Must revenues and expenses attributable to foreign investments be taken into account in determining whether the organization has more than $10,000 from activities outside of the United States (i.e., in answering Form 990, Part IV, line 14b)?

Yes, revenues and expenses from or attributable to foreign investments must be taken into account in answering Form 990, Part IV, line 14b, except those from or attributable to financial accounts reported on Form 990, Part V, lines 4a and 4b. In the case of indirect investments made through investment entities, the extent to which revenue or expenses are taken into account will depend upon whether the investment entity is treated as a partnership or corporation for United States tax purposes. The instructions require the reporting of activities conducted indirectly through joint ventures.

For example, an organization with an interest in a foreign partnership would need to take into account its share of the partnership’s revenue and expenses in determining whether the $10,000 threshold is exceeded. On the other hand, and consistent with the general treatment of separate corporations elsewhere on the Form 990, the organization need not take into account or report any portion of the revenues, expenses, or expenditures of a foreign corporation in which it holds an investment, provided that the corporation is treated as a separate corporation for United States tax purposes. See tip #9 regarding the reporting of foreign investments.