General Instructions


Terms in bold are defined in the Glossary of the Instructions for Form 990, Return of Organization Exempt From Income Tax.

Purpose of Schedule

Schedule K (Form 990) is used by an organization that files Form 990 to provide certain information on their outstanding liabilities associated with tax-exempt bond issues. Usually, a bond issue associated with an organization will be issued as qualified 501(c)(3) bonds, but all types of tax-exempt bond issues benefiting the organization are to be reported. A qualified 501(c)(3) bond issue consists of bonds the proceeds of which are used by a section 501(c)(3) organization to further its charitable purpose. Requirements generally applicable to qualified 501(c)(3) bonds under section 145 include the following:

  • All property financed by the bond issue is to be owned by a section 501(c)(3) organization or a state or local governmental unit; and

  • At least 95% of the net proceeds of the bond issue are used by either a state or local governmental unit or a section 501(c)(3) organization in activities which do not constitute unrelated trades or businesses (determined by applying section 513).

If the organization has one or more related organizations (for example, parent and subsidiary relationship), it must complete Schedule K (Form 990) consistent with the filing(s) of its related organization(s). The same liability should not be reported by more than one of the related organizations. For example, if a parent organization issues a tax-exempt bond and loans or allocates that issue to a subsidiary organization, only one organization (either the parent or subsidiary) should report the liability on Form 990 and the Schedule K. Similarly, if a parent organization loans or allocates the proceeds of a tax-exempt bond issue to a group of subsidiary organizations, only one level (either the parent or the group of subsidiaries) should report the liability on Form 990 and the Schedule K. For this purpose, if the subsidiary organizations report the liability, each subsidiary should only report the amount it is loaned or allocated.

If the organization's bond liability relates to a pooled financing issue, the organization should report with respect to the amount of the issue that the organization is loaned or allocated.

Use Part VI to provide additional information or comments relating to the information provided on this schedule. For example, use Part VI to provide additional information or comments about the reporting of liabilities by related organizations. In addition, an organization can use Part VI to describe certain assumptions which are used to complete Schedule K (Form 990) when the information provided is not fully supported by existing records.

Who Must File

An organization that answered “Yes” on Form 990, Part IV, Checklist of Required Schedules, question 24a, must complete and attach Schedule K to Form 990. This means the organization reported an outstanding tax-exempt bond issue that:

  • Had an outstanding principal amount in excess of $100,000 as of the last day of the tax year, and

  • Was issued after December 31, 2002.

Up to four separate outstanding tax-exempt liabilities can be reported on each Schedule K (Form 990). The schedule can be duplicated, if needed to report more than four tax-exempt liabilities. If the 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.

Period Covered

The organization can complete this schedule for any tax-exempt liability using the same period as the Form 990 with which it is filed. Alternatively, the organization can use any other 12-month period or periods selected by the organization and which, used consistently for a tax-exempt liability for purposes of this schedule and computations, is in accordance with the requirements under sections 141 through 150. Under this alternative, the organization can use different 12-month periods for each tax-exempt liability reported. The alternative period(s) must be specifically described in Part VI.

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