Future developments.The IRS has created a page on IRS.gov for information about Form 990 and its instructions, at www.irs.gov/form990. Information about any future developments affecting Form 990 (such as legislation enacted after we release it) will be posted on that page.
Terms in bold are defined in the Glossary of the Instructions for Form 990.
Schedule R (Form 990) is used by an organization that files Form 990 to provide information on related organizations, on certain transactions with related organizations, and on certain unrelated partnerships through which the organization conducts significant activities.
The chart below sets forth which organizations must complete all or a part of Schedule R and attach Schedule R to Form 990. If an organization is not required to file Form 990 but chooses to do so, it must file a complete return and provide all of the information requested, including the required schedules.
|Type of filer||IF you answer “Yes” to . . .||THEN you must complete . . .|
|All organizations||Form 990, Part IV, line 33
(regarding disregarded entities)
|Schedule R, Part I.|
|All organizations||Form 990, Part IV, line 34
(regarding related organizations)
|Schedule R, Parts II, III, IV, and V, line 1 as applicable.|
|All organizations||Form 990, Part IV, line 35a
(regarding controlled entities under section 512(b)(13))
|Schedule R, Part V, line 2.|
|Section 501(c)(3) organization||Form 990, Part IV, line 36
(regarding transfers to exempt noncharitable related organizations)
|Schedule R, Part V, line 2.|
|All organizations||Form 990, Part IV, line 37
(regarding conduct of activity through unrelated partnership)
|Schedule R, Part VI.|
Part I requires identifying information on any organization that is treated for federal tax purposes as a disregarded entity. Part II requires identifying information on related tax-exempt organizations. Part III requires identifying information on any related organization that is treated for federal tax purposes as a partnership. Part IV requires identifying information on any related organization that is treated for federal tax purposes as a C or S corporation or trust. Part V requires information on transactions between the organization and related organizations (excluding disregarded entities). Part VI requires information on an unrelated organization taxable as a partnership through which the organization conducted more than 5% of its activities (as described in Part VI).
Parts I-VI of Schedule R (Form 990) may be duplicated if additional space is needed to report additional related organizations for Parts I-IV, additional transactions for Part V, or additional unrelated organizations for Part VI. Use as many duplicate copies as needed, and number each page of each part.
Part VII of Schedule R (Form 990) may be used to provide additional information in response to questions in Schedule R.
An organization, including a nonprofit organization, a stock corporation, a partnership or limited liability company, a trust, and a governmental unit or other government entity, is a related organization to the filing organization if it stands, at any time during the tax year, in one or more of the following relationships to the filing organization.
Parent—an organization that controls (see definitions of control under Definition of Control) the filing organization.
Subsidiary—an organization controlled by the filing organization.
Brother/Sister—an organization controlled by the same person or persons that control the filing organization.
Supporting/Supported—an organization that is (or claims to be) at any time during the organization's tax year (i) a supporting organization of the filing organization within the meaning of section 509(a)(3), if the filing organization is a supported organization within the meaning of section 509(f)(3), or (ii) a supported organization, if the filing organization is a supporting organization.
Sponsoring Organization of a VEBA: an organization that establishes or maintains a section 501(c)(9) voluntary employees' beneficiary association (VEBA) during the tax year. A sponsoring organization of a VEBA also includes an employee organization, association, committee, joint board of trustees, or other similar group of representatives of the parties which establish or maintain a VEBA.
Contributing Employer of a VEBA: an employer that makes a contribution or contributions to the VEBA during the tax year.
Organizations A and B each appoint one-third of the board members of Organizations C and D, and are not otherwise related to Organizations C and D. Although neither Organization A nor Organization B is a parent of Organization C or Organization D, Organizations C and D are controlled by the same persons, and therefore are brother/sister related organizations with respect to each other.
B, an exempt organization, wholly owns (by voting power) C, a taxable corporation. C holds a 51% profits interest in D, a partnership. Under the principles of section 318, B is deemed to own 51% of D (100% of C's 51% interest in D). Thus, B controls both C and D, which are therefore both related organizations with respect to B.
X, an exempt organization, owns 80% (by value) of Y, a taxable corporation. Y holds a 60% profits interest as a limited partner of Z, a limited partnership. Under the principles of section 318, X is deemed to own 48% of Z (80% of Y's 60% interest in Z). Thus, X controls Y. X does not control Z through X's ownership in Y. Y is a related organization with respect to X, and (absent other facts) Z is not.
Same facts as in Example 2, except that Y is also one of three general partners of Z. Because Y controls Z through means other than ownership percentage, and X controls Y, in these circumstances, Z is a related organization with respect to X. The other general partners of Z (if organizations) are not related organizations with respect to X, absent other facts.
Organizations A, B, C, and D are nonprofit organizations. Organization A appoints the board of Organization B, which appoints the board of Organization C. A majority of the board members of Organization D are also board members of Organization A. Under these circumstances, Organizations B and D are directly controlled by Organization A, and Organization C is indirectly controlled by Organization A. Therefore, Organizations B, C, and D are subsidiaries of Organization A; Organization C is also a subsidiary of Organization B; and Organizations B and C have a brother/sister relationship with Organization D.
An organization that is a central or subordinate organization in a group exemption (whether filing an individual return or a group return) is not required to list any of the subordinate organizations of the group in Schedule R, Part II.
In the case of a group return, the central organization must attach a list of the subordinate organizations included in the group return in response to Form 990, page one, item H(b). The central organization must list in Schedule R the related organizations of each subordinate organization other than (1) related organizations that are included within the group exemption, or (2) related organizations that the central organization knows to be included in another group exemption. If an organization is not listed because it is known to be included in another group exemption, the central organization must explain in Part VII the relationship between its own group and members and the related organization known to be included in another group exemption (but you need not include the names of such related organizations).
An organization that is not included in a group exemption is not required to list a related organization that is included in a group exemption. Similarly, an organization that is included in a group exemption is not required to list a related organization that is included in another group exemption. In either case, the organization must explain in Part VII the relationship between it and the related organization included in another group exemption (but you need not include the names of such related organizations).
Even if a related organization is not required to be listed in Part II, however, the organization must report its transactions with the related organization in Part V, as required by the Part V instructions (for example, transactions over the applicable $50,000 reporting threshold for line 2), including listing the name of the related organization in Part V, line 2, column (a), for transactions that must be reported in line 2.
|More Online Instructions|