Specific Instructions

Part I. Identification of Disregarded Entities

Enter the details of each disregarded entity on separate lines of Part I. If there are more disregarded entities to report in Part I than space available, use as many duplicate copies of Part I as needed, and number each page.

Column (a). Name, address, and EIN.   Enter the full legal name and mailing address of the disregarded entity. Also enter the employer identification number (EIN) of the disregarded entity, if it has one.

  
A disregarded entity generally must use the EIN of its sole member. An exception applies to employment taxes: for wages paid to employees of a disregarded entity, the disregarded entity must file separate employment tax returns and use its own EIN on such returns. See Regulations sections 301.6109-1(h) and 301.7701-2(c)(2)(iv).

Column (b). Primary activity.   Briefly describe the primary activity of the disregarded entity.

Column (c). Legal domicile.   List the U.S. state (or U.S. possession) or foreign country in which the disregarded entity is organized (the state or foreign country whose law governs the disregarded entity's internal affairs).

Column (d). Total income.   Enter the amount of the filing organization's total revenue reported in Form 990, Part VIII, line 12, column (A), attributable to the disregarded entity.

Column (e). End-of-year assets.   Enter the amount of the organization's total assets reported in Form 990, Part X, line 16, column (B), attributable to the disregarded entity.

Column (f). Direct controlling entity.   Enter the name of the entity that directly controls the disregarded entity. For instance, if B is a disregarded entity of the filing organization, and if C is a disregarded entity of B, report B as the direct controlling entity of C. If the filing organization directly controls, enter its name.

Part II. Identification of Related Tax-Exempt Organizations

For purposes of Schedule R, treat governmental units and instrumentalities and foreign governments as tax-exempt organizations.

Enter the details of each related organization on separate lines of Part II. If there are more related organizations to report in Part II than space available, use as many duplicate copies of Part II as needed, and number each page.

Column (a). Name, address, and EIN.   Enter the related organization's full legal name, mailing address, and EIN.

Column (b). Primary activity.   Briefly describe the primary activity of the related organization.

Column (c). Legal domicile.   List the U.S. state (or U.S. possession) or foreign country in which the related organization is organized. For a corporation, enter the state of incorporation (or the country of incorporation for a foreign corporation formed outside the United States). For a trust or other entity, enter the state whose law governs the organization's internal affairs (or the foreign country whose law governs for a foreign organization other than a corporation).

Column (d). Exempt Code section.   Enter the section under which the related organization is exempt (for example, section 501(c)(3) for a public charity, section 501(c)(6) for a business league, or section 527 for a separate segregated fund). For purposes of Schedule R, an organization that claims exemption is treated as exempt. Also for purposes of Schedule R, treat as a section 501(c)(3) organization a related foreign organization recognized as a charity by the foreign country, or for which the filing organization has made a reasonable judgment (or has an opinion of U.S. counsel) that the foreign organization is described in section 501(c)(3). The filing organization is not required to make or obtain such a determination for purposes of Schedule R. For governmental units, instrumentalities, and foreign governments that do not have a section 501(c) determination letter, leave blank.

Column (e). Public charity status.   For a related section 501(c)(3) organization, report its public charity status, using the appropriate line number (line 1 through 11d) corresponding to the public charity status checked on Schedule A (Form 990), Public Charity Status and Public Support, Part I. If the related organization is a private foundation, use the designation “PF.” If the related organization is a section 509(a)(3) supporting organization, also indicate its type: I, II, III-FI, or III-O (for Type I, Type II, Type III functionally integrated, or Type III other, respectively).

  For purposes of Schedule R, treat as a public charity a related foreign organization that has not been recognized as a section 501(c)(3) public charity by the IRS but for which the filing organization has made a good faith determination, based on an affidavit from the foreign organization or the opinion of counsel, that the foreign organization is the equivalent of a public charity. The filing organization is not required to make or obtain such a determination for purposes of Schedule R; if it has not, leave column (e) blank.

Column (f). Direct controlling entity.   Enter the name of the entity (if any) that directly controls the related organization; otherwise enter “N/A.” If the filing organization directly controls, enter its name.

Column (g). Section 512(b)(13) controlled entity.   Check “Yes” if the related organization is a controlled entity of the filing organization under section 512(b)(13). If not, check “No.

Part III. Identification of Related Organizations Taxable as a Partnership

In this part, identify any related organization treated as a partnership for federal tax purposes. If the partnership is related to the filing organization by reason of being its parent or brother/sister and the filing organization is not a partner or member in the partnership, then complete only columns (a), (b), and (c), and enter “N/A” in columns (d), (e), (f), (g), (i), and (k).

Enter the details of each related organization on separate lines of Part III. If there are more related organizations to report in Part III than space available, use as many duplicate copies of Part III as needed, and number each page.

Some of the information requested in this part is derived from Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc., issued to the organization. If the Schedule K-1 (Form 1065) is not available, provide a reasonable estimate of the required information.

Column (a). Name, address, and EIN.   Enter the related partnership's full legal name, mailing address, and EIN.

Column (b). Primary activity.   Briefly describe the primary business activity conducted, or product or service provided, by the related partnership (for example, investment in other entities, low-income housing, etc.).

Column (c). Legal domicile.   List the U.S. state (or U.S. possession) or foreign country in which the related partnership is organized (the state or foreign country whose law governs the related partnership's internal affairs).

Column (d). Direct controlling entity.   Enter the name of the entity (if any) that directly controls the related partnership; otherwise enter “N/A.” If the filing organization directly controls, enter its name.

Column (e). Predominant income.   Classify the predominant type of partnership income as:
  • Related;

  • Unrelated; or

  • Excluded from tax under section 512, 513, or 514.

In other words, enter which of the three types listed above is more prevalent than the others.

  For classification purposes, use the definitions of columns (B), (C), and (D) set forth in the instructions to the Statement of Revenue in Form 990, Part VIII.

Column (f). Share of total income.   Enter the dollar amount of the filing organization's distributive share of the related partnership's total income, in accordance with the organization's profits interest as specified by the partnership or LLC agreement, for the related partnership's tax year ending with or within the filing organization's tax year. Use the total amount reported by the related partnership on Schedule K-1 (Form 1065) for the partnership's tax year ending with or within the filing organization's tax year (total of Schedule K-1, Part III, lines 1 through 11 and 18, tax-exempt income).

Column (g). Share of end-of-year assets.   Enter the dollar amount of the filing organization's distributive share of the related partnership's end-of-year total assets, in accordance with the organization's capital interest as specified by the partnership or LLC agreement, for the related partnership's tax year ending with or within the filing organization's tax year. Use Schedule K-1 (Form 1065) for the partnership's year ending with or within the organization's tax year to determine this amount by adding the organization's ending capital account to the organization's share of the partnership's liabilities at year end reported on the Schedule K-1.

Column (h). Disproportionate allocations.   Check “Yes” if the interest of the filing organization as a partner of the partnership (or as a member of the LLC) in any item of income, gain, loss, deduction, or credit, or any right to distributions was disproportionate to the filing organization's investment in such partnership or LLC at any time during the filing organization's tax year. Otherwise, check “No.

Column (i). Code V—UBI amount in box 20 of Schedule K-1 (Form 1065).   Enter the dollar amount, if any, listed as the Code V amount (unrelated business taxable income) in box 20 of Schedule K-1 (Form 1065) received from the related partnership for the partnership's tax year ending with or within the filing organization's tax year. If no Code V amount is listed in box 20, enter “N/A.

  
If the organization has reason to believe that the stated amount in box 20 is incorrect, it should consult with the partnership. The stated amount in box 20 is not controlling with respect to the organization's unrelated business income tax liability.

Column (j). General or managing partner.   Check “Yes” if the filing organization was at any time during its tax year a general partner of a related limited partnership, or a managing partner or managing member of a related general partnership, LLC, or other entity taxable as a partnership. Otherwise, check “No.

Column (k). Percentage ownership.   Enter the filing organization's percentage interest in the profits or in the capital of the related partnership, whichever is greater.

Part IV. Identification of Related Organizations Taxable as a Corporation or Trust

In this part, identify any related organization treated as a C or S corporation or trust for federal tax purposes (such as a charitable remainder trust), other than a related organization reported as a tax-exempt organization in Part II. If the corporation or trust is related to the filing organization as its parent or as a brother/sister organization, and the filing organization does not have an ownership interest in the corporation or trust, then complete only columns (a), (b), (c), and (e), and enter “N/A” in columns (d), (f), (g), and (h). Do not report trusts described within section 401(a).

Some of the information requested in this part is derived from Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc., or Schedule K-1 (Form 1120S), Shareholder's Share of Income, Deductions, Credits, etc., issued to the organization. If the Schedule K-1 is not available, provide a reasonable estimate of the required information.

Enter the details of each related organization on separate lines of Part IV. If there are more related organizations to report in Part IV than space available, use as many duplicate copies of Part IV as needed, and number each page.

Column (a). Name, address, and EIN.   Enter the related organization's full legal name, mailing address, and EIN.

Column (b). Primary activity.   Briefly describe the primary business activity conducted, or product or service provided, by the related organization (for example, holding company, management company).

Column (c). Legal domicile.   List the U.S. state (or U.S. possession) or foreign country in which the related organization is organized. For a corporation, enter the state of incorporation (or the country of incorporation for a foreign corporation formed outside the United States). For a trust or other entity, enter the state whose law governs the organization's internal affairs (or the foreign country whose law governs for a foreign organization other than a corporation).

Column (d). Direct controlling entity.   Enter the name of the entity (if any) that directly controls the related organization; otherwise enter “N/A.” If the filing organization directly controls, enter its name.

Column (e). Type of entity.   Use one of the following codes to indicate the tax classification of the related organization: C (corporation or association taxable under subchapter C), S (corporation or association taxable under subchapter S), or T (trust, including a split-interest trust).

Column (f). Share of total income.   For a related organization that is a C corporation, enter the dollar amount of the organization's share of the C corporation's total income. To calculate this share, multiply the total income of the C corporation (as reported on its Form 1120, U.S. Corporation Income Tax Return) by the following fraction: the value of the filing organization's shares of all classes of stock in the C corporation, divided by the value of all outstanding shares of all classes of stock in the C corporation. The total income is for the related organization's tax year ending with or within the filing organization's tax year.

  For a related organization that is an S corporation, enter the filing organization's allocable share of the S corporation's total income. Use the amount on Schedule K-1 (Form 1120S) for the S corporation's tax year ending with or within the filing organization's tax year (Part III, lines 1 through 10 of Schedule K-1 (Form 1120-S)).

  For a related organization that is a trust, enter the total income and gains reported on Part III, lines 1 through 8 of Schedule K-1 (Form 1041) issued to the filing organization for the trust's tax year ending with or within the filing organization's tax year.

  
A section 501(c)(3) organization that is an S corporation shareholder must treat all allocations of income from the S corporation as unrelated business income, including gain on the disposition of stock.

Column (g). Share of end-of-year assets.   Enter the dollar amount of the filing organization's allocable share of the related organization's total assets as of the end of the related organization's tax year ending with or within the filing organization's tax year. For related C and S corporations, this amount is determined by multiplying the corporation's end-of-year total assets by the fraction described in column (f). For related trusts, this amount corresponds to the filing organization's percentage ownership in the trust.

Column (h). Percentage ownership.   For a related organization taxable as a corporation, enter the filing organization's percentage of stock ownership in the corporation (total combined voting power or total value of all outstanding shares, whichever is greater). For a related S corporation, use the percentage reported on Schedule K-1 (Form 1120S) for the year ending with or within the filing organization's tax year. For a related organization taxable as a trust, enter the filing organization's percentage of beneficial interest. In each case, enter the percentage interest as of the end of the related organization's tax year ending with or within the filing organization's tax year.

Column (i). Section 512(b)(13) controlled entity.   Check “Yes” if the related organization is a controlled entity of the filing organization under section 512(b)(13). If not, check “No.

Split-interest trusts.   If the related organization is a split-interest trust described in section 4947(a)(2), the organization may enter in column (a) the term “Charitable remainder trust,” “Charitable lead trust,” or “Pooled income fund,” as appropriate, instead of the trust's name, EIN, or address. If the organization was related to more than one of a certain type of related split-interest trust during the tax year, it should enter the number of that type of trust in parentheses after the name. For instance, if the organization had two related charitable remainder trusts and three related charitable lead trusts, it should enter “Charitable remainder trusts (2)” on one line of column (a) and “Charitable lead trusts (3)” on another line in column (a). The organization may leave columns (e), (f), (g), and (h) blank for these lines. Use Part VII if the organization needs space to provide additional information for columns (b), (c), (d), or (i).

Part V. Transactions With Related Organizations

Line 1.   Check “Yes” in the appropriate boxes of line 1 if the filing organization engaged in any of the transactions listed in Part V with any of the related organizations listed in Parts II through IV. A single transaction may be described by and reported in more than one line. A “transfer,” for purposes of Part V, lines 1r and 1s, includes any conveyance of funds or property not described in lines 1a through 1q, whether or not for consideration, such as a merger with a related organization.

Line 2.   The filing organization must report on this line any of the following transactions that it engaged in with a controlled entity of the filing organization, as defined in section 512(b)(13), during the tax year.
  • All transactions described in line 1a, which includes all receipts or accruals of interest, annuities, royalties, or rent from a controlled entity under section 512(b)(13), regardless of amount.

  • Any other type of transaction described in lines 1b through 1s with controlled entities, if the amounts involved during the tax year between the filing organization and a particular controlled entity exceed $50,000 for that type of transaction.

    Section 501(c)(3) organizations must also report on line 2 transactions described in Part V, lines 1b through 1s that they engaged in with related tax-exempt organizations not described in section 501(c)(3) (including section 527 political organizations), if the amounts involved during the tax year between the filing organization and a particular related tax-exempt organization exceed $50,000.

  Enter the details of each related organization and each transaction type on a separate line of the table. If there are more related organizations or transaction types to report than space available, use as many duplicate copies of Part V as needed, and number each page. Transactions of a specified type described in lines 1b through 1s with a particular organization do not need to be reported if the total amount of transactions of such type during the tax year did not exceed $50,000.

Column (a). Name.   Enter the full legal name of the related organization.

Column (b). Transaction type.   Enter the transaction type (lines 1a through 1s). Aggregate all transactions of the same type with the same related organization.

Column (c). Amount involved.   The amount involved in a transaction is the fair market value of the services, cash, and other assets provided by the filing organization during its tax year, or the fair market value received by the filing organization, whichever is higher, regardless of whether the transaction was entered into by the parties in a prior year. Any reasonable method for determining such amount is acceptable.

Column (d). Method of determining amount involved.   Describe the method used to determine the value of the services, cash, and other assets reported in column (c).

Split-interest trusts.   If the organization engaged in a type of transaction reportable in Part V, line 2 with one or more split-interest trusts described in section 4947(a)(2), the organization may enter in column (a) the term “Charitable remainder trust.” “Charitable lead trust,” or “Pooled income fund,” as appropriate, instead of the trust's name. For instance, if the organization carried a $100,000 liability for a loan it received from a related charitable lead trust, it should enter “Charitable remainder trust” in column (a), transaction type “e” in column (b), and “$100,000” in column (c). Multiple transactions of the same type with the same type of split-interest trust may be aggregated on the same line, with the number of each type of trust listed in parentheses. For instance, if the organization received $60,000 from one related charitable remainder trust as payment for investment services and $70,000 from another related charitable remainder trust as payment for investment services during the tax year, it may enter “Charitable remainder trusts (2)” in column (a), transaction type “l” in column (b), and “$130,000” in column (c).

Part VI. Unrelated Organizations Taxable as a Partnership

In this part, provide information on any unrelated organization (an organization that is not a related organization with respect to the filing organization) that meets all of the following conditions.

  1. The unrelated organization is treated as a partnership for federal tax purposes (S corporations are excluded).

  2. The filing organization was a partner or member of the unrelated partnership at any time during the filing organization's tax year.

  3. The filing organization conducted more than 5% of its activities, based on the greater of its total assets at the end of its tax year or its total revenue for its tax year, through the unrelated partnership.

In determining the percentage of the filing organization's activities as measured by its total assets, use the amount reported on Form 990, Part X, line 16, column (B) as the denominator, and the filing organization's ending capital account balance for the partnership tax year ending with or within the filing organization's tax year as the numerator (the amount reported on Schedule K-1 (Form 1065) can be used). In determining the percentage of the filing organization's activities as measured by its total revenue, use the amount reported on Form 990, Part VIII, line 12, as the denominator, and the filing organization's proportionate share of the partnership's gross revenue for the partnership tax year ending with or within the filing organization's tax year as the numerator.

Example.

X, a section 501(c)(3) organization, is a partner of Y, an unrelated partnership, which conducts an activity that constitutes an unrelated trade or business with respect to X. X's distributive share of Y's total income is $60,000 for Y's tax year ending with or within X's tax year. X has an ending capital account balance in Y of $120,000 as reported on Schedule K-1 (Form 1065). X's total revenue and total assets for its tax year are $1,000,000 and $1,200,000, respectively. Because X's total assets exceed X's total revenue for its tax year, X must consider total assets in determining whether X conducted more than 5% of its activities through Y for X's tax year. X conducted 10% of its activities through Y, as measured by X's total assets ($120,000/$1,200,000), and thus must identify Y in Schedule R, Part VI, and provide the required information. If, instead, X's total revenue for its tax year was $1,300,000, then total revenue would be considered rather than total assets; X's activities conducted through Y, as measured by X’s total revenue ($60,000/$1,300,000) would not be greater than 5% of X's total activities, and therefore X would not be required to identify Y in Schedule R, Part VI.

Disregard unrelated partnerships that meet both of the following conditions.

  1. 95% or more of the filing organization's total revenue from the partnership for the partnership's tax year ending with or within the organization's tax year is described in sections 512(b)(1)–(3) and (5), such as interest, dividends, royalties, rents, and capital gains (including unrelated debt-financed income).

  2. The primary purpose of the filing organization's investment in the partnership is the production of income or appreciation of property and not the conduct of a section 501(c)(3) charitable activity such as program-related investing.

Enter the details of each organization on separate lines of Part VI. If there are more organizations to report in Part VI than space available, use as many duplicate copies of Part VI as needed, and number each page.

Some of the information requested in this part is derived from Schedule K-1 (Form 1065) issued to the organization. If the Schedule K-1 is not available, provide a reasonable estimate of the required information.

Column (a). Name, address, and EIN.   Enter the unrelated partnership's full legal name, mailing address, and EIN.

Column (b). Primary activity.   Briefly describe the primary business activity conducted, or product or service provided, by the unrelated partnership.

Column (c). Legal domicile.   List the U.S. state (or U.S. possession) or foreign country in which the unrelated partnership is organized (the state or foreign country whose law governs the unrelated partnership's internal affairs).

Column (d). Predominant income.   Classify the predominant type of income as:
  • Related;

  • Unrelated; or

  • Excluded from tax under sections 512, 513, or 514.

  In other words, enter one of the three types of income listed above that is more prevalent than the others. For classification purposes, use the definitions set forth in the instructions to the Statement of Revenue in Form 990, Part VIII, columns (B), (C), and (D).

Column (e). Section 501(c)(3) partners.   Check “Yes” if all the partners of the unrelated partnership (or members of the LLC) are section 501(c)(3) organizations or governmental units (or wholly-owned subsidiaries of either). Otherwise, check “No.

Column (f). Share of total income.   Enter the dollar amount of the filing organization's distributive share of the related partnership's total income, in accordance with the organization's profits interest as specified by the partnership or LLC agreement, for the related partnership's tax year ending with or within the filing organization's tax year. Use the total amount reported by the related partnership on Schedule K-1 (Form 1065) for the partnership's tax year ending with or within the filing organization's tax year (total of Schedule K-1, Part III, lines 1 through 11 and line 18, tax-exempt income).

Column (g). Share of end-of-year assets.   Enter the dollar amount of the filing organization's distributive share of the unrelated partnership's total assets, in accordance with the filing organization's capital interest as specified by the partnership or LLC agreement, as of the end of the unrelated partnership's tax year ending with or within the filing organization's tax year. Use the ending capital account reported on Schedule K-1 (Form 1065) for the year ending with or within the filing organization's tax year.

Column (h). Disproportionate allocations.   Check “Yes” if the interest of the filing organization as a partner of the partnership (or as a member of the LLC) in any item of income, gain, loss, deduction, or credit, or any right to distributions was disproportionate to the organization's investment in such partnership or LLC at any time during the filing organization's tax year. Otherwise, check “No.

Column (i). Code V—UBI amount in box 20 of Schedule K-1 (Form 1065).   Enter the dollar amount, if any, listed as the Code V amount (unrelated business taxable income) in box 20 of Schedule K-1 (Form 1065) received from the unrelated partnership for the partnership's tax year ending with or within the filing organization's tax year. If no Code V amount is listed in box 20, enter “N/A.

  
If the organization has reason to believe that the stated amount in box 20 is incorrect, it should consult with the partnership. The stated amount in box 20 is not controlling with respect to the organization's unrelated business income tax liability.

Column (j). General or managing partner.   Check “Yes” if the filing organization was at any time during its tax year a general partner of an unrelated limited partnership, or a managing partner or managing member of an unrelated general partnership, LLC, or other entity taxable as a partnership. Otherwise, check “No.

Column (k). Percentage ownership.   Enter the filing organization's percentage interest in the profits or in the capital of the related partnership, whichever is greater.

Part VII. Supplemental Information

Use Part VII if the organization needs space to provide additional information in response to questions in Schedule R (Form 990). In Part VII, identify the specific part and line number that each response supports, in the order in which those parts and lines appear on Schedule R (Form 990). Part VII can be duplicated if more space is needed.


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