If you are filing a composite Form 990-T, see 

Composite Form 990-T under Which Parts To Complete, earlier.

Credit for Federal Excise Tax Paid on Fuels

Line 6i. If you paid a federal excise tax on certain fuels and 

qualify for any of the credits listed below, attach Form 4136 to 

your return and enter the total credit on line 6i.

• The biodiesel or renewable diesel mixture credit

• The alternative fuel credit.

• A credit for certain nontaxable uses (or sales) of fuel during 

your income tax year.

• A credit for blending a diesel-water fuels emulsion.

• A credit for exporting dyed fuels or gasoline blendstocks.

• Substainable aviation fuel (SAF) credit.

See the instructions for Form 4136 for more information about 

these credits.

Note: Form 8849, Claim for Refund of Excise Taxes, may be 

used to claim a periodic refund of excises taxes instead of 

TIP

12 Instructions for Form 990-T
waiting to claim a credit on Form 4136. See the Instructions for 

Form 8849 and Pub. 510, Excise Taxes.

Other Credits

Line 6j. For other credits, check the “Other ” box and provide 

the following information:

• The number of the form used to calculate the credit, or the 

code section that establishes the credit,

• A brief description of the credit, and

• The amount of the credit.

If necessary, provide information required to claim a specific 

credit in Part V, Supplemental Information.

Other credits may include the following:

• The credit for ozone-deleting chemicals. Include any credit the 

organization is claiming under section 4682(g) for taxes paid on 

chemicals under as propellants in metered-dose inhalers.

• The amount of current year net section 965 tax liability, For a 

trust, this amount will be from Form 956-A, Part I, column (d), 

line 4.

Note: Do not use Part III, line 6j, to claim a refund of federal tax 

withheld and shown on Form 1099, Claims for refund of backup 

withholding should be shown on Part III, line 6e.

Estimated Tax Penalty

Line 8. Use Form 2220, Underpayment of Estimated Tax by 

Corporations, to see if the organization owes a penalty and its 

amount. Generally, the organization isn't required to file this form 

because the IRS can figure the amount of any penalty and notify 

the organization. However, even if the organization doesn’t owe 

the penalty, you must complete and attach Form 2220 if either of 

the following applies.

• The annualized income or adjusted seasonal installment 

method is used.

• The organization is a “large organization” computing its first 

required installment based on the prior year's tax.

If you attach Form 2220, check the box on Form 990-T, Part 

III, line 8, and enter the amount of any penalty on this line.

Tax Due 

Line 9. You must pay the tax in full when the return is filed. You 

may pay by EFTPS. For more information about EFTPS, see 

Electronic Deposit Requirement, earlier. Also, you may pay by 

credit or debit card.

To pay by credit or debit card. For information on paying 

your taxes electronically, including by credit or debit card, go to 

IRS.gov/E-pay.

Part IV. Statements Regarding Certain 

Activities and Other Information

Complete all lines in Part IV.

Line 1. Check “Yes” if either item (1) or (2) below applies.

1. At any time during the year the organization had an 

interest in or signature or other authority over a financial account 

in a foreign country (such as a bank account, securities account, 

or other financial account); and

a. The combined value of the accounts was more than 

$10,000 at any time during the year; and

b. The accounts were not with a U.S. military banking facility 

operated by a U.S. financial institution.

2. The organization owns more than 50% of the stock in any 

corporation that would answer “Yes” to item (1).

If the “Yes” box is checked, write the name of the foreign 

country or countries. If the list of foreign country names will not fit 

in the available space, continue the list in Part V, Supplemental 

Information.

Get FinCEN Form 114, Report of Foreign Bank and Financial 

Accounts (FBAR), to see if the organization is considered to 

have an interest in or signature or other authority over a financial 

account in a foreign country (such as a bank account, securities 

account, or other financial account). If the organization is 

required to file this form, file FinCEN Form 114 electronically with 

the Department of the Treasury using FinCEN's BSA E-Filing 

System. Because FinCEN Form 114 isn't a tax form, don't file it 

with Form 990-T.

See FinCEN for more information.

Line 2. The organization may be required to file Form 3520, 

Annual Return To Report Transactions With Foreign Trusts and 

Receipt of Certain Foreign Gifts, if either of the following applies.

• It directly or indirectly transferred money or property to a 

foreign trust. For this purpose, any U.S. person who created a 

foreign trust is considered a transferor.

• It is treated as the owner of any part of the assets of a foreign 

trust under the grantor trust rules.

See the Instructions for Form 3520.

An owner of a foreign trust must ensure that the trust 

files an annual information return on Form 3520-A, 

Annual Information Return of Foreign Trust With a U.S. 

Owner. For details, see the Instructions for Form 3520-A.

Line 3. Report any tax-exempt interest received or accrued in 

the space provided. Include any exempt-interest dividends 

received as a shareholder in a mutual fund or other RIC.

Line 4. Use line 4 to show the amount of the NOL carryover to 

the tax year from tax years prior to 2018 (“pre-2018 NOL”), even 

if some of the loss is used to offset income on this return. The 

amount to enter is the total of all pre-2018 NOLs generated in 

any year prior to 2018, and not used to offset income (either as a 

carryback or carryover) to a tax year prior to 2023. Do not reduce 

the amount by any NOL deduction reported on Part I, line 6.

Line 5. Use the table in line 5 to show the amount of each NOL 

carryover from tax years after 2017 that is attributable to each 

separate trade or business conducted at any time after 2017 

(“siloed post-2017 NOL”) to the tax year. Include the NOL for 

each separate trade or business conducted after 2017, even if a 

Schedule A for any one or more specific trades or businesses 

isn’t included with this return for this tax year. Report the full 

amount of the available NOL for each separate trade or 

business, even if some of the loss is used.

In the first column under line 5, identify the business activity 

code to which each NOL relates. In the second column, enter the 

total amount of each siloed post-2017 NOL generated in any 

prior year after 2017 and not used to offset income (either as a 

carryback or carryover) to a tax year prior to 2023 to offset 

income reported on a Schedule A filed for that separate trade or 

business on this return. Don’t reduce the amount by any NOL 

deduction reported on Schedule A, Part II, line 17. See Separate 

Trades or Businesses, later, for information about changing the 

business activity code associated with a particular trade or 

business, and the effect of such a change on NOLs.

Part V. Supplemental Information

Use Part V to provide the IRS with narrative information required 

for responses to specific questions on Form 990-T, and to 

explain the organization’s operations or responses to various 

questions.

CAUTION

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Instructions for Form 990-T 13
Signature

Corporations. The return must be signed and dated by the 

president, vice president, treasurer, assistant treasurer, or chief 

accounting officer, or by any other corporate officer (such as a 

tax officer) authorized to sign. Receivers, trustees, or assignees 

must also sign and date any return filed on behalf of the 

organization.

Trusts. The return must be signed and dated by the individual 

fiduciary, or by the authorized officer of the trust receiving or 

having custody or control and management of the income of the 

trust. If two or more individuals act jointly as fiduciaries, any one 

of them may sign.

Special rule for IRA trusts. A trustee of IRA trusts may use 

a facsimile signature if all of the following conditions are met.

• Each group of returns sent to the IRS must be accompanied 

by a letter signed by the person authorized to sign the returns 

declaring, under penalties of perjury, that the facsimile signature 

appearing on the returns is the signature adopted by that person 

to sign the returns filed and that the signature was affixed to the 

returns by that person or at that person's direction.

• The letter must also list each return by the name and EIN of 

the IRA trust.

• After the facsimile signature is affixed, no entries on the return 

may be altered other than to correct discernible arithmetic errors.

• A manually signed copy (of the letter submitted to the IRS with 

the returns and a record of any arithmetic errors corrected) must 

be retained on behalf of the IRA trusts listed in the letter and it 

must be available for inspection by the IRS.

Paid preparer. If an officer of the organization filled in its return, 

the paid preparer's space should remain blank. Anyone who 

prepares the return but doesn’t charge the organization should 

not sign the return. Certain others who prepare the return should 

not sign. For example, a regular, full-time employee of the 

organization, such as a clerk, secretary, etc., should not sign.

Generally, anyone who is paid to prepare the organization's 

tax return must sign it and fill in the Paid Preparer Use Only area.

The paid preparer must complete the required preparer 

information and do the following.

• Sign the return in the space provided for the preparer's 

signature.

• Give a copy of the return to the organization.

Note. A paid preparer may sign original returns, amended 

returns, or requests for filing extensions by rubber stamp, 

mechanical device, or computer software program. Also, 

facsimile signatures are authorized.

Paid preparer authorization. If the organization wants to allow 

the IRS to discuss this tax return with the paid preparer who 

signed it, check the “Yes” box in the signature area of the return. 

This authorization applies only to the individual whose signature 

appears in the Paid Preparer Use Only section of its return. It 

doesn’t apply to the firm, if any, shown in that section.

If the “Yes” box is checked, the organization is authorizing the 

IRS to call the paid preparer to:

• Give the IRS any information that is missing from its return;

• Call the IRS for information about the processing of its return 

or the status of its refund or payment(s); and

• Respond to certain IRS notices that the organization has 

shared with the preparer about a math error, offsets, and return 

preparation. The notices won't be sent to the preparer.

The organization isn't authorizing the paid preparer to receive 

any refund check, bind the organization to anything (including 

any additional tax liability), or otherwise represent the 

organization before the IRS. If the organization wants to expand 

the paid preparer's authorization, see Pub. 947, Practice Before 

the IRS and Power of Attorney.

The authorization can’t be revoked. However, the 

authorization will automatically end no later than the due date 

(excluding extensions) for filing next year's Form 990-T.

Enter the paid preparer’s Preparer Tax Identification 

Number (PTIN), not their SSN, in the “PTIN” box in the 

paid preparer’s block. Because Form 990-T is publicly 

disclosable when filed by a 501(c)(3) organization, any 

information entered in this block will be publicly disclosed. For 

more information about PTINs, go to IRS.gov/Taxpros.

General Instructions — Schedule A 

(Form 990-T)

Purpose of the Schedule

Complete a separate Schedule A to report income and allowable 

deductions for each separate unrelated trade or business.

Separate Trades or Businesses

An exempt organization may engage in more than one unrelated 

trade or business. Prior to the enactment of section 512(a)(6), an 

exempt organization deriving gross income from the regular 

conduct of two or more unrelated trades or businesses 

calculated UBTI by determining its aggregate gross income from 

all such unrelated trades or businesses and reducing that 

amount by the aggregate deductions allowed with respect to all 

such unrelated trades or businesses. However, section 512(a)(6) 

changed this calculation for exempt organizations with more than 

one unrelated trade or businesses so that, in the case of any 

exempt organization with more than one unrelated trade or 

business:

• UBTI, including for purposes of determining any NOL 

deduction, shall be computed separately with respect to each 

trade or business and without regard to section 512(b)(12) 

(allowing a specific deduction of $1,000);

• The UBTI of such exempt organization shall be the sum of the 

UBTI so computed with respect to each trade or business, less a 

specific deduction under section 512(b)(12); and

• For purposes of section 512(a)(6)(B), UBTI with respect to 

any such trade or business shall not be less than zero.

Thus, under section 512(a)(6), an exempt organization may 

not aggregate income and deductions from all unrelated trades 

or businesses when calculating UBTI.

An organization determines whether it regularly carries on 

one or more unrelated trades or businesses by applying sections 

511 through 514. Identify each separate trade or business using 

the first two digits of the NAICS two-digit code that most 

accurately describes the unrelated trade or business based on 

the more specific NAICS code, such as at the six-digit level. 

Identify activities in the nature of investments, which aren’t 

described in NAICS, using the appropriate business activity 

code described under Non-NAICS Business Activity Codes, 

later.

An organization will use each NAICS two-digit code only 

once. For example, a hospital organization that operates several 

hospital facilities that include pharmacies that sell goods to the 

general public would include all the pharmacies under the 

NAICS two-digit code for retail trade, regardless of whether the 

hospital organization keeps separate books and records for each 

pharmacy.

Once a two-digit NAICS code or business activity code is 

used for an unrelated trade or business, you should continue to 

use that same code in subsequent tax years. If it is necessary to 

CAUTION

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14 Instructions for Form 990-T
change the two-digit NAICS code or business activity code 

previously used for an unrelated trade or business, you must 

report the change in a statement attached to the Schedule A on 

which the activities are reported. The statement should include 

(1) the two-digit NAICS code or business activity code used in 

the previous tax year; (2) the two-digit NAICS code or business 

activity code used this year and, if filing more than one 

Schedule A, the sequence numbers from item D of the 

applicable Schedule A; and (3) a narrative explanation 

describing the reason for the change.

See Regulations section 1.512(a)-6(h)(4) regarding the 

potential effects on NOL carryforwards upon a change of 

the two-digit NAICS code for an unrelated trade or 

business.

Regulations section 1.512(a)-6(c)(9) describes a 

transition rule for certain partnership interests. The 

transition period ended on the first day of the first tax 

year beginning after December 2, 2020.

Dual-Use Property

Section 512(a)(1) permits an exempt organization with an 

unrelated trade or business to reduce the income from that trade 

or business by the deductions allowed by Chapter 1 that are 

directly connected with the carrying on of such trade or 

business. To be “directly connected” with a trade or business, an 

item of deduction must have a proximate and primary 

relationship to the carrying on of the unrelated trade or business 

generating the gross income. See Regulations section 

1.512(a)-1(a). Expenses, depreciation, and similar items 

attributable solely to the conduct of an unrelated trade or 

business are proximately and primarily related to that trade or 

business and qualify to reduce income from such trade or 

business under section 512(a)(1) to the extent such items meet 

the requirements of section 162 (trade or business expenses), 

section 167 (depreciation), and other relevant provisions. To the 

extent that an exempt organization may have items of deduction 

that are shared between an exempt activity and an unrelated 

trade or business, Regulations section 1.512(a)-1(c) provides 

special rules for allocating such expenses. For example, if 

facilities are used both to carry on exempt activities and to 

conduct unrelated trade or business activities, then expenses, 

depreciation, and similar items attributable to such facilities must 

be allocated between the two uses on a reasonable basis. See 

Regulations section 1.512(a)-1(c). The allocation issues under 

section 512(a)(1) are also relevant under section 512(a)(6) 

because an exempt organization with more than one unrelated 

trade or business must not only allocate indirect expenses 

among exempt and taxable activities, as described in 

Regulations section 1.512(a)-1(c) but also among separate 

unrelated trades or businesses.

The allocation of expenses, depreciation, and similar items 

using an unadjusted gross-to-gross method is not reasonable if 

the cost of providing the good or service is substantially the 

same but the price charged differs between related and 

unrelated activities.

Which Parts To Complete

Complete a separate Schedule A, Parts I and II, for each 

unrelated trade or business. Complete only the lines relevant to 

the unrelated trade or business being reported on that 

Schedule A.

Is gross income more than $10,000? If the sum of the 

amounts in all Schedules A (Form 990-T), Part I, line 13, column 

(A), is more than $10,000, you must complete all Parts of each 

CAUTION

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CAUTION

!

Schedule A that apply to the unrelated trade or business 

reported on that Schedule A.

Is gross income $10,000 or less? If the sum of the amounts in 

all Schedules A (Form 990-T), Part I, line 13, column (A), is 

$10,000 or less, complete Schedule A (Form 990-T) and Form 

990-T as follows.

Schedule A (Form 990-T)

Complete the heading on each Schedule A.

Part I. Complete only the lines that apply.

1. Enter information directly in column (A) on lines 1, 3 

through 5, 12, and 13.

2. Entries for lines 2, and 6 through 11, must be made on the 

Part referenced in the text for the line in Part I. For example, enter 

the amount for Part I, line 2, on Part III, line 8. For Part I, line 6, 

columns (A) and (B), enter the amounts on Part IV, line 3 and 

line 5, respectively.

3. Make entries as necessary to complete the applicable 

lines in column (C).

Part II. Complete lines 15–18, and if necessary, the attachment 

to line 17 (NOL deduction).

Form 990-T

1. Complete all applicable lines in the heading area.

2. Complete all applicable lines as needed to determine the 

appropriate tax, applicable credits, and balance due or refund 

amount.

3. Complete the signature area.

If an entry for a line on Part I or Part II must be made on a 

different Part of Schedule A, complete only the lines in 

the Part that reference a specific line on Part I or Part II. 

Leave all other lines in the applicable Part blank.

Filers with gross income of $10,000 or less, as described 

above, don't have to complete Schedule A, Parts III though X 

(except as described above because certain entries must be 

made in those sections to populate lines in Parts I and II). 

However, refer to the applicable Parts of Schedule A when 

completing Schedule A, Part I, column (A), and in determining 

the deductible expenses to include on Schedule A, Part I, 

line 13, column (B).

Exceptions and Special Rules

Member income of mutual or cooperative electric companies. Income of a mutual or cooperative electric company 

described in section 501(c)(12), which is treated as member 

income under subparagraph (H) of that section, is excluded from 

UBTI.

Income from qualifying shipping activities. The 

organization's gross income doesn’t include income from 

qualifying shipping activities (as defined in section 1356) if the 

organization makes an election under section 1354 on a timely 

filed return (including extensions) to be taxed on its notional 

shipping income (as defined in section 1353) at the highest 

corporate rate. If the election is made, the organization generally 

may not claim any loss, deduction, or credit with respect to 

qualifying shipping activities. An organization making this 

election may also elect to defer gain on the disposition of a 

qualifying vessel under section 1359. Use Form 8902 to figure 

the tax. Include the alternative tax on Form 990-T, Part III, line 3e.

CAUTION

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Instructions for Form 990-T 15
Passive loss and at-risk limitations. Under section 469, 

certain taxpayers, including certain tax-exempt organizations, 

may not deduct a passive activity loss (PAL). Such tax-exempt 

organizations (“affected tax-exempt organizations”) include a 

trust (such as a trust described in section 501(c), a trust 

described in section 401(a), or an IRA), and a corporation if at 

any time during the last half of its tax year more than 50% in 

value of the outstanding stock of the corporation is owned, 

directly or indirectly, by or for not more than five organizations 

that are private foundations under section 509(a) or are 

described in section 401(a) or 501(c)(17) (for example, a stock 

corporation described in section 501(c)(2) with a 401(a) parent 

or private foundation parent).

A PAL occurs when total losses (including prior-year 

unallowed losses) from all the organization’s passive activities 

exceed the total income from all its passive activities. Generally, 

passive activities include (1) trade or business activities in which 

the organization didn’t materially participate for the tax year; and 

(2) rental activities, regardless of your participation. If the 

organization has income or loss from a passive activity, several 

lines on Form 990-T and Schedule A (Form 990-T) may be 

affected by these rules.

PALs can’t be used to offset income from nonpassive 

activities. Passive activity income doesn’t include portfolio 

income. Portfolio income (see Temporary Regulations section 

1.469-2T(c)(3)) is income from a nonpassive activity. Portfolio 

income includes all gross income, other than income derived in 

the ordinary course of a trade or business, that is attributable to 

interest, dividends, annuities, and royalties (by contrast, a bank's 

receipt of interest is in the ordinary course of a trade or business, 

as is a securities dealer's receipt of dividends). Portfolio income 

also includes gain or loss from the disposition of property that 

produces portfolio income or is held for investment (see section 

163(d)(5)). The rule treating portfolio income as not from a 

passive activity doesn’t apply to the extent that income, of a type 

generally regarded as portfolio income, is derived in the ordinary 

course of a trade or business. For example, the business income 

of a bank typically is largely interest. Similarly, a securities 

broker/dealer may earn a substantial portion of the income from 

the business in the form of dividends and gains on sales of 

dividend-bearing instruments. Interest income may also arise in 

the ordinary course of a trade or business with respect to 

installment sales and interest charges on accounts receivable. 

This means that portfolio income may not be reduced by PALs or 

passive activity credits. For example, any portfolio income 

earned by a trust described in section 501(a) that is UBTI (such 

as unrelated debt-financed income) may not be offset by PALs 

from an unrelated trade or business.

Section 469(k) provides that the passive activity limitations 

must be applied separately to items from each publicly traded 

partnership (PTP). A PTP is a partnership whose interests are 

traded on an established securities market or are readily 

tradable on a secondary market (or its substantial equivalent). 

PALs from a PTP may generally be used only to offset income or 

gain from passive activities of the same PTP. This means that a 

partner in a PTP may not use PALs and passive activity credits 

from a PTP to offset income from other sources, including 

passive activity income from another PTP. Such PALs and 

passive activity credits aren't allowed for the tax year.

Generally, PALs are subject to other limitations (for example, 

basis and at-risk limitations) before they are subject to the PAL 

limitations. For example, the at-risk rules under section 465 

generally prohibit trusts and corporations that are affected 

tax-exempt organizations from claiming losses from activities in 

excess of the taxpayer’s amount at risk in the activity.

An affected tax-exempt organization may need to attach Form 

6198 and either Form 8582 or Form 8810. For more information 

on these rules, see Pub. 925, Passive Activity and At-Risk Rules.

How to report income received from a payment 

card and third-party network transaction. An 

organization that receives a Form 1099-K reporting a 

“gross amount” received from payment card and third-party 

network transactions in the tax year should report these amounts 

in the same manner as if the payments weren’t reported on a 

Form 1099-K. There isn’t any one specific line on which to report 

an amount from Form 1099-K; the correct line should be 

determined based on the nature of the payments. Some 

payments received may constitute unrelated business income; 

see the instructions below to determine the appropriate line. For 

instance, if some of the payments are sales income from an 

unrelated business, then those payments would be reported on 

Part I, line 1a. Retain Form 1099-K with your other records.

Specific Instructions—Schedule A 

(Form 990-T)

Items A Through E

Item A. Enter the same name as entered in the heading area of 

Form 990-T.

Item B. Enter the same EIN as entered in item D of Form 990-T.

Item C. On each Schedule A, enter the business activity code 

that best describes the organization's unrelated trade or 

business reported on that Schedule A. Modernized e-File 

requires a 6-digit numerical entry for item C. Unless you are 

using a 6-digit non-NAICS business activity code, you should 

enter the 2 digits of the NAICS code in the first two positions and 

then enter 4 zeros to complete the entry. For example, if the 

2-digit business activity code 45 (for retail trade) best describes 

your unrelated trade or business, enter “450000” in item C. See 

Business Activity Codes, later, for more information about 

business activity codes.

Part I. Unrelated Trade or Business 

Income

Gross Receipts or Sales

Line 1a. Enter the gross receipts from an unrelated trade or 

business regularly conducted that involves the sale of goods or 

performance of services.

A section 501(c)(7) social club would report its 

restaurant and bar receipts from nonmembers on 

Schedule A, Part I, line 1, but would report its investment 

income on Schedule A, Part I, line 9, and on Schedule A, Part 

VII.

Advance payments. In general, advance payments are 

reported in the year of receipt. To report income from long-term 

contracts, see section 460. For rules that allow a limited deferral 

of advance payments beyond the current tax year, see section 

451(c). Also, see Regulations sections 1.451-8(c), (d), and (e). 

For applicability dates, see Regulations section 1.451-8(h). For 

information on adopting or changing to a permissible method for 

reporting advance payments for services and certain goods by 

an accrual method corporation, see the Instructions for Form 

3115. Also, see Rev. Proc. 2021-34.

Installment sales. Generally, the installment method cannot be 

used for dealer dispositions of property. A “dealer disposition” is 

(a) any disposition of personal property by a person who 

regularly sells or otherwise disposes of personal property of the 

same type on the installment plan, or (b) any disposition of real 

property held for sale to customers in the ordinary course of the 

taxpayer's trade or business.

CAUTION

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TIP

16 Instructions for Form 990-T
These restrictions on using the installment method don't 

apply to dispositions of property used or produced in a farming 

business or sales of time-shares and residential lots for which 

the organization elects to pay interest under section 453(l)(3).

For sales of time-shares and residential lots reported under 

the installment method, the organization's income tax is 

increased by the interest payable under section 453(l)(3).

Enter on Schedule A, Part I, line 1a and line 3, the gross profit 

on collections from installment sales for any of the following.

• Dealer dispositions of property before March 1, 1986.

• Dispositions of property used or produced in the trade or 

business of farming.

• Certain dispositions of time-shares and residential lots 

reported under the installment method.

Attach Form 6252 to show information about each installment 

sale.

Nonaccrual experience method. Accrual method 

organizations aren't required to accrue certain amounts to be 

received from the performance of services that, on the basis of 

their experience, won't be collected, if:

• The services are in the field of health, law, engineering, 

architecture, accounting, actuarial science, performing arts, or 

consulting; or

• The organization's average annual gross receipts for the 3 

prior tax years doesn’t exceed $29 million.

This provision doesn’t apply to any amount if interest is 

required to be paid on the amount or if there is any penalty for 

failure to timely pay the amount. See Regulations section 

1.448-3. Organizations that qualify to use the nonaccrual 

experience method should attach a statement showing total 

gross receipts, amounts not accrued as a result of the 

application of section 448(d)(5), and the net amount accrued. 

Enter the net amount on Schedule A, Part I, line 1a.

Gain or loss on disposition of certain brownfield property.

Gain or loss from the qualifying sale, exchange, or other 

disposition of a qualifying brownfield property (as defined in 

section 512(b)(19)(C)), which was acquired by the organization 

after 2004, is excluded from unrelated business taxable income 

and is excepted from the debt-financed rules for such property. 

See sections 512(b)(19) and 514(b)(1)(E).

Capital Gain Net Income

Line 4a. Generally, organizations required to file Form 990-T 

(except organizations described in sections 501(c)(7), (9), and 

(17)) aren't taxed on the net gains from the sale, exchange, or 

other disposition of property. However, net capital gains on 

debt-financed property, capital gains on cutting timber, and 

ordinary gains on sections 1245, 1250, 1252, 1254, and 1255 

property are taxed. See Form 4797, Sales of Business Property, 

and its instructions for additional information.

Also, any capital gain or loss passed through from an S 

corporation or any gain or loss on the disposition of S 

corporation stock by a qualified tax-exempt organization (see S 

Corporations, later) is taxed as a capital gain or loss and 

reported on Part I, line 4.

Capital gains and losses should be reported by a trust on 

Schedule D (Form 1041), Capital Gains and Losses, and by a 

corporation on Schedule D (Form 1120), Capital Gains and 

Losses (and Form 8949, Sale and Other Dispositions of Capital 

Assets). Schedule D of Form 1041 or Form 1120 (and Form 

8949, if applicable) must be attached to Form 990-T.

If you deferred a capital gain into a QOF, you must attach 

Schedule D, Form 8949, and Form 8997 to your Form 990-T. You 

will need to annually file Form 8997 until you dispose of the 

investment. See the Instructions for Form 8997.

An organization that transfers securities it owns for the 

contractual obligation of the borrower to return identical 

securities recognizes no gain or loss on that exchange or on the 

subsequent receipt of identical securities in satisfaction of the 

contractual obligation. To qualify for this treatment, the 

organization must lend the securities under an agreement that 

requires:

1. The return of identical securities;

2. The payment of amounts equivalent to the interest, 

dividends, and other distributions that the owner of the securities 

would normally receive; and

3. The risk of loss or opportunity for gain not be lessened.

See sections 512(a)(5) and 1058(b) for details.

Debt-financed property disposition. The amount of gain or 

loss to be reported on the sale, exchange, or other disposition of 

debt-financed property is the same percentage as the highest 

acquisition indebtedness for the property for the 12-month 

period before the date of disposition is to the average adjusted 

basis of the property. The percentage may not be more than 

100%. See the instructions for Schedule A, Part V, line 5, to 

determine adjusted basis and average adjusted basis.

If debt-financed property is depreciable or depletable 

property, the provisions of sections 1245, 1250, 1252, 1254, and 

1255 must be considered first.

Example. On January 1, 2022, an exempt educational 

corporation, using $288,000 of borrowed funds, purchased an 

office building for $608,000. The only adjustment to basis was 

$29,902 for depreciation (straight line method under MACRS 

over the 39-year recovery period for nonresidential real 

property). The corporation (section 501(c)(3) organization) sold 

the building on December 31, 2023, for $640,000. At the date of 

sale, the adjusted basis of the building was $578,098 ($608,000 

− $29,902) and the indebtedness remained at $288,000. The 

adjusted basis of the property on the first day of the year of 

disposition was $593,037. The average adjusted basis is 

$585,568 (($593,037 + $578,098) ÷ 2). The debt/basis 

percentage is 49% ($288,000 ÷ $585,568).

The taxable gain is $30,332 (49% × ($640,000 − $578,098)). 

This is a long-term capital gain. A corporation should enter the 

gain on Schedule D (Form 1120), Part II, line 8. A trust should 

enter the gain on Schedule D (Form 1041), Part II, line 8, if 

applicable. In either scenario (a corporation or a trust), the 

educational organization must attach a statement to Form 990-T, 

in addition to the Schedule D, showing how the gain was figured 

along the lines described in this example, if the details weren’t 

provided with the Schedule D.

Disposition of property received from taxable subsidiary 

and used in unrelated business. A taxable 80%-owned 

subsidiary corporation of one or more tax-exempt entities is 

generally subject to tax on a distribution in liquidation of its 

assets to its exempt parent (or parents). See section 337. The 

assets are treated as if sold at FMV.

“Tax-exempt entities” for this purpose include organizations 

described in sections 501(a), 529, 529A, and 115; charitable 

remainder annuity trusts or unitrusts; U.S. (including states) and 

foreign governments; Indian tribal governments and certain 

corporations; international organizations; and similar non-taxable 

organizations.

A taxable corporation that transfers substantially all of its 

assets to a tax-exempt entity in a transaction that otherwise 

qualifies for nonrecognition treatment must recognize gain on the 

transaction as if it sold the assets at FMV. However, such a 

transfer isn't taxable if it qualifies as a like-kind exchange under 

section 1031 or an involuntary conversion under section 1033. In 

such a case, the built-in appreciation is preserved in the 

replacement property received in the transaction. A “taxable 

Instructions for Form 990-T 17
corporation” is any corporation that isn't a tax-exempt entity as 

defined above, including an S corporation.

A corporation that changes status from taxable to tax-exempt 

is generally treated as if it transferred all of its assets to a 

tax-exempt entity immediately before the change in status (thus 

subjecting it to the tax on a deemed sale for FMV). This rule 

doesn’t apply where the taxable corporation becomes exempt 

within 3 years of formation (within 7 years of formation for section 

501(c)(7) organizations), or had previously been exempt and 

within several years (generally a period of 3 years) regains 

exemption, unless the principal purpose of the transactions is to 

avoid the tax on the change in status.

In the transactions described above, the taxable event is 

deferred for property that the tax-exempt entity immediately uses 

in an unrelated business. If the tax-exempt parent later disposes 

of the property, then any gain (not in excess of the amount not 

recognized) is included in the parent’s UBTI. If there is partial 

use of the assets in unrelated business, then there is partial 

recognition of gain or loss with respect to the assets not so used. 

Property is treated as disposed if the tax-exempt entity no longer 

uses it in an unrelated business.

Losses on the transfer of assets to a tax-exempt entity are 

disallowed if part of a plan having a principal purpose of 

recognizing losses.

Net Gain or (Loss)

Line 4b. Show gains and losses on other than capital assets on 

Form 4797. Enter on this line the net gain or (loss) from Form 

4797, Part II, line 17.

An exempt organization using Form 4797 to report ordinary 

gain on sections 1245, 1250, 1252, 1254, and 1255 property will 

include only depreciation, amortization, or depletion allowed or 

allowable in figuring UBTI or taxable income of the organization 

(or a predecessor organization) for a period when it was not 

exempt.

Capital Loss Deduction for Trusts

Line 4c. If a trust has a net capital loss, it is subject to the 

limitations of Schedule D (Form 1041). Enter on this line the loss 

figured on Schedule D (Form 1041).

Income or (Loss) From a Partnership or an S 

Corporation

Line 5. See Regulations section 1.512(a)-6 for rules permitting 

the aggregation of income (and directly connected deductions) 

of certain partnership interests.

Also, for trusts and certain corporations, there are limitations 

on income and losses (including from a partnership or an S 

corporation) under section 469 (the PAL and credit limitation 

rules) and section 465 (at-risk limitations). For more information 

on these rules, see the discussion of the application of the 

passive activity loss and at-risk limitations to affected tax-exempt 

organizations in the introductory instructions under Part I. 

Unrelated Trade or Business Income, earlier.

Partnerships

If the organization is a partner in a partnership conducting an 

unrelated trade or business, enter the organization's share 

(whether or not distributed) of the partnership's income or loss 

from the unrelated trade or business. The organization is 

required to notify the partnership of its tax-exempt status. Figure 

the gross income and deductions of the partnership in the same 

way you figure unrelated trade or business income the 

organization earns directly.

Attach a statement to this return showing the organization's 

share of the partnership's gross income from the unrelated trade 

or business, and its share of the partnership deductions directly 

connected with the unrelated gross income.

S Corporations

Qualified tax-exempt organizations can be shareholders in an S 

corporation without the S corporation losing its status as an S 

corporation. Qualified tax-exempt organizations that hold stock 

in an S corporation treat their stock interest as an interest in an 

unrelated trade or business. All items of income, loss, or 

deduction that the organization receives as a shareholder of the 

S corporation are taken into account in Schedule A, Part I, line 5, 

in figuring UBTI and not reported on another line of Schedule A 

(Form 990-T) that otherwise would apply, except capital gains 

and losses, which are reported on Schedule A, Part I, line 4. 

Report on Schedule A, Part I, line 4, any gain or loss on the 

disposition of S corporation stock.

Qualified tax-exempts. A qualified tax-exempt is an 

organization that is described in section 401(a) (qualified stock 

bonus, pension, and profit-sharing plans) or 501(c)(3) and 

exempt from tax under section 501(a).

Exception. Employee stock ownership plans (ESOPs) don't 

follow these S corporation rules if the S corporation stock is an 

employer security, as defined in section 409(l).

Attach a statement to this return showing the qualified 

tax-exempt's share of all items of income, loss, or deduction. 

Combine the income, loss, and deductions (except for the capital 

gains and losses) on the statement. If you hold stock in more 

than one S corporation, total the combined amounts. Show 

capital gains and losses separately and include them on 

Schedule A, Part I, line 4a.

Rent Income

Line 6. Enter the amount computed on Part IV, line 3, on Part I, 

line 6, column (A). Enter the amount computed on Part IV, line 5, 

on Part I, line 6, column (B).

Unrelated Debt-Financed Income

Line 7. Enter the amount computed on Part V, line 8, on Part I, 

line 7, column (A). Enter the amount computed on Part V, line 10, 

on Part I, line 7, column (B).

Interest, Annuities, Royalties, and Rents From a 

Controlled Organization

Line 8. Enter the sum of columns 5 and 10 from Part VI on Part 

I, line 8, column (A). Enter the sum of columns 6 and 11 from 

Part VI on Part I, line 8, column (B).

Investment Income of a Section 501(c)(7), (9), or 

(17) Organization

Line 9. Enter the sum of amounts from Part VII, column 2, on 

Part I, line 9, column (A). Enter the sum of amounts in Part VII, 

column 5, on Part I, line 9, column (B).

Exploited Exempt Activity Income, Other Than 

Advertising Income

Line 10. Enter the amount computed on Part VIII, line 2, on Part 

I, line 10, column (A). Enter the amount computed on Part VIII, 

line 3, on Part I, line 10, column (B).

Advertising Income

Line 11. Enter the amount computed on Part IX, line 2, on Part I, 

line 11, column (A). Enter the amount computed on Part IX, 

line 3, on Part I, line 11, column (B).

18 Instructions for Form 990-T
Other Income

Line 12. Enter on Part I, line 12, any item of unrelated business 

income from a particular trade or business that isn't reportable 

elsewhere on the return. Attach a statement describing the 

sources of the other income and their amounts. Such amounts 

may include:

• Recoveries of bad debts deducted in earlier years under the 

specific charge-off method;

• The amount from Form 6478, Biofuel Producer Credit (if 

applicable);

• The amount from Form 8864, Biodiesel, Renewable Diesel, or 

Sustainable Aviation Fuels Credit (if applicable); and

• Proceeds received from employer-owned life insurance 

contracts issued after August 17, 2006 (complete and attach 

Form 8925); and

• The amount of payroll tax credit taken by an employer on its 

2023 employment tax returns (Forms 941, 943, and 944) for 

qualified paid sick and qualified paid family leave under the 

FFCRA and the ARP (both the nonrefundable and refundable 

portions). These amounts must be included in gross income for 

the tax year that includes the last day of the calendar quarter 

with respect to which the credit is allowed.

Note. A credit is available only if the leave was taken sometime 

after March 31, 2020 and before October 1, 2021, and only after 

the qualified leave wages were paid, which might, under certain 

circumstances, not occur until a quarter after September 30, 

2021, including quarters during 2023.

Organizations described in section 501(c)(19). Enter the 

net income from an insurance business that was not properly set 

aside. These organizations may set aside income from 

payments received for life, sickness, accident, or health 

insurance for members of the organization or their dependents.

1. To provide for the payment of insurance benefits.

2. For a purpose specified in section 170(c)(4) (religious, 

charitable, scientific, literary, educational, etc.).

3. For administrative costs directly connected with benefits 

described in (1) and (2) above.

Amounts set aside and used for purposes other than those in 

(1), (2), or (3) above must be included in UBTI for the tax year if 

they were previously excluded from taxable income.

Any amount spent for a purpose described in section 170(c)

(4) is first considered paid from funds earned by the organization 

from insurance activities if the income isn't used for the 

insurance activities.

Expenditures for lobbying aren't considered section 170(c)(4) 

expenses.

Income from property financed with qualified 501(c)(3) 

bonds. If any part of the property is used in a trade or business 

of any person other than a section 501(c)(3) organization or a 

governmental unit, and such use isn't consistent with the 

requirement for qualified 501(c)(3) bonds under section 145, the 

section 501(c)(3) organization is considered to have received 

unrelated business income in the amount of the greater of the 

actual rental income or the fair rental value of the property for the 

period it is used. No deduction is allowed for interest on the 

private activity bond. Report the greater of the actual rent or the 

fair rental value on Schedule A, Part I, line 12. Report allowable 

deductions on Schedule A, Part II. See sections 150(b)(3) and 

(c).

PFIC shareholders. If the organization is a direct or indirect 

shareholder of a PFIC within the meaning of section 1297, it may 

have income tax consequences under section 1291 upon the 

disposition of the PFIC stock or on the receipt of an excess 

distribution from the PFIC, described in section 1291(a). The 

organization may have current income under section 1293 if the 

PFIC is a QEF with respect to the organization. The organization 

may also have current income under section 1296 if it makes a 

section 1296 mark-to-market election with respect to the PFIC 

stock.

Include on Schedule A, Part I, line 12, the portion of an 

excess distribution (or gain treated as an excess distribution), 

section 1293 inclusion, or section 1296 inclusion that is taxable 

as UBTI. See Form 8621.

See the instructions for Form 990-T, Part II, line 4, for 

reporting the deferred tax amount that may be owed by the 

organization with respect to an excess distribution (or gain 

treated as an excess distribution).

Line 13. Total Unrelated Trade or Business 

Income

Use the amount from Schedule A, Part I, line 13, column (C), in 

the computation of UBTI in Part II.

Part II. Deductions Not Taken 

Elsewhere

If the aggregate sum of the amounts on all Schedules A (Form 

990-T), Part I, line 13, column (A), is $10,000 or less, you don't 

have to complete Schedule A, Part II, lines 1 through 14. 

However, you must complete the remainder of Schedule A, Part 

II and include the larger of each total from Schedule A, Part II, 

line 18, or zero, in the computation of the amount reported on 

Part I, line 1, of Form 990-T.

Note. Only expenses directly connected with the unrelated 

trade or business income reported on the Schedule A for that 

particular unrelated trade or business may be deducted on that 

Schedule A (see Directly connected expenses in Appendix A). 

Don't separately include in Schedule A, Part II, any expenses 

that are reported in Schedule A, Parts III through IX, other than 

excess exempt expenses entered on Schedule A, Part II, line 12, 

and excess readership costs entered on Schedule A, Part II, 

line 13. For example, officers' compensation allocable to 

advertising income is reported on Schedule A, Part IX, only and 

shouldn’t be included on Schedule A, Part X, or Schedule A, Part 

II, line 1.

Limitations on Deductions

The following items discuss certain areas in which the deduction 

may be limited.

Activities Lacking a Profit Motive

In some instances, it is necessary to report income whether or 

not it comes from a trade or business (including interest, 

annuities, royalties, and rents from controlled organizations, and 

income of a section 501(c)(7), (9), or (17) organization other than 

exempt function income). If income is attributable to an activity 

lacking a profit motive, then a net loss from the activity can’t be 

claimed on Form 990-T. Therefore, in Part I, column (B), and Part 

II, the total of deductions for expenses directly connected with 

income from an activity lacking a profit motive is limited to the 

amount of that income. Generally, an activity lacking a profit 

motive is one that isn't conducted for the purpose of producing a 

profit or one that has consistently produced losses when both 

direct and indirect expenses are taken into account.

Deductions Related to Property Leased to 

Tax-Exempt Entities

For property leased to a governmental or other tax-exempt entity, 

or in the case of property acquired after March 12, 2004, that is 

Instructions for Form 990-T 19
treated as tax-exempt-use property other than by reason of a 

lease, the organization may not claim deductions related to the 

property when they exceed the organization's income from the 

lease payments. Amounts disallowed may be carried over to the 

next year and treated as a deduction concerning the property. 

See section 470.

Transactions Between Related Taxpayers

Generally, an accrual basis taxpayer may deduct business 

expenses and interest owed to a related party only in the year 

the payment is included in the income of the related party. See 

sections 163(e)(3) and 267 for limitations on deductions for 

unpaid interest and expenses.

Preference Items

Corporations may be required to adjust deductions for depletion 

of iron ore and coal, intangible drilling and exploration and 

development costs, and the amortizable basis of pollution control 

facilities. See section 291 to determine the amount of the 

adjustment.

Section 263A Uniform Capitalization Rules

These rules require organizations to capitalize or include as 

inventory cost certain costs incurred in connection with the 

following.

• The production of real property and tangible personal property 

held in inventory or held for sale in the ordinary course of 

business.

• Real property or personal property held in inventory (tangible 

and intangible) acquired for resale.

• The production of real property and tangible personal property 

produced by the organization for use in its trade or business or in 

an activity engaged in for profit.

Tangible personal property produced by an organization 

includes a film, sound recording, videotape, book, or similar 

property.

Indirect expenses. Organizations subject to the section 263A 

uniform capitalization rules are required to capitalize direct costs 

and an allocable part of most indirect costs (including taxes) that 

benefit the assets produced or acquired for resale or are 

incurred by reason of the performance of production or resale 

activities.

For inventory, some of the indirect expenses that must be 

capitalized are:

• Administration expenses;

• Taxes;

• Depreciation;

• Insurance;

• Compensation paid to officers attributable to services;

• Rework labor; and

• Contributions to pension, stock bonus, and certain 

profit-sharing, annuity, or deferred compensation plans.

Regulations section 1.263A-1(e)(3) specifies other indirect 

costs that relate to production or resale activities that must be 

capitalized and those that may be currently deductible.

Interest expense. Interest expense paid or incurred during the 

production period of designated property must be capitalized 

and is governed by special rules. See Regulations section 

1.263A-8 through 1.263A-15.

When are section 263A capitalized costs deductible? The 

costs required to be capitalized under section 263A aren't 

deductible until the property (to which the costs relate) is sold, 

used, or otherwise disposed of by the organization.

Exceptions. Section 263A doesn’t apply to:

• Personal property acquired for resale if the organization's 

average annual gross receipts for the 3 prior tax years were $10 

million or less;

• Timber;

• Most property produced under long-term contract;

• Certain property produced in a farming business;

• Research and experimental costs under section 174;

• Geological and geophysical costs amortized under section 

167(h);

• 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.

See Regulations sections 1.263A-1 through 1.263A-3.

Travel, Meals, and Entertainment 

Subject to the limitations and restrictions discussed below, an 

organization can deduct ordinary and necessary travel, meals, 

and non-entertainment expenses paid or incurred in its trade or 

business. Generally, entertainment expenses, membership 

dues, and facilities used in connection with these activities can’t 

be deducted. In addition, no deduction is generally allowed for 

qualified transportation fringe benefits. Special rules apply to 

deductions for gifts, luxury water travel, and convention 

expenses. See section 274 and Pub. 463, Travel, Gift, and Car 

Expenses.

Qualified transportation fringes (QTFs). Generally, no 

deduction is allowed under section 274(a)(4) for QTFs provided 

by employers to their employees. QTFs are defined in section 

132(f)(1) and include:

• Transportation in a commuter highway vehicle between the 

employee's residence and place of employment,

• Any transit pass, and

• Qualified parking.

See section 274, Pub. 15-B, and Pub. 535 for details.

Travel. The organization can’t deduct travel expenses of any 

individual accompanying an organization's officer or employee, 

including a spouse or dependent of the officer or employee, 

unless:

• That individual is an employee of the organization, and

• Their travel is for a bona fide business purpose and would 

otherwise be deductible by that individual.

Meals. Generally, the organization can deduct only 50% of the 

amount otherwise allowable for non-entertainment-related meal 

expenses paid or incurred in an unrelated trade or business. 

Meals not separately stated from entertainment are generally not 

deductible. In addition (subject to exceptions under section 

274(k)(2)):

• Meals mustn’t be lavish or extravagant, and

• An employee of the organization must be present at the meal.

Membership dues. The organization can deduct amounts paid 

or incurred for membership dues in civic or public service 

organizations, professional organizations (such as bar and 

medical associations), business leagues, trade associations, 

chambers of commerce, boards of trade, and real estate boards. 

However, no deduction is allowed if a principal purpose of the 

organization is to entertain or provide entertainment facilities for 

members or their guests. In addition, organizations can’t deduct 

membership dues in any club organized for business, pleasure, 

recreation, or other social purpose. This includes country clubs, 

golf and athletic clubs, airline and hotel clubs, and clubs 

operated to provide meals under conditions favorable to 

business discussion.

20 Instructions for Form 990-T
Entertainment facilities. The organization can’t deduct an 

expense paid or incurred for use of a facility (such as a yacht or 

hunting lodge) for an activity usually considered entertainment, 

amusement, or recreation.

Amounts treated as compensation. The organization may 

generally be able to deduct otherwise non-deductible travel, 

meals, and entertainment expenses if the amounts are treated 

as compensation and reported on Form W-2 for an employee or 

Form 1099-NEC for an independent contractor and if the total 

amount of such compensation isn't unreasonable.

Reducing Certain Expenses for Which Credits 

Are Allowable

If the organization claims certain credits, it may need to reduce 

the otherwise allowable deductions for expenses used to figure 

the credit. This applies to credits such as the following.

• Disabled access credit.

• Employer credit for social security and Medicare taxes paid on 

certain employee tips.

• Credit for employer-provided childcare facilities and services.

• Orphan drug credit.

• Credit for small employer pension plan startup costs.

• Employer credit for paid family and medical leave.

If the organization has any of these credits, figure each 

current-year credit before figuring the deduction for expenses on 

which the credit is based.

Business Startup and Organizational Costs

For business startup and organizational costs paid or incurred 

after September 8, 2008, an organization can deduct up to 

$5,000 of such costs in the year it begins business (unless the 

organization elects to capitalize the full amount of such costs). 

The $5,000 deduction is reduced (but not below zero) by the 

amount the total costs exceed $50,000. If the total costs are 

$55,000 or more, the deduction is reduced to zero. Any costs not 

deducted must be amortized, as explained below.

Note. For startup and organizational costs paid or incurred after 

September 8, 2008, the organization isn't required to attach a 

statement or specifically identify the amount deducted for the 

election under sections 195(b) and 248(a) to be effective. It is a 

deemed election. Whether an organization deducts a portion of 

its startup and organizational costs under Regulations sections 

1.195-1 and 1.248-1 or elects to amortize the full amount of such 

costs, its election is irrevocable. For startup and organizational 

costs paid or incurred after October 22, 2004, and before 

September 9, 2008, an organization must generally attach the 

statement required by Regulations sections 1.195-1(b) and 

1.248-1(c) to make the election to deduct a portion of such costs 

(as explained above). This election is irrevocable. However, an 

organization can apply the provisions of these regulations to 

costs paid or incurred after October 22, 2004.

Amortization. Any costs not deducted under the above rules 

must be amortized ratably over the 180-month period, beginning 

with the month the organization begins business. See the 

Instructions for Form 4562, Depreciation and Amortization, for 

details. If the association elected to amortize business startup 

and organizational costs paid or incurred before October 23, 

2004, over a period of 60 months or more, it must continue to 

amortize those costs over the elected amortization period. 

Report the deductible amount of these costs and any 

amortization on Schedule A, Part II, line 14. For amortization that 

began during the tax year, complete and attach Form 4562.

Repairs and Maintenance

Line 3. Enter the cost of incidental repairs and maintenance not 

claimed elsewhere on the return, such as labor and supplies, 

that don't add to the value or appreciably prolong the life of the 

property.

Bad Debts

Line 4. Enter the total receivables from an unrelated trade or 

business that were previously included in taxable income and 

that became worthless in whole or in part during the tax year.

Interest 

Line 5. Attach a separate statement listing the interest being 

claimed on this line.

Interest allocation. If the proceeds of a loan were used for 

more than one purpose (for example, to purchase a portfolio 

investment and to acquire an interest in a passive activity), an 

interest allocation must be made. See Temporary Regulations 

section 1.163-8T for the interest allocation rules.

Tax-exempt interest. Don't include interest on indebtedness 

incurred or continued to purchase or carry obligations on which 

the interest income is totally exempt from income tax. For 

exceptions, see section 265(b).

Prepaid interest. Generally, a cash basis taxpayer can’t deduct 

prepaid interest allocable to years following the current tax year, 

for example, during the tax year a cash basis taxpayer prepaid 

interest on a loan. The taxpayer can deduct only that part of the 

prepaid interest that was for the use of the loaned funds during 

the tax year, not for the use of the loaned funds during the 

subsequent years.

Straddle interest. Generally, the interest and carrying charges 

on straddles can’t be deducted and must be capitalized. See 

section 263(g).

Original issue discount. See section 163(e)(5) for special 

rules for the disqualified portion of original issue discount on a 

high-yield discount obligation.

Interest on certain underpayments of tax. Don't deduct 

interest paid or incurred on any portion of an underpayment of 

tax that is attributable to an understatement arising from an 

undisclosed listed transaction or an undisclosed reportable 

avoidance transaction (other than a listed transaction) entered 

into in tax years beginning after October 22, 2004.

Interest allocable to the production of designated property. 

Don't deduct interest on debt allocable to the production of 

designated property. Interest that is allocable to such property 

produced by an organization for its own use or for sale must be 

capitalized. An organization must also capitalize any interest on 

debt allocable to an asset used to produce the earlier property. 

See section 263A(f) and Regulations sections 1.263A-8 through 

1.263A-15.

Interest on below-market loans. See section 7872 for special 

rules regarding the deductibility of foregone interest on certain 

below-market-rate loans.

Limitation on deduction of business interest. Business 

interest expense is limited to the sum of business interest 

income, 30% of the adjusted taxable income, and floor plan 

financing interest. Business interest expense includes any 

interest paid or accrued on indebtedness properly allocable to 

an unrelated trade or business. A taxpayer, other than a tax 

shelter, that meets the gross receipts test isn’t required to limit 

business interest expense under section 163(j). A taxpayer 

meets the gross receipts test if the taxpayer has average annual 

gross receipts that are taken into account in determining its UBTI 

of $29 million or less for the 3 prior tax years. Gross receipts 

include the aggregate gross receipts from all persons treated as 

a single employer such as a controlled group of corporations, 

commonly controlled partnerships or proprietorships, and 

Instructions for Form 990-T 21
affiliated service groups. If the taxpayer fails to meet the gross 

receipts test, Form 8990 is generally required.

Taxes and Licenses

Line 6. Enter taxes and license fees paid or accrued during the 

year, but don't include the following taxes.

• Federal income taxes.

• Foreign or U.S. territory income taxes if a foreign tax credit is 

claimed.

• Taxes not imposed on your organization.

• Taxes, including state or local sales taxes, paid or incurred in 

connection with an acquisition or disposition of property. These 

taxes must be treated as part of the cost of the acquired property 

or, in the case of a disposition, as a reduction in the amount 

realized on the disposition.

• Taxes assessed against local benefits that increase the value 

of the property assessed (such as for paving, etc.).

• Taxes deducted elsewhere on the return, such as those 

reflected in cost of goods sold.

See section 164(d) for apportionment of taxes on real 

property between the buyer and seller.

Do not reduce the corporation’s deduction for social 

security and Medicare taxes by the amount claimed on 

its employment tax and refundable portions of the 

FFCRA and ARP credits for qualified sick and family leave 

wages. Instead, report this amount as income on line 10.

Depreciation

Line 7. Besides depreciation, include on line 7 the part of the 

cost, under section 179, that the organization elected to expense 

for certain tangible property placed in service during the tax year 

or carried over from the prior tax year. See Form 4562 and its 

instructions.

Depletion 

Line 9. See sections 613 and 613A for percentage depletion 

rates for natural deposits. Attach Form T (Timber), Forest 

Activities Schedules, if a deduction is taken for depletion of 

timber.

Contributions to Deferred Compensation Plans

Line 10. Employers who maintain pension, profit-sharing, or 

other funded deferred compensation plans are generally 

required to file Form 5500. This requirement applies whether or 

not the plan is qualified under the Code and whether or not a 

deduction is claimed for the current tax year. Section 6652(e) 

imposes a penalty for late filing of these forms. In addition, there 

is a penalty for overstating the pension plan deduction. See 

section 6662(f).

Employee Benefit Programs

Line 11. Enter the amount of contributions to employee benefit 

programs (such as insurance, health, and welfare programs) that 

aren't an incidental part of a deferred compensation plan 

included on Schedule A, Part II, line 10.

Excess Exempt Expenses

Line 12. Enter the amount computed on Part VIII, line 7 (if 

applicable), on Part II, line 12.

Excess Readership Costs

Line 13. Enter the amount computed on Part IX, line 8a (if 

applicable), on Part II, line 13.

CAUTION

!

Other Deductions 

Line 14. Enter on this line the deduction taken for amortization 

(see Form 4562) as well as other authorized deductions for 

which no space is provided on the return. Attach a statement 

listing the deductions claimed on this line. On each Schedule A, 

deduct only items directly connected with the unrelated trade or 

business for which income is reported on that Schedule A.

Extraterritorial income exclusion. Complete Form 8873 and 

include the deduction from line 52 in other deductions reported 

on Part II, line 14.

Don't deduct fines or penalties paid to a government for 

violating any law. The exclusion was repealed generally for 

transactions after 2004, with some exceptions. See Form 8873 

and its instructions.

Net Operating Loss (NOL) Deduction Arising in 

Tax Years Beginning On or After January 1, 2018 

Line 17. The NOL deduction is the NOL carryover and 

carrybacks that can be deducted in the tax year with regard to 

each separate trade or business. To be deductible, an NOL must 

have been incurred in an unrelated trade or business activity. 

See section 172(a).

Tax Cuts and Jobs Act amendments to section 172. Section 

13302 of the Tax Cuts and Jobs Act amended section 172 for tax 

years ending after 2017 to eliminate NOL carrybacks except for 

certain farming losses and NOLs of insurance companies other 

than life insurance companies. See section 172(b), as amended 

by the Tax Cuts and Jobs Act. Also see Pub. 225, Farmer’s Tax 

Guide; Pub. 536, Net Operating Losses for Individuals, Estates, 

and Trusts; and Pub. 542, Corporations, for additional 

information. The Tax Cuts and Jobs Act also amended section 

172(a)(2) to limit the allowable NOL deduction to 80% of taxable 

income (calculated as described in section 172(a)(2)).

Instructions for line 17. Enter on Schedule A, Part II, line 17, 

the NOL carryover from other tax years attributable to that trade 

or business, but don't enter more than the amount shown on 

Schedule A, Part II, line 16. An organization that claims the 

deduction with respect to any NOL carried through tax years for 

which the organization was not required to file Form 990-T must 

show the amount of the deduction and how it was computed, but 

the organization need not file a Form 990-T in order to preserve 

an NOL carryover. See Regulations section 1.512(a)-6(h)(3) for 

treatment of suspended NOLs resulting from the termination, 

sale, exchange, or other disposition of a separate unrelated 

trade or business. After offsetting any gain resulting from the 

termination, sale, exchange, or disposition of a separate 

unrelated trade or business, any NOL remaining is suspended. 

However, the suspended NOLs may be used if that previous 

separate unrelated trade or business is later resumed or if a new 

unrelated trade or business that is accurately identified using the 

same NAICS 2-digit code as the previous separate unrelated 

trade or business is commenced or acquired in a future tax year.

The amount of an NOL carryover is determined under section 

172. See Regulations section 1.512(b)-1(e) and, for 

organizations with more than one unrelated trade or business, 

Regulations section 1.512(a)-6(h). Attach a statement showing 

the computation of the NOL deduction.

Unrelated Business Taxable Income

Line 18. Use the greater of the amount computed on line 18 or 

zero in the computation of UBTI on Part I, line 1, of Form 990-T. 

A net loss calculated on any Schedule A, Part II, line 18, can’t be 

used to offset gain on any other Schedule A. Accordingly, a net 

22 Instructions for Form 990-T
loss on a Schedule A should be treated as zero to calculate the 

amount reported on Part I, line 1, of Form 990-T

Part III. Cost of Goods Sold

Generally, inventories are required at the beginning and end of 

each tax year if the production, purchase, or sale of merchandise 

is an income-producing factor. See Regulations section 1.471-1.

However, if the organization is a qualifying taxpayer or a 

qualifying small business taxpayer, it may adopt or change its 

accounting method to account for inventoriable items in the 

same manner as materials and supplies that aren't incidental 

(unless its business is a tax shelter (as defined in section 448(d)

(3)).

A qualifying taxpayer is a taxpayer that, for each prior tax year 

ending after December 16, 1998, has average annual gross 

receipts of $1 million or less for the 3-tax-year period ending with 

that prior tax year.

A qualifying small business taxpayer is a taxpayer (a) that has 

average annual gross receipts of $29 million or less for the 

3-tax-year period ending with that prior tax year, and (b) whose 

principal business activity isn't an ineligible activity.

Under this accounting method, inventory cost for raw 

materials purchased for use in producing finished goods and 

merchandise purchased for resale are deductible in the year the 

finished goods or merchandise are sold (but not before the year 

the organization paid for the raw materials or merchandise, if it is 

also using the cash method). For additional guidance on this 

method of accounting for inventoriable items, see Pub. 538 and 

the Instructions for Form 3115.

Enter amounts paid for all raw materials and merchandise 

during the tax year on line 2. The amount the organization can 

deduct for the tax year is figured on Schedule A, Part III, line 8.

All filers not using the cash method of accounting should see 

Section 263A Uniform Capitalization Rules under Limitations on 

Deductions, earlier, before completing Schedule A. The 

instructions for lines 1, 4, 5, and 7, later, apply to Part III earlier, 

before completing Schedule A.

Inventory valuation methods. Inventories can be valued at:

1. Cost, as described in Regulations section 1.471-3,

2. Lower of cost or market, as described in Regulations 

section 1.471-4, or

3. Any other method approved by the IRS that conforms to 

the requirements of the applicable regulations cited below.

However, if the organization is using the cash method of 

accounting, it is required to use cost.

A small producer is an organization whose average annual 

gross receipts are $1 million or less. Small producers that 

account for inventories in the same manner as materials and 

supplies that aren't incidental may currently deduct expenditures 

for direct labor and all indirect costs that would otherwise be 

included in inventory costs.

The average cost (rolling average) method of valuing 

inventories generally doesn’t conform to the requirement of the 

regulations. See Rev. Rul. 71-234, 1971-1 C.B. 148.

Organizations that use erroneous valuation methods must 

change to a method permitted for federal income tax purposes. 

File Form 3115 to make this change.

Inventory may be valued below cost when the merchandise is 

unsalable at normal prices or unusable in the normal way 

because the goods are subnormal because of damage, 

imperfections, shop wear, etc., within the meaning of 

Regulations section 1.471-2(c). The goods may be valued at the 

bona fide selling price, minus direct cost of disposition (but not 

less than scrap value). Bona fide selling price means actual 

offering of goods during a period ending not later than 30 days 

after inventory date.

If this is the first year the Last-in First-out (LIFO) inventory 

method was either adopted or extended to inventory goods not 

previously valued under the LIFO method provided in section 

472, attach Form 970, Application To Use LIFO Inventory 

Method, or a statement with the information required by Form 

970.

If the organization changed or extended its inventory method 

to LIFO and had to write up the opening inventory to cost in the 

year of election, report the effect of this write-up as other income 

(Part I, line 12) proportionately over a 3-year period that begins 

in the tax year the LIFO election was made (section 472(d)).

Line 1. If the organization is changing its method of accounting 

to no longer account for inventories, it must refigure last year's 

closing inventory using the new method of accounting and enter 

the result on line 1. If there is a difference between last year's 

closing inventory and the refigured amount, attach an 

explanation and take it into account when figuring the 

organization's section 481(a) adjustment (explained earlier).

Line 4. An entry is required on this line only for organizations 

that have elected a simplified method of accounting.

For organizations that have elected the simplified production 

method, additional section 263A costs are generally those costs, 

other than interest, that are now required to be capitalized under 

section 263A but that weren’t capitalized under the 

organization's method of accounting immediately prior to the 

effective date of section 263A. For details, see Regulations 

section 1.263A-2(b).

For organizations that have elected the simplified resale 

method, additional section 263A costs are generally those costs 

incurred with respect to the following categories.

• Off-site storage or warehousing.

• Purchasing.

• Handling, such as processing, assembling, repackaging, and 

transporting.

• General and administrative costs (mixed service costs).

For details, see Regulations section 1.263A-3(d).

Enter on Schedule A, Part III, line 4, the balance of section 

263A costs paid or incurred during the tax year not included on 

Schedule A, Part III, lines 2 and 3.

Line 5. Enter on Schedule A, Part III, line 5, any costs paid or 

incurred during the tax year not entered on Schedule A, Part III, 

lines 2 through 4. Attach a statement describing the other costs.

Line 7. See Regulations sections 1.263A-1 through 1.263A-3 

for details on figuring the amount of additional section 263A 

costs to be included in ending inventory.

If the organization accounts for inventories in the same 

manner as materials and supplies that aren't incidental, enter on 

Schedule A, Part III, line 7, the portion of its raw materials and 

merchandise purchased for resale that are included on 

Schedule A, Part III, line 6, and weren’t sold during the year.

Part IV. Rent Income

Section 501(c)(7), (9), and (17) organizations, enter gross rents 

on Schedule A, Part I, line 6, and applicable expenses on 

Schedule A, Part II, lines 1 through 14. All rents except those that 

are exempt function income must be included.

All organizations that have applicable rent income, other than 

section 501(c)(7), (9), and (17) organizations, should complete 

Schedule A, Part IV. For organizations other than section 501(c)

(7), (9), and (17) organizations, only the following rents are 

taxable on Schedule A, Part I, line 6.

Instructions for Form 990-T 23
1. Rents from personal property leased with real property, if 

the rents from the personal property are more than 10% of the 

total rents received or accrued under the lease, determined at 

the time the personal property is placed in service.

2. Rents from real and personal property if:

a. More than 50% of the total rents received or accrued 

under the lease are for personal property, or

b. The amount of the rent depends on the income or profits 

derived by any person from the property leased (except an 

amount based on a fixed percentage of receipts or sales).

A redetermination of the percentage of rent for personal 

property is required when either:

1. There is an increase of 100% or more by the placing of 

additional or substitute personal property in service, or

2. There is a modification of the lease that changes the rent 

charged. Rents from both real and personal property not taxable 

on Schedule A, Part I, line 6, may be taxable on Schedule A, Part 

I, line 8, if the income is from a controlled organization or on 

Schedule A, Part I, line 7, if the property is debt-financed. 

Taxability of the rent must be considered in the following order.

a. Rents not taxed on Schedule A, Part I, line 6, may be 

taxed on Schedule A, Part I, line 8.

b. Rents not taxed on Schedule A, Part I, line 6 or line 8, may 

be taxed on Schedule A, Part I, line 7.

Rents from personal property not leased with real property 

should be reported on Schedule A, Part I, line 12.

See Form 8582 (for trusts) or Form 8810 (for corporations) 

and section 469 for limitations on losses from rental activities.

Description of Property

Line 1. Check the box next to the property description if the 

property is used both to carry on exempt activities and to 

conduct unrelated trade or business activities.

Line 4. For each property, attach a statement describing the 

directly connected deductions and their amounts.

Part V. Unrelated Debt-Financed 

Income 

Use Schedule A, Part V, to compute unrelated debt-financed 

income described in sections 512(b)(4) and 514 from 

debt-financed property only to the extent that the income doesn’t 

constitute income from the conduct of an unrelated trade or 

business and isn't specifically taxable under other provisions of 

the Code, such as taxable rents from personal property leased 

with real property reportable on Schedule A, Part IV (and 

Schedule A, Part I, line 6), or taxable interest, annuities, 

royalties, and rents from a controlled entity reportable on 

Schedule A, Part VI (and Schedule A, Part I, line 8). See 

Regulations section 1.514(b)-1(b)(2). Refer to Regulations 

section 1.512(a)-6 when reporting income from one or more 

debt-financed properties and also for rules permitting the 

aggregation of unrelated debt-financed income with other UBTI 

in certain circumstances. Gain or loss from the sale or 

disposition of debt-financed property is reported on Schedule A, 

Part I, line 4.

Section 501(c)(7), (9), and (17) organizations should report 

income from debt-financed property on Schedule A, Part VII 

(and Schedule A, Part I, line 9).

When a debt-financed property is held for exempt purposes 

and other purposes, the organization must allocate the basis, 

debt, income, and deductions among the purposes for which the 

property is held. Don't include on Schedule A, Part V, amounts 

allocated to exempt purposes.

For section 514 purposes, don't treat an interest in a 

qualified state tuition program (QSTP) as debt. However, 

a QSTP's investment income is treated as debt-financed 

income if the QSTP incurs indebtedness when acquiring or 

improving income-producing property.

A property held to produce income is debt-financed property 

if, at any time during the tax year, there was acquisition 

indebtedness outstanding for the property. When a property held 

for the production of income by an organization is disposed of at 

a gain during the tax year, and there was acquisition 

indebtedness outstanding for that property at any time during the 

12-month period before the date of disposition, the property is 

debt-financed property. Securities purchased on margin are 

considered debt-financed property if the liability incurred in 

purchasing them remains outstanding.

Acquisition indebtedness is the outstanding amount of 

principal debt incurred by the organization to acquire or improve 

the property. Acquisition indebtedness also includes 

indebtedness incurred:

1. Before the property was acquired or improved, if the 

indebtedness would not have been incurred but for such 

acquisition or improvement of the property; or

2. After the property was acquired or improved, if the 

indebtedness would not have been incurred but for such 

acquisition or improvement and the incurrence of such 

indebtedness was reasonably foreseeable at the time of such 

acquisition or improvement. See Regulations section 

1.514(c)-1(a).

With certain exceptions, acquisition indebtedness doesn’t 

include debt incurred by the following.

1. A qualified (section 401) trust in acquiring or improving 

real property. See section 514(c)(9).

2. A tax-exempt school (section 170(b)(1)(A)(ii)) and its 

affiliated support organizations (section 509(a)(3)) for 

indebtedness incurred after July 18, 1984.

3. An organization described in section 501(c)(25) in tax 

years beginning after December 31, 1986.

4. An obligation, to the extent that it is insured by the Federal 

Housing Administration, to finance the purchase, rehabilitation, 

or construction of housing for low and moderate income 

persons, or indebtedness incurred by a small business 

investment company licensed after October 22, 2004, under the 

Small Business Investment Act of 1958 if such indebtedness is 

evidenced by a debenture issued by such company under 

section 303(a) of that Act, and held or guaranteed by the Small 

Business Administration (see section 514(c)(6)(B) for 

limitations).

5. A retirement income account described in section 403(b)

(9) in acquiring or improving real property in tax years beginning 

on or after August 17, 2006.

See Pub. 598 for additional exceptions to the rules for 

debt-financed property.

Example 1. An exempt organization owns a four-story 

building. Two floors are used for an exempt purpose and two 

floors are rented (as an unrelated trade or business) for $10,000. 

Expenses are $1,000 for depreciation and $5,000 for other 

expenses that relate to the entire building. The average 

acquisition indebtedness is $6,000, and the average adjusted 

basis is $10,000. Both apply to the entire building.

Example 2. Assume the same facts as in Example 1, except 

the entire building is rented out as an unrelated trade or business 

for $20,000. To complete Schedule A, Part V, for this example, 

enter $20,000 on Schedule A, Part V, line 2; $1,000 and $5,000 

on Schedule A, Part V, lines 3(a) and 3(b), respectively (since 

the entire amount is for debt-financed property); $6,000 and 

CAUTION

!

24 Instructions for Form 990-T
$10,000 on Schedule A, Part V, lines 4 and 5 (since the entire 

amount is for debt-financed property); 60% on Schedule A, Part 

V, line 6; $12,000 on Schedule A, Part V, line 7; and $3,600 on 

Schedule A, Part V, line 9.

Line 1. Enter the address of the debt-financed property. If the 

debt-financed property isn’t real property, enter the address 

where the property is located and describe the property in Part 

XI, Supplemental Information.

Check the box next to the property description if the property 

is used both to carry on exempt activities and to conduct 

unrelated trade or business activities.

Line 2. Enter the gross income from debt financed property, 

excluding income otherwise included in UBTI. For example, don't 

include rents from personal property shown on Schedule A, Part 

IV, or rents and interest from controlled organizations shown on 

Schedule A, Part VI.

Line 3. For amounts shown on line 3a, attach a statement 

showing, for each property:

1. The cost or salvage value,

2. The year acquired,

3. The property’s useful life (rounded to a whole number if 

necessary),

4. The years remaining (rounded to a whole number if 

necessary),

5. The annual depreciation expense amount, and

6. The allowable depreciation expense amount.

Line 4. Average acquisition indebtedness for any tax year is the 

average amount of the outstanding principal debt during the part 

of the tax year the property is held by the organization. To figure 

the average amount of acquisition debt, determine the amount of 

the outstanding principal debt on the first day of each calendar 

month during that part of the tax year that the organization holds 

the property. Add these amounts together, and divide the result 

by the total number of months during the tax year that the 

organization held the property. See section 514(a) and the 

related regulations for property acquired for an indeterminate 

price.

1. The average amount of acquisition debt,

2. The percent allocable to debt-financed income, and

3. The product of (1) multiplied by (2).

Line 5. The average adjusted basis for debt-financed property 

is the average of the adjusted basis of the property on the first 

and last days during the tax year that the organization holds the 

property. Determine the adjusted basis of property under section 

1011. Adjust the basis of the property by the depreciation for all 

earlier tax years, whether or not the organization was exempt 

from tax for any of these years. Similarly, for tax years during 

which the organization is subject to tax on UBTI, adjust the basis 

of the property by the entire amount of allowable depreciation, 

even though only a part of the deduction for depreciation is taken 

into account in figuring UBTI.

Attach a statement showing, for each property:

1. A brief description of the property,

2. The adjusted basis,

3. The percent allocable to debt-financed income, and

4. The product of (3) multiplied by (4).

If no adjustments to the basis of property under section 1011 

apply, the basis of the property is cost.

See section 514(d) and the related regulations for the basis of 

debt-financed property acquired in a complete or partial 

liquidation of a corporation in exchange for its stock.

Line 6. Divide each property's average acquisition 

indebtedness for the tax year by that property's average adjusted 

basis during the period it is held in the tax year. This percentage 

cannot be more than 100%.

Line 7. The amount of income from debt-financed property 

included in unrelated trade or business income is figured by 

multiplying the property's gross income by the percentage 

computed on line 6.

Line 8 . Enter on line 8 the sum of amounts computed for each 

property on line 7. Also enter this amount on Part I, line 7, 

column (A).

Line 9. For each debt-financed property, multiply the total 

deductions directly connected to the income (including the 

dividends-received deductions allowed by sections 243, 244, 

and 245) by the percentage computed on line 6. However, if the 

debt-financed property is depreciable property, figure the 

depreciation deduction by the straight line method only and enter 

the amount on Schedule A, Part V, line 3a.

For each debt-financed property, attach statements showing 

separately a computation of the depreciation deduction (if any) 

reported on Schedule A, Part V, line 3a, (as described earlier) 

and a breakdown of the expenses included on Schedule A, Part 

V, line 3b. Corporations owning stock that is unrelated 

debt-financed property should see Schedule C (Dividends and 

Special Deductions) of Form 1120, U.S. Corporation Income Tax 

Return, to determine the dividends-received deductions to 

include on Schedule A, Part V, line 3b.

When a capital loss for the tax year may be carried back or 

carried over to another tax year, the amount to carry over or back 

is figured by using the percentage determined above. However, 

in the year to which the amounts are carried, don't apply the 

debt-basis percentage to determine the deduction for that year.

Line 10. On line 10, enter the sum of amounts computed for 

each property on line 9. Also enter this amount on Part I, line 7, 

column (B).

Line 11. Enter the total dividends-received deductions (after 

reduction, when applicable, by the debt-basis percentage(s)) 

included on Schedule A, Part V, line 9.

Part VI. Interest, Annuities, Royalties, 

and Rents From Controlled 

Organizations

Under section 512(b)(13), interest, annuities, royalties, and rents 

received or accrued (directly or indirectly) by a controlling 

organization from a controlled organization are subject to tax, 

whether or not the activity conducted by the controlling 

organization to earn these amounts is a trade or business or is 

regularly conducted. However, see Regulations section 

1.512(b)-1(l)(5) regarding amounts taxable under other 

provisions of the Code.

Controlled organization. An entity is a “controlled 

organization” if the controlling organization owns:

• By vote or value, more than 50% of a corporation's stock (for 

an organization that is a corporation);

• More than 50% of a partnership's profits or capital interests 

(for an organization that is a partnership); or

• More than 50% of the beneficial interests in an organization 

(for an organization other than a corporation or partnership).

To determine the ownership of stock in a corporation, apply 

the principles of section 318 (constructive ownership of stock). 

Apply similar principles to determine the ownership of interests 

in a partnership or any other organization.

Instructions for Form 990-T 25
Column 3. Enter the net unrelated income (or net unrelated 

loss) of each controlled entity listed that is exempt from tax under 

section 501(a).

Column 7. Enter the taxable income of each nonexempt 

controlled organization.

Column 8. Enter the net unrelated income (or net unrelated 

loss) of each controlled entity listed that isn't exempt from tax 

under section 501(a). Net unrelated income is that portion of the 

controlled entity's taxable income that would be UBTI if the entity 

were exempt under section 501(a) and had the same exempt 

purposes as the controlling organization. Net unrelated loss is 

the controlled organization's NOL adjusted under rules similar to 

those used to determine net unrelated income.

Column 4 or 9. For each controlled organization, enter the total 

of specified payments received from each controlled 

organization. If the organization received both specified 

payments and qualifying specified payments from a controlled 

organization, enter specified payments on one line and 

qualifying specified payments on another so that there are dual 

entries for that controlled organization.

Column 5 or 10. For specified payments, enter the portion of 

column 4 or 9 to the extent that the payment reduced the net 

unrelated income (or increased the net unrelated loss) of the 

controlled entity.

Column 6 or 11. Enter only those deductions directly 

connected with the income entered in column 5 or 10.

With respect to qualifying specified payments, enter only that 

portion of expenses directly connected to the amounts included 

in column 5 or 10, that is, the excess of the payment over the 

FMV amount, as determined in accordance with section 482. 

Don't enter any expenses relating to the portion of such payment 

that isn't includible in income under this special rule.

For valuation misstatements regarding qualifying 

specified payments, there is a 20% addition to tax. See 

section 512(b)(13)(E)(ii).

Excess qualifying specified payments. Excess qualifying 

specified payments received or accrued from a controlled entity 

(that is, the amount of qualifying specified payments in excess of 

what would have been paid or accrued if the payments had been 

determined under section 482) are included in a controlling 

exempt organization's UBTI.

Part VII. Investment Income of a 

Section 501(c)(7), (9), or (17) 

Organization

Generally, for section 501(c)(7), (9), or (17) organizations, 

unrelated trade or business income includes all gross income 

from nonmembers with certain modifications. See section 512(a)

(3)(A). Report on Schedule A, Part VII, all income from 

investments in securities and other similar investment income 

from nonmembers, including 100% of income and directly 

connected expenses from debt-financed property. Don't report 

nonmember income from debt-financed property on Schedule A, 

Part V.

All section 501(c)(7), (9), and (17) organizations figure their 

investment income using Schedule A, Part VII. Don't include 

interest on state and local governmental obligations described in 

section 103(a).

Investment income includes all income from debt-financed 

property.

If a section 501(c)(7), (9), or (17) organization (or a title 

holding corporation, described earlier) sells property that was 

used for the exempt function of the section 501(c)(7), (9), or (17) 

CAUTION

!

organization and buys other property used for the organization's 

exempt function within a period beginning 1 year before the date 

of the sale, and ending 3 years after the date of the sale, the gain 

from the sale will be recognized only to the extent that the sales 

price of the old property is more than the cost of the other 

property. The other property need not be similar in type or use to 

the old property. The organization must notify the IRS of the sale 

by a statement attached to the return, or other written notice.

To compute the gain on the sale of depreciable property, see 

the instructions for Part V, line 5, to determine the adjusted basis 

of the property.

Column 3. Deduct only those expenses that are directly 

connected to the net investment income. Allocate deductions 

between exempt activities and other activities where necessary. 

The organization may not take the dividends-received 

deductions in figuring net investment income because they aren't 

treated as directly connected with the production of gross 

income.

Column 4. Section 501(c)(7), (9), and (17) organizations may 

set aside income that would otherwise be taxable under section 

512(a)(3). However, income derived from an unrelated trade or 

business may not be set aside and thus can’t be exempt function 

income. In addition, any income set aside and later used for 

other purposes must be included in income.

Section 501(c)(7), (9), and (17) organizations won't be taxed 

on income set aside for:

1. Religious, charitable, scientific, literary, or educational 

purposes, or for the prevention of cruelty to children or animals 

(and reasonable administration costs directly connected to such 

purposes); or

2. The payment of life, sickness, accident, or other benefits 

(and reasonable administration costs directly connected to such 

benefits) by a section 501(c)(9) or (17) organization. The amount 

allowed as a set-aside may not exceed a limit determined using 

section 512(a)(3)(E). See sections 512(a)(3)(E) and 419A for 

details.

Report income set aside on Schedule A, Part VII, column 4. 

Attach a statement listing:

1. The amount set aside for charitable purposes;

2. The amount set aside for reasonable administration costs 

directly connected with such amount;

3. The amount set aside for payment of life, sickness, 

accident, or other benefit; and

4. The amount set aside for reasonable administration costs 

directly connected with the payment of such benefits.

Amounts set aside aren't deductible under section 170 or any 

other section of the Code.

The organization may elect to treat income set aside by the 

date for filing the return, including any extension of time, as 

income set aside in the tax year for which the return is filed. The 

income set aside must have been includible in gross income for 

that earlier tax year.

Although set-aside income may be accumulated, any 

accumulation that is unreasonable will be evidence that the set 

aside wasn’t for the purposes previously mentioned.

Net investment income set aside must be specifically 

earmarked as such, or placed in a separate account or fund 

(except for a section 501(c)(9) or (17) organization which, by the 

terms of its governing instrument, must use its net investment 

income for the payment of life, sickness, accident, or other 

benefits, and reasonable administration costs).

These rules apply to a corporation described in section 

501(c)(2) (title holding corporation) whose income is payable to 

an organization described in section 501(c)(7), (9), or (17) if it 

26 Instructions for Form 990-T
files a consolidated return with the section 501(c)(7), (9), or (17) 

organization.

Part VIII. Exploited Exempt Activity 

Income, Other Than Advertising 

Income 

Exempt organizations that have gross income from an unrelated 

trade or business activity that exploits an exempt activity (other 

than periodical advertising income reportable on Schedule A, 

Part IX) should complete Schedule A, Part VIII. See Regulations 

section 1.513-1(d)(4)(iv) for a definition of exploited exempt 

activity. Report income from advertising other than in a periodical 

on Schedule A, Part VIII.

Line 1. Briefly describe the exempt activity being exploited in 

an unrelated trade or business activity.

Line 3. An exempt organization may take all deductions directly 

connected with the gross income from the unrelated trade or 

business activity.

Line 4. Subtract directly connected deductions from the gross 

unrelated business income. If unrelated business income 

exceeds the directly connected deduction, the exempt 

organization may take into account all deductible items 

attributable to the exploited exempt activity, with the following 

limitations.

1. Reduce the deductible items of the exempt activity by the 

income from the activity.

2. Limit the net amount of deductible items arrived at in item 

1 above for the exempt activity to the net unrelated business 

income from the exploited exempt activity.

3. Exclude income and expenses of the exempt activity in 

figuring a loss carryover or carryback from the unrelated trade or 

business activity exploiting the exempt activity.

4. Exclude deductible items of the exempt activity in figuring 

unrelated trade or business income from an activity that isn't 

exploiting the same exempt activity.

As a result, the net includible exploited exempt activity 

income is the UBTI minus the excess of the exempt activity 

expenses over the exempt activity income. If the income from the 

exempt activity exceeds the exempt activity expenses, don't add 

that profit to the net income from the unrelated business activity. 

Attach a separate statement showing the computation.

Part IX. Advertising Income

An exempt organization that earned gross income from the sale 

of advertising in an exempt organization periodical must 

complete Schedule A, Part IX. The part of the advertising income 

taken into account is determined as follows.

1. If direct advertising costs (expenses directly connected 

with advertising income) are more than advertising income 

(unrelated business income), deduct that excess in figuring UBTI 

from any other unrelated trade or business activity conducted by 

the organization.

2. If advertising income is more than direct advertising costs, 

and circulation income (exempt activity income) equals or 

exceeds readership costs (exempt activity expenses), then UBTI 

is the excess of advertising income over direct advertising costs.

3. If advertising income is more than direct advertising costs, 

and readership costs are more than circulation income, then 

UBTI is the excess of total income (advertising income and 

circulation income) over total periodical costs (direct advertising 

costs and readership costs).

4. If the readership costs are more than the circulation 

income, and the net readership costs are more than the excess 

of advertising income over direct advertising costs, no loss is 

allowable. See Regulations section 1.512(a)-1(f)(2)(ii)(b).

For allocating membership receipts to circulation income, see 

Rev. Rul. 81-101, 1981 C.B. 352.

Consolidated periodicals. If an organization publishes two or 

more periodicals, it may elect to treat the gross income for all 

(but not less than all) periodicals, and deductions directly 

connected with those periodicals (including excess readership 

costs) as if the periodicals were one to determine its UBTI. This 

rule only applies to periodicals published for the production of 

income. A periodical is considered published for the production 

of income if gross advertising income of the periodical is at least 

25% of the readership costs, and the periodical is an activity 

engaged in for profit.

If periodicals are consolidated, check the box next to the 

periodical name, and attach a statement showing the name of 

each periodical in the consolidated group. The attached 

statement should include the amounts that correspond to 

information for lines 2 through 4. Attach a separate statement for 

the consolidated group of publications that includes the amounts 

corresponding to the information for lines 5 through 8.

Part X. Compensation of Officers, 

Directors, and Trustees 

Complete columns 1 through 4 for those officers, directors, and 

trustees whose salaries or other compensation are allocable to 

unrelated business gross income. Don't include in column 4 

compensation that is deducted on Schedule A, Part II, lines 2 

and 14, or any line of Schedule A, Parts III through IX.

Part XI. Supplemental Information

Use Part XI to explain the organization’s operations, to provide 

information for lines that don’t have an embedded attachment to 

capture the information to supplement information provided on 

an embedded attachment, or to provide any other information in 

support of amounts reported on Schedule A. An organization 

that associated unrelated trade or business activity with a 

different NAICS or Business Activity Code in a prior year than the 

NAICS or Business Activity Code shown on the Schedule A for 

the current tax year can enter the explanation for the change 

here.

For each entry in Part XI, include the Schedule A Part and line 

number, a brief description, and the amount (if any). If necessary, 

you may also attach a PDF document to provide supplemental 

information.

Paperwork Reduction Act Notice

We ask for the information on these forms to carry out the 

Internal Revenue laws of the United States. You are required to 

give us the information. We need it to ensure that you are 

complying with these laws and to allow us to figure and collect 

the right amount of tax. You are not required to provide the 

information requested on a form that is subject to the Paperwork 

Reduction Act unless the form displays a valid OMB control 

number. Books or records relating to a form or its instructions 

must be retained as long as their contents may become material 

in the administration of any Internal Revenue law. Generally, tax 

returns and return information are confidential, as required by 

section 6103.

Estimates of Taxpayer Burden. These include forms in the 

990 series and attachments; and Forms 1023, 1024, 1028, 

5578, 5884-C, 8038, 8038-B, 8038-CP, 8038-G, 8038-GC, 

8038-R, 8038-T, 8038-TC, 8328, 8718, 8282, 8453-TE, 8453-X, 

8868, 8870, 8871, 8872, 8879-TE, 8886-T, and 8899 and their 

schedules; and all the forms tax-exempt organizations attach to 

their tax returns. Time spent and out-of-pocket costs are 

Instructions for Form 990-T 27
presented separately. Time burden includes the time spent 

preparing to file and to file, with recordkeeping representing the 

largest component. Out-of-pocket costs include any expenses 

incurred by taxpayers to prepare and submit their tax returns. 

Examples include tax return preparation and submission fees, 

postage and photocopying costs, and tax preparation software 

costs. Note that these estimates do not include burden 

associated with post-filing activities. IRS operational data 

indicate that electronically prepared and filed returns have fewer 

arithmetic errors, implying lower post-filing burden.

Reported time and cost burdens are national averages and 

do not necessarily reflect a “typical” case. Most taxpayers 

experience lower than average burden, with taxpayer burden 

varying considerably by taxpayer type. For instance, the 

estimated average time burden for all taxpayers filing Forms 990, 

990-EZ, 990-PF, 990-T, and 990-N and related forms is 32.8 

hours, with an average cost of $921 per return. This average 

includes all associated forms and schedules, across all 

preparation methods and taxpayer activities.

Fiscal Year 2024 Form 990 Series Tax Compliance Cost Estimates

Form 990 Form 990-EZ Form 990-PF Form 990-T Form 990-N

Projections of the 

Number of Returns 

to be Filed with IRS 351,100 251,000 130,100 233,200 733,100

Estimated Average 

Total Time (Hours) 107 69 53 42 5

Estimated Average 

Total 

Out-of-Pocket 

Costs $2,900 $600 $2,200 $2,200 $20

Estimated Average 

Total Monetized 

Burden $9,900 $1,700 $4,600 $5,700 $100

Estimated Total 

Time (Hours) 37,710,000 17,400,000 6,940,000 9,790,000 3,660,000

Estimated Total 

Out-of-Pocket 

Costs $1,023,200,000 $152,200,000 $282,600,000 $506,400,000 $14,000,000

Estimated Total 

Monetized Burden $3,466,900,000 $425,200,000 $594,600,000 $1,324,000,000 $71,400,000 

Note: Amounts above are for FY2024. Reported time and cost burdens are national averages and don’t necessarily reflect a 

“typical” case. Most taxpayers experience lower-than-average burden, with taxpayer burden varying considerably by taxpayer type. 

Detail may not add due to rounding.

Comments and suggestions, We welcome your comments 

about this publication and suggestions for future editions. You 

can send us comments through IRS.gov/FormComments. Or 

you can write to:

Internal Revenue Service

Tax Forms and Publications Division

1111 Constitution Ave. NW, IR-6526

Washington, DC 20224

Although we can't respond individually to each comment 

received, we do appreciate your feedback and will consider your 

comments and suggestions as we revise our tax forms, 

instructions, and publications. Don't send tax questions, tax 

returns, or payments to the above address.

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Photographs of missing children selected by the Center may 

appear in instructions on pages that would otherwise be blank. 

You can help bring these children home by looking at the 

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Phone help, If you have questions and/or need help completing 

this form, call 877-829-5500. This toll-free telephone service is 

available Monday through Friday.

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• Download forms and publications.

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Ordering Forms and Publications

Getting tax forms, instructions, and publications, Go to 

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Ordering tax forms and publications, Go to IRS.gov/Orderproducts to order current forms, instructions, and publications.

28 Instructions for Form 990-T
Business Activity Codes

The codes listed below that begin with the digits 1 

through 8 are a selection from the North American 

Industry Classification System (NAICS) commonly used 

by tax-exempt organizations. If you don’t see a code for 

the activity you need to categorize in the list below, refer 

to the full list of NAICS codes at Census.gov/NAICS.

Agriculture, Forestry, Hunting, 

and Fishing

Code

110000 Agriculture, forestry, hunting, and 

fishing

111000 Crop production

Mining

Code

211100 Oil and gas extraction

211120 Crude petroleum extraction

211130 Natural gas extraction

212000 Mining (except oil and gas)

Utilities

Code

221000 Utilities

Construction

Code

230000 Construction

236000 Construction of buildings

Manufacturing

Code

310000 Manufacturing

323100 Printing and related support 

activities

339110 Medical equipment and supplies 

manufacturing

Wholesale Trade

Code

423000 Merchant wholesalers, durable 

goods

424000 Merchant wholesalers, 

nondurable goods

Retail Trade

Code

441100 Automobile dealers

444100 Building materials and supplies 

dealers

445100 Grocery & convenience retailers

445200 Specialty food retailers

449100 Furniture and home furnishings 

retailers

455000 General merchandise retailers

456110 Pharmacies & drug retailers

456199 All other health and personal 

care retailers

458000 Clothing, clothing accessories, 

shoe, & jewelry retailers

459110 Sporting goods retailers

459120 Hobby, toy, & game retailers

459130 Sewing, needlework, & piece 

goods retailers

459140 Musical instrument & supplies 

retailers

459210 Book retailers & news dealers 

(including newsstands)

459310 Florists

459410 Office supplies & stationery 

retailers

459420 Gift, novelty, and souvenir 

retailers

459510 Used merchandise retailers

459900 Other miscellaneous retailers

Transportation and 

Warehousing

Code

480000 Transportation

485000 Transit and ground passenger 

transportation

493000 Warehousing and storage

Information

Code

512000 Motion picture and sound 

recording industries

513110 Newspaper publishers

513120 Periodical publishers

513130 Book publishers

513140 Directory & mailing list publishers

513190 Other publishers

516100 Radio & television broadcasting 

stations

516210 Media streaming, social 

networks, & other content 

providers

517000 Telecommunications (including 

wired, wireless, satellite, cable & 

other program distribution, 

resellers, agents, other 

telecommunications, & Internet 

service providers)

Data Processing, Web Search 

Portals, & Other Information 

Services

Code

518210 Computing infrastructure 

providers, data processing, web 

hosting, & related services

519200 Web search portals, libraries, 

archives, & other info. services

Finance and Insurance

Code

522100 Depository credit intermediation 

(including commercial banking, 

savings institutions, and credit 

unions)

522200 Nondepository credit 

intermediation

522210 Credit card issuing

522220 Sales financing

522291 Consumer lending

522292 Real estate credit

522299 Intl. secondary market, & other 

nondepository credit 

intermediation

523000 Securities, commodity contracts, 

and other financial investments 

and related activities

523940 Portfolio management & 

investment advice

524113 Direct life insurance carriers

524114 Direct health and medical 

insurance carriers

524126 Direct property and casualty 

insurance carriers

524130 Reinsurance carriers

524292 Pharmacy benefit management 

& other third-party administration

524298 All other insurance-related 

activities

525100 Insurance and employee benefit 

funds

525920 Trusts, estates, and agency 

accounts

525990 Other financial vehicles 

(including mortgage REITs)

Real Estate and Rental and 

Leasing

Code

531110 Lessors of residential buildings 

and dwellings (including equity 

REITs)

531120 Lessors of nonresidential 

buildings (except 

miniwarehouses)(including 

equity REITs)

531130 Lessors of miniwarehouses & 

self-storage units (including 

equity REITs)

531190 Lessors of other real estate 

property (including equity REITs)

531310 Real estate property managers

531320 Offices of real estate appraisers

531390 Other activities related to real 

estate

532000 Rental and leasing services

532289 All other consumer goods rental

532420 Office machinery and equipment 

rental and leasing

533110 Lessors of nonfinancial 

intangible assets (except 

copyrighted works)

Professional, Scientific, and 

Technical Services

Code

541100 Legal services

541200 Accounting, tax preparation, 

bookkeeping, and payroll 

services

541300 Architectural, engineering, and 

related services

541380 Testing laboratories & services

541511 Custom computer programming 

services

541519 Other computer-related services

541610 Management consulting services

541700 Scientific research and 

development services

541800 Advertising, public relations, & 

related services

541860 Direct mail advertising

541900 Other professional, scientific, 

and technical services

541990 Consumer Credit Counseling 

Services

Management of Companies and 

Enterprises

Code

551111 Offices of bank holding 

companies

551112 Offices of other holding 

companies

Administrative and Support 

Services

Code

561000 Administrative and support 

services

561300 Employment services

561439 Other business service centers 

(including copy shops)

561499 All other business support 

services

561500 Travel arrangement and 

reservation services

561520 Tour operators

561700 Services to buildings and 

dwellings

Waste Management and 

Remediation Services

Code

562000 Waste management and 

remediation services (sanitary 

services)

Educational Services

Code

611420 Computer training

611430 Professional and management 

development training

611600 Other schools and instruction 

(other than elementary and 

secondary schools or colleges 

and universities, which should 

select a code to describe their 

unrelated activities)

611710 Educational support services

Healthcare and Social 

Assistance

Code

621110 Offices of physicians

621300 Offices of other health 

practitioners

621400 Outpatient care centers

621500 Medical and diagnostic 

laboratories

621610 Home health care services

621910 Ambulance services

621990 All other ambulatory health care 

services

623000 Nursing and residential care 

facilities

623990 Other residential care facilities

624100 Individual and family services

624110 Child & youth services

624200 Community food and housing, 

and emergency and other relief 

services

624210 Meal delivery programs, soup 

kitchens, or food banks

624310 Vocational rehabilitation services

624410 Childcare services

Arts, Entertainment, and 

Recreation

Code

711110 Theater companies and dinner 

theaters

711120 Dance companies

711130 Musical groups and artists

711190 Other performing arts companies

711210 Spectator sports (including 

sports clubs and racetracks)

711300 Promoters of performing arts, 

sports, and similar events

713110 Amusement and theme parks

713200 Gambling industries

713910 Golf courses and country clubs

713940 Fitness and recreational sports 

centers

713990 All other amusement and 

recreation industries (including 

skiing facilities, marinas, and 

bowling centers)

Accommodation and Food 

Services

Code

721000 Accommodation

721110 Hotels (except casino hotels) 

and motels

721210 RV (recreational vehicle) parks 

and recreational camps

721310 Rooming and boarding houses, 

dormitories, and workers’ camps

722320 Caterers

722410 Drinking places (alcoholic 

beverages)

722511 Full-service restaurants

722513 Limited-service restaurants

722514 Cafeterias, grill buffets, and 

buffets

722515 Snack and non-alcoholic 

beverage bars

Other Services

Code

811000 Repair and maintenance

812300 Dry cleaning and laundry 

services

812900 Other personal services

812930 Parking lots and garages

29
Additional codes

Additional codes listed below that begin 

with “9” are not part of the NAICS and are 

not listed on the NAICS website 

Census.gov/NAICS. The non-NAICS 

business activity codes are for use on 

Form 990-T to identify various types of 

investments, including certain 

partnership and S corporation interests, 

reported as separate trades or 

businesses under section 512(a)(6) 

without regard to the specific trade or 

business engaged in by the partnership 

or S corporation. See Regulations 

section 1.512(a)-6.

Non-NAICS Business 

Activity Codes

In the codes below that include “###” 

replace “#” with numbers to identify each 

interest (nonqualified S corporation or 

passive income activity). For example, if 

four Schedules A are being filed to report 

unrelated trade or business income from 

four separate nonqualifying S corporation 

interests, the business activity code 

entered in item C at the top of the four 

Schedules A would be 904001, 904002, 

904003, and 904004, respectively.

901101. Investment activities, including:

• Debt-financed income (512(b)(4));

• Qualifying partnership interests;

• Qualifying S corporation interests; and

• Certain gross income of organizations 

subject to section 512(a)(3), or 501(c)(7), 

(9), or (17).

901301. Insurance income derived from 

controlled foreign corporations (section 

512(b)(17)).

903###. Passive income activities with 

controlled organizations.

904###. Nonqualifying S corporation 

interests.

You must report each separate 

unrelated trade or business using the first 

two digits of the NAICS code that most 

accurately describes the unrelated trade 

or business based on the more specific 

NAICS code, such as at the 6-digit level. 

Investment activities reported as 

separate trades or businesses that are 

identified with a non-NAICS business 

activity code should use the 6-digit code 

from the list above. See Regulations 

section 1.512(a)-6(b)(1).

Item C at the top of Schedule A 

requires a 6-digit entry. Enter a 2-digit 

NAICS code by entering the first digits 

followed by four zeros.

Appendix A. Definitions

Section 501(c)(3) organization. 

Section 501(c)(3) describes certain 

organizations which are exempt from 

taxation under section 501(a). A 501(c)

(3) organization is an organization 

organized and operated exclusively for 

charitable purposes. See Regulations 

section 1.501(c)(3)-1(a).

Annual return. An annual return (for 

purposes of the public inspection rules 

discussed below) is an exact copy of the 

Form 990-T that was filed with the IRS, 

including all schedules and attachments. 

It also includes any amendments to the 

original return (amended return).

By annual return (for purposes of the 

public inspection rules discussed below), 

we mean any annual return (defined 

above) that isn't more than 3 years old 

from the later of:

• The date the return is required to be 

filed (including extensions), or

• The date that the return is actually 

filed.

Directly connected expenses. To be 

deductible in computing UBTI, expenses, 

depreciation, and similar items must 

qualify as deductions allowed by section 

162, section 167, or other sections, and 

must be directly connected with the 

conduct of unrelated trade or business 

activity.

To be directly connected with the 

conduct of an unrelated trade or business 

activity, expenses, depreciation, and 

similar items must bear a proximate and 

primary relationship to the conduct of the 

activity. For example, where facilities 

and/or personnel are used both to 

conduct exempt activities and to conduct 

an unrelated trade or business, expenses 

and similar items attributable to such 

facilities and/or personnel must be 

allocated between the two uses on a 

reasonable basis. The portion of any 

such item allocated to the unrelated trade 

or business must bear a proximate and 

primary relationship to that unrelated 

trade or business.

Not substantially related to. “Not 

substantially related to” means the 

activity that produces the income doesn’t 

contribute importantly to the exempt 

purposes of the organization, other than 

the need for funds. Whether an activity 

contributes importantly depends in each 

case on the facts involved.

For details, see Pub. 598, Tax on 

Unrelated Business Income of Exempt 

Organizations.

Trade or business. A trade or business 

is any activity conducted for the 

production of income from selling goods 

or performing services. An activity must 

be conducted with intent to profit to 

constitute a trade or business. An activity 

doesn’t lose its identity as a trade or 

business merely because it is conducted 

within a larger group of similar activities 

that may or may not be related to the 

exempt purpose of the organization. If, 

however, an activity conducted for profit 

is an unrelated trade or business, no part 

of it can be excluded from this 

classification merely because it doesn’t 

result in profit.

Separate trade or business. An 

organization with more than one 

unrelated trade or business should refer 

to Regulations section 1.512(a)-6 to 

determine if two or more trades or 

businesses are separate trades or 

businesses for purposes of calculating 

UBTI.

Unrelated trade or business income. 

Unrelated trade or business income is the 

gross income derived from any trade or 

business (defined above) regularly 

carried on and not substantially related to 

(defined above) the organization's 

exempt purpose or function (aside from 

the organization's need for income or 

funds or the use it makes of the profits).

Generally, for section 501(c)(7), (9), or 

(17) organizations, unrelated trade or 

business income is derived from 

nonmembers with certain modifications 

(see section 512(a)).

For a section 511(a)(2)(B) state 

college or university, or a corporation 

wholly owned by such a college or 

university, unrelated trade or business 

income is derived from activities not 

substantially related to exercising or 

performing any purpose or function 

described in section 501(c)(3).

An unrelated trade or business 

doesn’t include a trade or business:

1. In which substantially all the work 

is performed for the organization without 

compensation; or

2. That is conducted by a section 

501(c)(3) or 511(a)(2)(B) organization 

mainly for the convenience of its 

members, students, patients, officers, or 

employees; or

3. That sells items of work-related 

equipment and clothes, and items 

normally sold through vending machines, 

food dispensing facilities or by snack 

bars, by a local association of employees 

described in section 501(c)(4), organized 

before May 27, 1969, if the sales are for 

30
the convenience of its members at their 

usual place of employment; or

4. That sells merchandise 

substantially all of which was received by 

the organization as gifts or contributions; 

or

5. That consists of qualified public 

entertainment activities regularly 

conducted by a section 501(c)(3), (4), or 

(5) organization as one of its substantial 

exempt purposes (see section 513(d)(2) 

for the meaning of qualified public 

entertainment activities); or

6. That consists of qualified 

convention or trade show activities 

regularly conducted by a section 501(c)

(3), (4), (5), or (6) organization as one of 

its substantial exempt purposes (see 

section 513(d)(3) for the meaning of 

qualified convention and trade show 

activities); or

7. That furnishes one or more 

services described in section 501(e)(1)

(A) by a hospital to one or more hospitals 

subject to conditions in section 513(e); or

8. That consists of qualified pole 

rentals, as defined in section 501(c)(12)

(D), by a mutual or cooperative telephone 

or electric company; or

9. That includes activities relating to 

the distribution of low-cost articles, each 

costing $12.50 (IRC 1 per Rev. Proc. 

2022-38, section 3.34(1)) or less, by an 

organization described in section 501 

and contributions to which are deductible 

under section 170(c)(2) or (3) if the 

distribution is incidental to the solicitation 

of charitable contributions; or

10. That includes the exchange or 

rental of donor or membership lists 

between organizations described in 

section 501 and contributions to which 

are deductible under section 170(c)(2) or 

(3); or

11. That consists of bingo games as 

defined in section 513(f). Generally, a 

bingo game isn't included in any 

unrelated trade or business if:

a. Wagers are placed, winners are 

determined, and prizes are 

distributed in the presence of all 

persons wagering in that game; and

b. The game doesn’t compete with 

bingo games conducted by for-profit 

businesses in the same jurisdiction; 

and

c. The game doesn’t violate state or 

local law; or

12. That consists of conducting any 

game of chance by a nonprofit 

organization in the state of North Dakota 

and the conducting of the game doesn’t 

violate any state or local law; or

13. That consists of soliciting and 

receiving qualified sponsorship payments 

that are solicited or received after 

December 31, 1997. Generally, qualified 

sponsorship payment means any

payment to a tax-exempt organization by 

a person engaged in a trade or business 

in which there is no arrangement or 

expectation of any substantial return 

benefit by that person other than the use 

or acknowledgment of that person's 

name, logo, or product lines in 

connection with the activities of the 

tax-exempt organization. See section 

513(i).

Appendix B. Charitable 

Contribution Deduction

Charitable contributions. Filers should 

use the following information regarding 

the charitable contribution deduction to 

complete Form 990-T, Part I, line 4.

Corporations. The total amount claimed 

normally can’t be more than 10% of UBTI 

figured without regard to the following.

• Any deduction for contributions.

• Any capital loss carryback to the tax 

year under section 1212(a)(1).

Corporations on the accrual basis can 

elect to deduct contributions paid by the 

15th day of the 4th month after the end of 

the tax year if the contributions are 

authorized by the board of directors 

during the tax year. Attach a declaration 

statement to the return stating that the 

resolution authorizing the contributions 

was adopted by the board of directors 

during the tax year. The declaration 

statement must also include the date the 

resolution was adopted. See Regulations 

section 1.170A-11.

Charitable contributions over the 10% 

limitation can’t be deducted for the tax 

year, but may be carried over to the next 

5 tax years.

In figuring the charitable contributions 

deduction, if the corporation has an NOL 

carryover to the tax year, the 10% limit is 

applied using the taxable income after 

taking into account any deduction for the 

NOL.

To figure the amount of any remaining 

NOL carryover to later years, taxable 

income must be modified. See section 

172(b). To the extent charitable 

contributions are used to reduce taxable 

income for this purpose and increase an 

NOL carryover, a contributions carryover 

isn't allowed. See section 170(d)(2)(B).

Trusts. In general. 

1. For contributions to organizations 

described in section 170(b)(1)(A), the 

amount claimed may not be more than 

50% of the UBTI figured without this 

deduction; and

2. For contributions to other 

organizations, the amount claimed may 

not be more than the smaller of:

a. 30% of UBTI figured without this 

deduction; or

b. The amount by which 50% of the 

UBTI is more than the contributions 

allowed in (1) above.

An increased limitation may be 

available for cash contributions under 

section 170(b)(1)(G).

Contributions not allowable in 

whole or in part because of the 

limitations may not be deducted 

as a business expense but may be 

carried over to the next 5 tax years.

Substantiation requirements. 

Generally, no deduction is allowed for any 

contribution of $250 or more, unless the 

organization gets a written 

acknowledgment from the donee 

organization that shows the amount of 

cash contributed, describes any property 

contributed, and either gives a 

description and a good faith estimate of 

the value of any goods or services 

provided in return for the contribution or 

states that no goods or services were 

provided in return for the contribution. 

The acknowledgment must be obtained 

by the due date (including extensions) of 

the organization's return, or, if earlier, the 

date the return is filed. However, see 

section 170(f)(8) and the related 

regulations for exceptions to this rule. 

Don't attach the acknowledgment to the 

return but keep it with the organization's 

records.

Note. For contributions of cash, check, 

or other monetary gifts (regardless of the 

amount), the organization must maintain 

a bank record, or a receipt, letter, or other 

written communication from the donee 

organization indicating the name of the 

organization, the date of the contribution, 

and the amount of the contribution.

Contributions of property other than 

cash. If an organization contributes 

property other than cash and claims over 

a $500 deduction for the property, it must 

attach a statement to the return 

describing the kind of property 

contributed and the method used to 

determine its FMV. All organizations must 

generally complete and attach Form 

8283, Noncash Charitable Contributions, 

to their returns for contributions of 

property (other than money) if the total 

claimed deduction for all property 

contributed was more than $5,000. 

Special rules apply to the contribution of 

certain property. See the instructions for 

Form 8283. A donee organization must 

use Form 8282, Donee Information 

Return, to report information to the IRS 

and donors about dispositions of certain 

CAUTION

!

31
charitable deduction property made 

within 3 years after the donor contributed 

the property. See the instructions for 

Form 8282.

Special rules for contributions of certain easements in registered historic 

districts. The following rules apply to 

certain contributions of real property 

interests located in a registered historic 

district.

• A deduction is allowed for the qualified 

real property interest, if the exterior of the 

building (including the front, side, rear, 

and space above the building) is 

preserved and no portion of the exterior 

is changed in a manner that is 

inconsistent with its historical character. 

See section 170(h)(4)(B).

• A deduction is allowed on the building 

only (no deduction is allowed for a 

structure or land) if located in a registered 

historic district. However, if listed in the 

National Register, a deduction is also 

allowed for structures or land areas. See 

section 170(h)(4)(C).

• The organization must also include the 

following information with the tax return.

1. A qualified appraisal (as defined in 

section 170(f)(11)(E)) of the qualified 

property interest.

2. Photographs of the entire exterior 

of the building.

3. A description of all restrictions on 

the development of the building. See 

section 170(h)(4)(B)(iii).

• The organization's deduction may be 

reduced if rehabilitation credits were 

claimed on the building. See section 

170(f)(14).

• A $500 filing fee may apply to certain 

deductions over $10,000. See section 

170(f)(13).

Reduced deductions for contributions 

for certain property. The organization

must reduce its deduction for 

contributions of certain capital gain 

property and qualified appreciated stock. 

See sections 170(e)(1) and 170(e)(5).

Special rules for corporations. A 

larger deduction is allowed for certain

contributions of:

• Inventory and other property to certain 

organizations for use in the care of the ill, 

needy, or infants (including contributions 

of apparently wholesome food (see 

section 170(e)(3)(C))); and

• Scientific equipment used for research 

to institutions of higher learning or to 

certain scientific research organizations 

(see section 170(e)(4)).

See section 170, the related 

regulations, and Pub. 526, Charitable 

Contributions.

Appendix C. Public 

Inspection of Form 

990-T Returns Filed by 

Section 501(c)(3) 

Organizations

Public inspection requirements of 

section 501(c)(3) organizations. 

Under section 6104(d), a section 501(c)

(3) organization that files Form 990-T 

must make its entire annual exempt 

organization business income tax return 

(including amended returns) available for 

public inspection.

The Form 990-T and related 

schedules must be made available for 

public inspection for a period of 3 years 

from the date the Form 990-T is required 

to be filed, including any extension.

What schedules and attachments to 

Form 990-T must be made available 

for public inspection? Only schedules, 

attachments (statements), and 

supporting documents that relate to the 

imposition of tax on UBTI must be made 

available for public inspection when 

attached to a section 501(c)(3) 

organization's Form 990-T filed after 

August 17, 2006.

The following documents, when 

attached to a section 501(c)(3) 

organization's Form 990-T filed after 

August 17, 2006, aren't required to be 

made available for public inspections.

• Form 926, Return by a U.S. Transferor 

of Property to a Foreign Corporation.

• Form 5471, Information Return of U.S. 

Persons With Respect to Certain Foreign 

Corporations.

• Form 8271, Investor Reporting of Tax 

Shelter Registration Number.

• Form 8594, Asset Acquisition 

Statement Under Section 1060.

• Form 8621, Information Return by a 

Shareholder of a Passive Foreign 

Investment Company or Qualified 

Electing Fund.

• Form 8832, Entity Classification 

Election.

• Form 8858, Information Return of U.S. 

Persons With Respect to Foreign 

Disregarded Entities.

• Form 8865, Return of U.S. Person With 

Respect to Certain Foreign Partnerships.

• Form 8886, Reportable Transaction 

Disclosure Statement.

• Form 8913, Credit for Federal 

Telephone Excise Tax Paid.

• Form 8925, Report of 

Employer-Owned Life Insurance 

Contracts.

• Form 8941, Credit for Small Employer 

Health Insurance Premiums.

• Form 8975, Country-by-Country 

Report.

How does a 501(c)(3) organization 

make its annual returns available for 

public inspection? A 501(c)(3) 

organization must make its annual returns 

available in two ways.

• By office visitation.

• By providing copies or making them 

widely available.

Public inspection by office visitation. 

A 501(c)(3) organization must make its 

annual returns available for public 

inspection without charge at its principal, 

regional, and district offices during 

regular business hours.

Conditions that may be set for public 

inspection at the office. A 501(c)(3) 

organization:

• May have an employee present,

• Must allow the individual conducting 

the inspection to take notes freely during 

the inspection, and

• Must allow an individual to make 

photocopies of documents at no charge 

but only if the individual brings 

photocopying equipment to the place of 

inspection.

Determining if a site is a regional or 

district office. A regional or district 

office is any office of a 501(c)(3) 

organization, other than its principal 

office, that has paid employees whose 

total number of paid hours a week are 

normally 120 hours or more. Include the 

hours worked by part-time (as well as 

full-time) employees in making that 

determination.

What sites aren't considered a 

regional or district office. A site isn't 

considered a regional or district office if:

1. The only services provided at the 

site further the organization's exempt 

purposes (for example, daycare, health 

care, or scientific or medical research); 

and

2. The site doesn’t serve as an office 

for management staff, other than 

managers who are involved only in 

managing the exempt function activities 

at the site.

What if the 501(c)(3) organization 

doesn’t maintain a permanent office? 

If the 501(c)(3) organization doesn’t 

maintain a permanent office, it will 

comply with the public inspection by 

office visitation requirement by making 

the annual returns available at a 

reasonable location of its choice. It must 

permit public inspection:

• Within a reasonable amount of time 

after receiving a request for inspection 

(normally, not more than 2 weeks), and

• At a reasonable time of day.

Optional method of complying. If a 

501(c)(3) organization that doesn’t have 

a permanent office wishes not to allow an 

inspection by office visitation, it may mail 

32
a copy of the requested documents 

instead of allowing an inspection. 

However, it must mail the documents 

within 2 weeks of receiving the request 

and may charge for copying and postage 

only if the requester consents to the 

charge.

501(c)(3) organizations with a 

permanent office but limited or no 

hours. Even if a 501(c)(3) organization 

has a permanent office but no office 

hours or very limited hours during certain 

times of the year, it must still meet the 

office visitation requirement. To meet this 

requirement during those periods when 

office hours are limited or not available, 

follow the rules under What if the 501(c)

(3) organization doesn’t maintain a 

permanent office, earlier.

Public Inspection—Providing 

Copies

A 501(c)(3) organization must provide 

copies of its annual returns to any 

individual who makes a request for a 

copy in person or in writing unless it 

makes these documents widely available.

In-person requests for document copies. A 501(c)(3) organization must 

provide copies to any individual who 

makes a request in person at the 501(c)

(3) organization's principal, regional, or 

district office during regular business 

hours on the same day that the individual 

makes the request.

Accepted delay in fulfilling an 

in-person request. If unusual 

circumstances exist and fulfilling a 

request on the same day places an 

unreasonable burden on the 501(c)(3) 

organization, it must provide copies by 

the earlier of:

• The next business day following the 

day that the unusual circumstances end, 

or

• The fifth business day after the date of 

the request.

Examples of unusual circumstances 

include:

• Receipt of a volume of requests (for 

document copies) that exceeds the 

501(c)(3) organization's daily capacity to 

make copies,

• Requests received shortly before the 

end of regular business hours that require 

an extensive amount of copying, or

• Requests received on a day when the 

501(c)(3) organization's managerial staff 

capable of fulfilling the request is 

conducting official duties (for example, 

student registration or attending an 

off-site meeting or convention) instead of 

its regular administrative duties.

Use of local agents for providing 

copies. A 501(c)(3) organization may 

use a local agent to handle in-person 

requests for document copies. If a 501(c)

(3) organization uses a local agent, it 

must immediately provide the local 

agent's name, address, and telephone 

number to the requester.

The local agent must:

• Be located within reasonable proximity 

to the principal, regional, or district office 

where the individual makes the request; 

and

• Provide document copies within the 

same time frames as the 501(c)(3) 

organization.

Written requests for document copies. If a 501(c)(3) organization receives 

a written request for a copy of its annual 

returns (or parts of these documents), it 

must give a copy to the requester. 

However, this rule only applies if the 

request:

• Is addressed to a 501(c)(3) 

organization's principal, regional, or 

district office;

• Is delivered to that address by mail, 

electronic mail (email), facsimile (fax), or 

a private delivery service approved by the 

IRS (see Private Delivery Service, earlier, 

for a list); and

• Gives the address to which the 

document copies should be sent.

How and when a written request is 

fulfilled. 

• Requested document copies must be 

mailed within 30 days from the date the 

501(c)(3) organization receives the 

request.

• Unless other evidence exists, a 

request or payment that is mailed is 

considered to be received by the 501(c)

(3) organization 7 days after the postmark 

date.

• If an advance payment is required, 

copies must be provided within 30 days 

from the date payment is received.

• If the 501(c)(3) organization requires 

payment in advance and it receives a 

request without payment or with 

insufficient payment, it must notify the 

requester of the prepayment policy and 

the amount due within 7 days from the 

date it receives the request.

• A request that is transmitted to the 

501(c)(3) organization by email or fax is 

considered received the day the request 

is transmitted successfully.

• Requested documents can be emailed 

instead of the traditional method of 

mailing if the requester consents to this 

method.

A document copy is considered as 

provided on the:

• Postmark date,

• Private delivery date,

• Registration date for certified or 

registered mail,

• Postmark date on the sender's receipt 

for certified or registered mail, or

• Day the email is successfully 

transmitted (if the requester agreed to 

this method).

Requests for parts of a document 

copy. A person can request all or any 

specific part or schedule of the annual 

returns and the 501(c)(3) organization 

must fulfill their request for a copy.

Can an agent be used to provide 

copies? A 501(c)(3) organization can 

use an agent to provide document copies 

for the written requests it receives. 

However, the agent must provide the 

document copies under the same 

conditions that are imposed on the 501(c)

(3) organization itself. Also, if an agent 

fails to provide the documents as 

required, the 501(c)(3) organization will 

continue to be subject to penalties.

Example. The ABC Organization 

retained an agent to provide copies for all 

written requests for documents. However, 

the ABC Organization received a request 

for document copies before the agent 

did.

The deadline for providing a response 

is referenced by the date that the ABC 

Organization received the request and 

not when the agent received it. If the 

agent received the request first, then a 

response would be referenced to the date 

that the agent received it.

Can a fee be charged for providing 

copies? A 501(c)(3) organization may 

charge a reasonable fee for providing 

copies. Also, it can require the fee to be 

paid before providing a copy of the 

requested document.

What is a reasonable fee? A fee is 

reasonable only if it is no more than the 

per-page copying fee charged by the IRS 

for providing copies, plus no more than 

the actual postage costs incurred to 

provide the copies.

What forms of payment must the 

501(c)(3) organization accept? The 

form of payment depends on whether the 

request for copies is made in person or in 

writing.

Cash and money orders must be 

accepted for in-person requests for 

document copies. The 501(c)(3) 

organization, if it wishes, may accept 

additional forms of payment.

Certified check, money order, and 

either personal check or credit card must 

be accepted for written requests for 

document copies. The 501(c)(3) 

organization, if it wishes, may accept 

additional forms of payment.

Other fee information. If a 501(c)(3) 

organization provides a requester with 

notice of a fee and the requester doesn’t 

pay the fee within 30 days, the 501(c)(3) 

organization may ignore the request.

If a requester's check doesn’t clear on 

deposit, the 501(c)(3) organization may 

ignore the request.

If a 501(c)(3) organization doesn’t 

require prepayment and the requester 

33
doesn’t prepay, the 501(c)(3) 

organization must receive consent from 

the requester if the copying and postage 

charge exceeds $20.

501(c)(3) organizations subject to a 

harassment campaign. If the IRS 

determines that a 501(c)(3) organization 

is being harassed, it isn't required to 

comply with any request for copies that it 

reasonably believes is part of the 

harassment campaign.

A group of requests for a 501(c)(3) 

organization's annual return is indicative 

of a harassment campaign if the requests 

are part of a single coordinated effort to 

disrupt the operations of the 501(c)(3) 

organization rather than to collect 

information about it.

Requests that may be disregarded 

without IRS approval. A 501(c)(3) 

organization may disregard any request 

for copies of all or part of any document 

beyond the first two received within any 

30-day period or the first four received 

within any 1-year period from the same 

individual or the same address.

Making the Annual Returns 

Widely Available

A 501(c)(3) organization doesn’t have to 

provide copies of its annual returns if it 

makes these documents widely available. 

However, it must still allow public 

inspection by office visitation.

How does a 501(c)(3) organization 

make its annual returns widely available? A 501(c)(3) organization's annual 

returns are widely available if it meets all 

four of the following requirements.

1. The Internet posting requirement 

is met if:

• The document is posted on an Internet 

page that the 501(c)(3) organization 

establishes and maintains, or

• The document is posted as part of a 

database of like documents of other 

tax-exempt organizations on an Internet 

page established and maintained by 

another entity.

2. An additional posting information 

requirement is met if:

• The Internet page through which the 

document is available clearly informs 

readers that the document is available 

and provides instructions for downloading 

the document;

• After it is downloaded and viewed, the 

web document exactly reproduces the 

image of the annual return as it was 

originally filed with the IRS, except for any 

information permitted by statute to be 

withheld from public disclosure; and

• Any individual with access to the 

Internet can access, download, view, and 

print the document without special 

computer hardware or software required 

for that format (except software that is 

readily available to members of the public 

without payment of any fee) and without 

payment of a fee to the 501(c)(3) 

organization or to another entity 

maintaining the web page.

3. The reliability and accuracy 

requirements are met if the entity 

maintaining the Internet page:

• Has procedures for ensuring the 

reliability and accuracy of the document 

that it posts on the page;

• Takes reasonable precautions to 

prevent alteration, destruction, or 

accidental loss of the document when 

posted on its page; and

• Corrects or replaces the document if a 

posted document is altered, destroyed, or 

lost.

4. The notice requirement is met if a 

501(c)(3) organization notifies any 

individual requesting a copy of its annual 

return where the documents are available 

(including the Internet address). If the 

request is made in person, the 501(c)(3) 

organization must notify the individual 

immediately. If the request is in writing, it 

must notify the individual within 7 days of 

receiving the request.

Penalties

A penalty may be imposed on any person 

who doesn’t make the annual returns 

(including all required attachments) 

available for public inspection according 

to the section 6104(d) rules discussed 

earlier. If more than one person fails to 

comply, each person is jointly and 

severally liable for the full amount of the 

penalty. The penalty amount is $20 for 

each day during which a failure occurs. 

The maximum penalty that may be 

imposed on all persons for any one 

annual return is $10,000.

Any person who willfully fails to 

comply with the section 6104(d) public 

inspection requirements is subject to an 

additional penalty of $5,000.

34
Index

A

Accounting method 6

Accounting Period 7

Alcohol and Cellulosic Biofuel Fuels 

Credit 19

Alternative Minimum Tax (Trusts 

Only) 11

Amortization 21

Annual return 30

Appendix A. Definitions 30

Appendix B. Charitable Contribution 

Deduction 31

Appendix C. Public Inspection of 

Form 990-T Returns Filed by 

Section 501(c)(3) Organizations 8

B

Backup Withholding 12

Biodiesel and Renewable Diesel Fuels 

Credit 19

C

Capital Gain Net Income 17

Capital Loss Deduction for Trusts 18

Certain Activities and Other 

Information:

Signature or other authority over a 

financial account in a foreign 

country:

Report of Foreign Bank and 

Financial Accounts (FBAR)

Change in address:

Archer MSA 8

Coverdell ESA 8

IRA, SEP, or SIMPLE 8

Qualified ABLE Program 8

Qualified State Tuition Program 8

Roth IRA 8

Charitable contributions 31

Charitable Contributions 9

Compensation of Officers, Directors, 

and Trustees 27

Consolidated periodicals 27

Cost of Goods Sold 23

Credit for Prior Year Minimum Tax 11

Credit for Small Employer Health 

Insurance Premiums:

Tax-exempt eligible small 

employer 12

D

Debt-financed property 

disposition 17

Deduction for Net Operating Loss 9

Deductions Not Taken Elsewhere:

Directly connected expenses 19

Depletion 22

Disposition of property received from 

taxable subsidiary 17

Disregarded entity 2

E

Employer-owned life insurance 

contracts 19

Estimated Tax Payments 12

Estimated Tax Penalty 13

Exceptions and special rules:

Member income of mutual or 

cooperative electric companies.:

Income from qualifying shipping 

activities. 15

Passive loss and at-risk 

limitations. 15

Exploited Exempt Activity Income, 

Other Than Advertising Income 27

F

Foreign Organizations 12

Foreign Tax Credit 11

G

Gain or loss on disposition of certain 

brownfield property 17

General Business Credit:

Refundable small employer tax 

credit 11

Gross Receipts or Sales:

Advance payments:

Installment sales

I

Income from property financed with 

qualified 501(c)(3) bonds 19

Income or (Loss) From a Partnership 

or an S Corporation 18

Interest 21

Interest, Annuities, Royalties, and 

Rents From Controlled 

Organizations:

Controlled organization 25

Qualifying specified payment 25

Specified payment 25

L

Limitations on Deductions:

Activities Lacking a Profit Motive 19

Deductions Related to Property 

Leased to Tax-Exempt Entities 19

Preference Items 19

Section 263A Uniform Capitalization 

Rules 19

Transactions Between Related 

Taxpayers 19

N

Name and Address:

Change of name. 8

Net Gain or (Loss) 18

Net Operating Loss (NOL) 22

Nonaccrual experience method 17

O

Organizations described in section 

501(c)(19) 19

Organizations Taxable as 

Corporations. 10

Other Credits 11

Other Deductions:

Extraterritorial income exclusion 22

Other tax amounts:

Excess distribution from a passive 

foreign investment company 

(PFIC) 10

P

Partnerships 18

Passive foreign investment company 

(PFIC) shareholders 19

Payment card and third party network 

transactions 16

Proxy Tax 10

Public Inspection Requirements of 

Section 501(c)(3) 8

Purpose of Form 1

R

Recapture of investment credit:

Recapture of low-income housing 

credit:

Interest due under the look-back 

method. 11

Recoveries of bad debts deducted 19

Rent Income 23

Reporting 990-T Information on Other 

Returns 8

Rounding Off to Whole Dollars 8

S

S Corporations:

Qualified tax-exempts:

Exception 18

Section 199A Deduction 10

Section 263A Uniform Capitalization 

Rules:

Indirect expenses 20

Interest expense 20

Section 481(a) adjustment 7

Section 501(c)(3) organization 30

Section 965 Payments:

Net tax liability in installments 12

Separate trades or businesses:

Dual-use property:

Which Parts to Complete 14

Substantiation requirements 31

Supplemental Information:

Signature:

Paid preparer 13

Special rule for IRA trusts 13

T

Tax and Payments 11

Tax Due:

Pay by credit or debit card:

IRS.gov/E-pay 13

Tax on Noncompliant Facility 

Income 11

Tax Rate Schedule for Trusts 10

Total of Unrelated Business Taxable 

Income Computed From all 

Unrelated Trades or Businesses 9

Total Tax 12

Total Unrelated Business Taxable 

Income 9

Travel, Meals, and Entertainment 20

35
Trust filers only:

Qualified Business Income Deduction:

Determines the unrelated business 

income separately for each 

unrelated trade or business 10

U

Unrelated Debt-Financed Income 24

Unrelated Trade or Business Income:

Purpose of the Schedule 14

W

When are section 263A capitalized 

costs deductible:

Exceptions 20

Who Must File 1

36