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 and thus satisfies the reporting threshold?
Yes, revenues and expenses from or attributable to foreign investments must be taken into account in answering Form 990, Part IV, line 14b. 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 reporting of activities conducted indirectly through joint ventures.
For example, an organization with an interest in a foreign partnership must 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 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.