Instructions for IRS Form 990 Schedule R - Related Organization and Unrelated Partnerships 2018

November 13, 2018 "Instructions For Irs Form 990 Schedule R - Related Organization And Unrelated Partnerships" contain the updated filing procedures for the IRS-issued Form 990. Download your copy of the instructions by clicking the link below.

IRS Form 990 is tax form released and collected by the Internal Revenue Service of the United States.

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2018
Department of the Treasury
Internal Revenue Service
Instructions for Schedule R
(Form 990)
Related Organizations and Unrelated Partnerships
Overview
Relationships
Section references are to the Internal Revenue
Code unless otherwise noted.
Part I of Schedule R (Form 990) requires
An organization, including a nonprofit
identifying information on any
organization, a stock corporation, a
Future developments. For the latest
organizations that are treated for federal
partnership or limited liability company
information about developments related to
tax purposes as disregarded entities of
(LLC), a trust, and a governmental unit
Form 990 and its instructions, such as
the filing organization. Part II requires
or other government entity, is a related
legislation enacted after they were
identifying information on related
organization to the filing organization if it
published, go to IRS.gov/Form990.
tax-exempt organizations. Part III requires
stands, at any time during the tax year, in
identifying information on any related
one or more of the following relationships
organizations that are treated for federal
to the filing organization.
General Instructions
tax purposes as partnerships. Part IV
Parent—an organization that controls
Note. Terms in bold are defined in the
requires identifying information on any
(see definitions of control under Definition
Glossary of the Instructions for Form 990,
related organizations that are treated for
of Control) the filing organization.
Return of Organization Exempt From
federal tax purposes as C or S
Subsidiary—an organization controlled
Income Tax.
corporations or trusts. Part V requires
by the filing organization.
information on transactions between the
Brother/Sister—an organization
Purpose of Schedule
organization and related organizations
controlled by the same person or persons
(excluding disregarded entities). Part VI
that control the filing organization.
Schedule R (Form 990) is used by an
requires information on an unrelated
Supporting/Supported—an organization
organization that files Form 990 to provide
organization taxable as a partnership
that is (or claims to be) at any time during
information on related organizations, on
through which the organization conducted
the organization's tax year (i) a
certain transactions with related
more than 5% of its activities (as
supporting organization of the filing
organizations, and on certain unrelated
described in Part VI).
organization within the meaning of section
partnerships through which the
509(a)(3), if the filing organization is a
organization conducts significant
Parts I–VI of Schedule R (Form 990)
supported organization within the
activities.
may be duplicated if additional space is
meaning of section 509(f)(3), or (ii) a
Who Must File
needed to report additional related
supported organization, if the filing
organizations for Parts I–IV, additional
organization is a supporting organization.
The chart below sets forth which
transactions for Part V, or additional
Sponsoring Organization of a VEBA—
organizations must complete all or a part
unrelated organizations for Part VI. Use as
an organization that establishes or
of Schedule R and attach Schedule R to
many duplicate copies as needed, and
maintains a section 501(c)(9) voluntary
Form 990. If an organization isn't required
number each page of each part.
employees' beneficiary association
to file Form 990 but chooses to do so, it
(VEBA) during the tax year. A sponsoring
must file a complete return and provide all
Part VII of Schedule R (Form 990) may
organization of a VEBA also includes an
of the information requested, including the
be used to provide additional information
employee organization, association,
required schedules.
in response to questions in Schedule R.
committee, joint board of trustees, or
other similar group of representatives of
the parties which establish or maintain a
Type of filer
IF you answer “Yes” to . . .
THEN you must complete . . .
VEBA.
Contributing Employer of a VEBA—an
All organizations
Form 990, Part IV, line 33
Schedule R, Part I.
employer that makes a contribution or
(regarding disregarded entities)
contributions to the VEBA during the tax
year.
All organizations
Form 990, Part IV, line 34
Schedule R, Parts II, III, IV, and V,
(regarding related organizations)
line 1, as applicable.
Although a VEBA must report
sponsoring organizations and contributing
All organizations
Form 990, Part IV, line 35b
Schedule R, Part V, line 2.
employers as related organizations,
(regarding payments from or
sponsoring organizations and contributing
transactions with controlled
employers shouldn't report a VEBA as a
entities)
related organization, unless the VEBA is
Section 501(c)(3) organization
Form 990, Part IV, line 36
Schedule R, Part V, line 2.
related to the sponsoring organization or
(regarding transfers to exempt
contributing employer in some other
noncharitable related
capacity listed above.
organizations)
VEBA contributing employers and
All organizations
Form 990, Part IV, line 37
Schedule R, Part VI.
sponsoring organizations. If the filing
(regarding conduct of activity
organization is a section 501(c)(9) VEBA,
through unrelated partnership)
it must list its sponsoring organizations
and contributing employers on Schedule R
Nov 13, 2018
Cat. No. 51519M
2018
Department of the Treasury
Internal Revenue Service
Instructions for Schedule R
(Form 990)
Related Organizations and Unrelated Partnerships
Overview
Relationships
Section references are to the Internal Revenue
Code unless otherwise noted.
Part I of Schedule R (Form 990) requires
An organization, including a nonprofit
identifying information on any
organization, a stock corporation, a
Future developments. For the latest
organizations that are treated for federal
partnership or limited liability company
information about developments related to
tax purposes as disregarded entities of
(LLC), a trust, and a governmental unit
Form 990 and its instructions, such as
the filing organization. Part II requires
or other government entity, is a related
legislation enacted after they were
identifying information on related
organization to the filing organization if it
published, go to IRS.gov/Form990.
tax-exempt organizations. Part III requires
stands, at any time during the tax year, in
identifying information on any related
one or more of the following relationships
organizations that are treated for federal
to the filing organization.
General Instructions
tax purposes as partnerships. Part IV
Parent—an organization that controls
Note. Terms in bold are defined in the
requires identifying information on any
(see definitions of control under Definition
Glossary of the Instructions for Form 990,
related organizations that are treated for
of Control) the filing organization.
Return of Organization Exempt From
federal tax purposes as C or S
Subsidiary—an organization controlled
Income Tax.
corporations or trusts. Part V requires
by the filing organization.
information on transactions between the
Brother/Sister—an organization
Purpose of Schedule
organization and related organizations
controlled by the same person or persons
(excluding disregarded entities). Part VI
that control the filing organization.
Schedule R (Form 990) is used by an
requires information on an unrelated
Supporting/Supported—an organization
organization that files Form 990 to provide
organization taxable as a partnership
that is (or claims to be) at any time during
information on related organizations, on
through which the organization conducted
the organization's tax year (i) a
certain transactions with related
more than 5% of its activities (as
supporting organization of the filing
organizations, and on certain unrelated
described in Part VI).
organization within the meaning of section
partnerships through which the
509(a)(3), if the filing organization is a
organization conducts significant
Parts I–VI of Schedule R (Form 990)
supported organization within the
activities.
may be duplicated if additional space is
meaning of section 509(f)(3), or (ii) a
Who Must File
needed to report additional related
supported organization, if the filing
organizations for Parts I–IV, additional
organization is a supporting organization.
The chart below sets forth which
transactions for Part V, or additional
Sponsoring Organization of a VEBA—
organizations must complete all or a part
unrelated organizations for Part VI. Use as
an organization that establishes or
of Schedule R and attach Schedule R to
many duplicate copies as needed, and
maintains a section 501(c)(9) voluntary
Form 990. If an organization isn't required
number each page of each part.
employees' beneficiary association
to file Form 990 but chooses to do so, it
(VEBA) during the tax year. A sponsoring
must file a complete return and provide all
Part VII of Schedule R (Form 990) may
organization of a VEBA also includes an
of the information requested, including the
be used to provide additional information
employee organization, association,
required schedules.
in response to questions in Schedule R.
committee, joint board of trustees, or
other similar group of representatives of
the parties which establish or maintain a
Type of filer
IF you answer “Yes” to . . .
THEN you must complete . . .
VEBA.
Contributing Employer of a VEBA—an
All organizations
Form 990, Part IV, line 33
Schedule R, Part I.
employer that makes a contribution or
(regarding disregarded entities)
contributions to the VEBA during the tax
year.
All organizations
Form 990, Part IV, line 34
Schedule R, Parts II, III, IV, and V,
(regarding related organizations)
line 1, as applicable.
Although a VEBA must report
sponsoring organizations and contributing
All organizations
Form 990, Part IV, line 35b
Schedule R, Part V, line 2.
employers as related organizations,
(regarding payments from or
sponsoring organizations and contributing
transactions with controlled
employers shouldn't report a VEBA as a
entities)
related organization, unless the VEBA is
Section 501(c)(3) organization
Form 990, Part IV, line 36
Schedule R, Part V, line 2.
related to the sponsoring organization or
(regarding transfers to exempt
contributing employer in some other
noncharitable related
capacity listed above.
organizations)
VEBA contributing employers and
All organizations
Form 990, Part IV, line 37
Schedule R, Part VI.
sponsoring organizations. If the filing
(regarding conduct of activity
organization is a section 501(c)(9) VEBA,
through unrelated partnership)
it must list its sponsoring organizations
and contributing employers on Schedule R
Nov 13, 2018
Cat. No. 51519M
(Form 990). The filing organization must
trustees, directors, officers, employees,
Organizations C and D are controlled by
report all information on its sponsoring
or agents of the parent.
the same persons, and therefore are
organizations in Parts II through IV, as
brother/sister related organizations with
Control of a stock corporation. One
applicable. However, the filing
respect to each other.
or more persons (whether individuals or
organization is only required to list the
Example 2. There are 1,000
organizations) control a stock corporation
name of its contributing employers in Parts
individuals who are members of both
if they own more than 50% of the stock (by
II through IV, and isn't required to report
Organizations E and F. The members
voting power or value) of the corporation.
any additional information in those parts.
elect the board members of both
The filing organization must also report its
Control of a partnership or LLC.
Organizations E and F. Organizations E
related transactions with sponsoring
One or more persons control a partnership
and F are brother/sister related
organizations and contributing employers
if they own more than 50% of the profits
organizations with respect to each other.
in Part V, line 1, and, if applicable, line 2.
interests or capital interests in the
Indirect control. Control can be
partnership (including an LLC treated as a
Disregarded entity exception.
indirect. For example, if the filing
partnership or disregarded entity for
Disregarded entities are treated as
organization controls Entity A, which in
federal tax purposes, regardless of the
related organizations for purposes of
turn controls (under the definition of
designation under state law of the
reporting on Schedule R (Form 990), Part
control in these instructions) Entity B, the
ownership interests as stock, membership
I, but not for purposes of reporting
filing organization will be treated as
interests, or otherwise). A person also
transactions with related organizations in
controlling Entity B. To determine indirect
controls a partnership if the person is a
Part V, or otherwise on Form 990. A
control through constructive ownership of
managing partner or managing member of
disregarded entity of an organization
a corporation, rules under section 318
a partnership or LLC which has three or
related to the filing organization is
apply. Similar principles apply for
fewer managing partners or managing
generally treated as part of the related
purposes of determining constructive
members (regardless of which partner or
organization and not as a separate entity.
ownership of another entity (a partnership
member has the most actual control), or if
See Appendix F in the Instructions for
or trust). If an entity (X) controls an entity
the person is a general partner in a limited
Form 990.
treated as a partnership by being one of
partnership which has three or fewer
three or fewer partners or members, then
Bank trustee exception. If the filing
general partners (regardless of which
an organization that controls X also
organization is a trust that has a bank or
partner has the most actual control). For
controls the partnership.
financial institution trustee that is also the
this purpose, a “managing partner” is a
trustee of another trust, the filing
partner designated as such under the
Example 1. B, an exempt
organization isn't required to report the
partnership agreement, or regularly
organization, wholly owns (by voting
other trust as a brother/sister related
engaged in the management of the
power) C, a taxable corporation. C holds a
organization on the ground of common
partnership.
51% profits interest in D, a partnership.
control by the bank or financial institution
Under the principles of section 318, B is
Control of a trust with beneficial
trustee.
deemed to own 51% of D (100% of C's
interests. One or more persons control a
51% interest in D). Thus, B controls both C
Definition of Control
trust if they own more than 50% of the
and D, which are therefore both related
beneficial interests in the trust. A person’s
organizations with respect to B.
Related organizations. For purposes of
beneficial interest in a trust shall be
Example 2. X, an exempt
determining related organizations:
determined in proportion to that person’s
organization, owns 80% (by value) of Y, a
actuarial interest in the trust as of the end
Control of a nonprofit organization
taxable corporation. Y holds a 60% profits
of the tax year.
(or other organization without owners
interest as a limited partner of Z, a limited
In some situations, a named
or persons having beneficial interests,
partnership. Under the principles of
beneficiary may have no determinable
whether the organization is taxable or
section 318, X is deemed to own 48% of Z
interest in the trust. For instance, if Trust A
tax exempt). One or more persons
(80% of Y's 60% interest in Z). Thus, X
allows the trustee to distribute income and
(whether individuals or organizations)
controls Y. X doesn't control Z through X's
principal in the trustee’s sole discretion for
control a nonprofit organization if they
ownership in Y. Y is a related organization
10 years to the then-living issue of X, with
have the power to remove and replace (or
with respect to X, and (absent other facts)
the remainder (if any) to Charity B, then
to appoint, elect, or approve or veto the
Z isn't.
Charity B has no interest in the trust that
appointment or election of, if such power
can be determined before the 10-year
Example 3. Same facts as in
includes a continuing power to appoint,
period is ended, and therefore doesn't
Example 2, except that Y is also one of
elect, or approve or veto the appointment
control the trust for purposes of Form 990
three general partners of Z. Because Y
or election of, periodically or in the event
and Schedule R.
controls Z through means other than
of vacancies) a majority of the nonprofit
ownership percentage, and X controls Y,
organization's directors or trustees, or a
See Regulations sections 301.7701-2,
in these circumstances, Z is a related
majority of the members who have the
3, and 4 for more information on
organization with respect to X. The other
power to elect a majority of the nonprofit
classification of corporations,
general partners of Z (if organizations)
organization's directors or trustees. Such
partnerships, disregarded entities, and
aren't related organizations with respect to
power can be exercised directly by a
trusts.
X, absent other facts.
(parent) organization through one or more
Examples of control by multiple
of the (parent) organization's officers,
Example 4. Organizations A, B, C,
persons.
directors, trustees, or agents, acting in
and D are nonprofit organizations.
their capacity as officers, directors,
Example 1. Organizations A and B
Organization A appoints the board of
trustees, or agents of the (parent)
each appoint one-third of the board
Organization B, which appoints the board
organization. Also, a (parent) organization
members of Organizations C and D, and
of Organization C. A majority of the board
controls a (subsidiary) nonprofit
aren't otherwise related to Organizations
members of Organization D are also board
organization if a majority of the
C and D. Although neither Organization A
members of Organization A. Under these
subsidiary's directors or trustees are
nor Organization B is a parent of
circumstances, Organizations B and D are
Organization C or Organization D,
directly controlled by Organization A, and
2018 Instructions for Schedule R (Form 990)
-2-
Organization C is indirectly controlled by
In the case of a group return, the central
number (EIN) of the disregarded entity, if
Organization A. Therefore, Organizations
organization must attach a list of the
it has one.
B, C, and D are subsidiaries of
subordinate organizations included in the
A disregarded entity generally
Organization A; Organization C is also a
group return in response to Form 990,
must use the EIN of its sole
TIP
subsidiary of Organization B; and
page 1, Item H(b). The central
member. An exception applies to
Organizations B and C have a brother/
organization must list in Schedule R (Form
employment taxes: for wages paid to
sister relationship with Organization D.
990), Parts II–IV the related organizations
employees of a disregarded entity, the
of each subordinate organization other
Example 5. T, an exempt organization
disregarded entity must file separate
than (1) related organizations that are
described in section 501(c)(3), owns 40%
employment tax returns and use its own
included within the group exemption, or
of the stock of U, a taxable C corporation.
EIN on such returns. See Regulations
(2) related organizations that the central
T and U each own 40% of the stock of V,
sections 301.6109-1(h) and 301.7701-2(c)
organization knows to be included in
another taxable C corporation. Under
(2)(iv).
another group exemption. If an
these facts, T and U aren't related
organization isn't listed because it is
organizations as parent/subsidiary
Column (b). Primary activity. Briefly
known to be included in another group
because T doesn't own more than 50% of
describe the primary activity of the
exemption, the central organization must
U's stock. Under section 318(a)(2)(C),
disregarded entity.
explain in Part VII the relationship between
none of U's holdings are attributed to T by
Column (c). Legal domicile. List the
its own group and members and the
virtue of T's ownership of U stock,
U.S. state (or U.S. possession) or foreign
related organization known to be included
because T owns less than 50% of U stock.
country in which the disregarded entity
in another group exemption (but you
Thus, T and V aren't related organizations
is organized (the state or foreign country
needn't include the names of such related
as parent/subsidiary.
whose law governs the disregarded
organizations).
Example 6. Same facts as in
entity's internal affairs).
An organization that isn't included in a
Example 5, except that U is an S
group exemption isn't required to list in
Column (d). Total income. Enter the
corporation. Under section 318(a)(5)(E), T
Part II a related organization that is
amount of the filing organization's total
constructively owns 16% of V through U
included in a group exemption. Similarly,
revenue reported in Form 990, Part VIII,
(40% of U's 40% ownership of V), giving T
an organization that is included in a group
line 12, column (A), attributable to the
a total ownership interest of 56% in V, and
exemption isn't required to list in Part II a
disregarded entity.
making T and V related organizations as
related organization that is included in
parent/subsidiary.
Column (e). End-of-year assets. Enter
another group exemption. In either case,
the amount of the organization's total
the organization must explain in Part VII
Example 7. Same facts as in
assets reported in Form 990, Part X,
the relationship between it and the related
Example 5, except that T owns 50% of U's
line 16, column (B), attributable to the
organization included in another group
stock. T and U aren't related organizations
disregarded entity.
exemption (but you needn't include the
as parent/subsidiary because T doesn't
names of such related organizations).
own more than 50% of U's stock. Under
Column (f). Direct controlling entity.
section 318(a)(2)(C), U's holdings are
Enter the name of the entity that directly
Even if a related organization isn't required
attributed to T by virtue of T's 50%
controls the disregarded entity. For
to be listed in Part II of Schedule R (Form
ownership of U's stock. Thus, T
instance, if B is a disregarded entity of the
990), however, the organization must
constructively owns 20% of V through U
filing organization, and if C is a
report its transactions with the related
(50% of U's 40% ownership of V), giving T
disregarded entity of B, report B as the
organization in Part V, as required by the
a total ownership interest of 60% in V, and
direct controlling entity of C. If the filing
Part V instructions (for example, checking
making T and V related organizations as
organization directly controls, enter its
“Yes” to Part V, line 1b, if the organization
parent/subsidiary.
name.
made a grant to a related organization
Example 8. F is a 501(c)(3) public
included in a group exemption, and
Part II. Identification of
charity that appoints the governing body of
reporting on Part V, line 2, the
Related Tax-Exempt
G, another 501(c)(3) public charity. G is
organization's receipt of interest or
supported by H, a Type III supporting
Organizations
annuities from a controlled entity
organization within the meaning of section
included in a group exemption), including
For purposes of Schedule R (Form 990),
509(f)(1), but G doesn't control H. G and H
listing the name of the related organization
treat governmental units and
are thus related organizations because of
in Part V, line 2, column (a), for
instrumentalities and foreign
the supporting/supported relationship.
transactions that must be reported in
governments as tax-exempt
Absent other facts, F and H aren't related
line 2.
organizations.
organizations.
Specific Instructions
Group exemption. Central
Enter the details of each related
organizations and subordinate
organization on separate lines of Part II.
organizations of a group exemption
If there are more related organizations to
Part I. Identification of
aren't required to be listed as related
report in Part II than space available, use
Disregarded Entities
organizations in Schedule R (Form 990),
as many duplicate copies of Part II as
Part II. All other related organizations of
needed, and number each page.
Enter the details of each disregarded
the central organization or of a
entity on separate lines of Part I. If there
Column (a). Name, address, and EIN.
subordinate organization are required to
are more disregarded entities to report in
Enter the related organization's full legal
be listed in Schedule R (Form 990). The
Part I than space available, use as many
name, mailing address, and EIN.
following rules apply.
duplicate copies of Part I as needed, and
An organization that is a central or
Column (b). Primary activity. Briefly
number each page.
subordinate organization in a group
describe the primary activity of the related
Column (a). Name, address, and EIN.
exemption (whether filing an individual
organization.
Enter the full legal name and mailing
return or a group return) isn't required to
Column (c). Legal domicile. List the
address of the disregarded entity. Also
list any of the subordinate organizations of
U.S. state (or U.S. possession) or foreign
enter the employer identification
the group in Part II.
2018 Instructions for Schedule R (Form 990)
-3-
country in which the related organization
the Statement of Revenue in Form 990,
Column (g). Section 512(b)(13) con-
is organized. For a corporation, enter the
Part VIII, columns (B), (C), and (D).
trolled entity. Check “Yes” if the related
state of incorporation (or the country of
organization is a controlled entity of the
Column (f). Share of total income.
incorporation for a foreign corporation
filing organization under section
Enter the dollar amount of the filing
formed outside the United States). For a
512(b)(13). If not, check “No.”
organization's distributive share of the
trust or other entity, enter the state whose
related partnership's total income, in
law governs the organization's internal
Part III. Identification of
accordance with the organization's profits
affairs (or the foreign country whose law
Related Organizations
interest as specified by the partnership or
governs for a foreign organization other
LLC agreement, for the related
Taxable as a Partnership
than a corporation).
partnership's tax year ending with or
In this part, identify any related
Column (d). Exempt Code section.
within the filing organization's tax year.
organization treated as a partnership for
Enter the section that describes the
Use the total amount reported by the
federal tax purposes. If the partnership is
related organization (for example, section
related partnership on Schedule K-1
related to the filing organization by reason
501(c)(3) for a public charity, section
(Form 1065) for the partnership's tax year
of being its parent or brother/sister and the
501(c)(6) for a business league, or section
ending with or within the filing
filing organization isn't a partner or
527 for a separate segregated fund). For
organization's tax year (total of
member in the partnership, then complete
purposes of Schedule R, an organization
Schedule K-1, Part III, lines 1 through 11
only columns (a), (b), and (c), and enter
that claims exemption is treated as
and 18, tax-exempt income).
“N/A” in columns (d), (e), (f), (g), (i), and
exempt. Also for purposes of Schedule R,
Column (g). Share of end-of-year as-
(k).
treat as a section 501(c)(3) organization a
sets. Enter the dollar amount of the filing
related foreign organization recognized
Enter the details of each related
organization's distributive share of the
as a charity by the foreign country, or for
organization on separate lines of Part III. If
related partnership's end-of-year total
which the filing organization has made a
there are more related organizations to
assets, in accordance with the
reasonable judgment (or has an opinion of
report in Part III than space available, use
organization's capital interest as specified
U.S. counsel) that the foreign organization
as many duplicate copies of Part III as
by the partnership or LLC agreement, for
is described in section 501(c)(3). The filing
needed, and number each page.
the related partnership's tax year ending
organization isn't required to make or
with or within the filing organization's tax
Some of the information requested in
obtain such a determination for purposes
year. Use Schedule K-1 (Form 1065) for
this part is derived from Schedule K-1
of Schedule R. For governmental units,
the partnership's year ending with or within
(Form 1065), Partner's Share of Income,
instrumentalities, and foreign
the organization's tax year to determine
Deductions, Credits, etc., issued to the
governments that don't have a section
this amount by adding the organization's
organization. If the Schedule K-1 (Form
501(c) determination letter, leave blank.
ending capital account to the
1065) isn't available, provide a reasonable
Column (e). Public charity status. For
organization's share of the partnership's
estimate of the required information.
a related section 501(c)(3) organization,
liabilities at year end reported on the
Column (a). Name, address, and EIN.
report its public charity status, using the
Schedule K-1.
Enter the related partnership's full legal
appropriate line number (line 1 through
Column (h). Disproportionate alloca-
name, mailing address, and EIN.
12d) corresponding to the public charity
tions. Check “Yes” if the interest of the
status checked on Schedule A (Form
Column (b). Primary activity. Briefly
filing organization as a partner of the
990), Public Charity Status and Public
describe the primary business activity
partnership (or as a member of the LLC) in
Support, Part I. If the related organization
conducted, or product or service provided,
any item of income, gain, loss, deduction,
is a private foundation, use the
by the related partnership (for example,
or credit, or any right to distributions was
designation “PF.” If the related
investment in other entities, low-income
disproportionate to the filing organization's
organization is a section 509(a)(3)
housing, etc.).
investment in such partnership or LLC at
supporting organization, also indicate
any time during the filing organization's
Column (c). Legal domicile. List the
its type: I, II, III-FI, or III-O (for Type I, Type
tax year. Otherwise, check “No.”
U.S. state (or U.S. possession) or foreign
II, Type III functionally integrated, or Type
country in which the related partnership is
III other, respectively).
Column (i). Code V—UBI amount in
organized (the state or foreign country
box 20 of Schedule K-1 (Form 1065).
For purposes of Schedule R, treat as a
whose law governs the related
Enter the dollar amount, if any, listed as
public charity a related foreign
partnership's internal affairs).
the Code V amount (unrelated business
organization that hasn't been recognized
taxable income) in box 20 of
as a section 501(c)(3) public charity by the
Column (d). Direct controlling entity.
Schedule K-1 (Form 1065) received from
IRS but for which the filing organization
Enter the name of the entity (if any) that
the related partnership for the
has made a good faith determination,
directly controls the related partnership;
partnership's tax year ending with or
based on an affidavit from the foreign
otherwise enter “N/A.” If the filing
within the filing organization's tax year. If
organization or the opinion of counsel, that
organization directly controls, enter its
no Code V amount is listed in box 20,
the foreign organization is the equivalent
name.
enter “N/A.”
of a public charity. The filing organization
Column (e). Predominant income.
isn't required to make or obtain such a
If the organization has reason to
Classify the predominant type of
determination for purposes of Schedule R;
believe that the stated amount in
partnership income as:
TIP
if it hasn't, leave column (e) blank.
box 20 is incorrect, it should
Related;
consult with the partnership. The stated
Column (f). Direct controlling entity.
Unrelated; or
amount in box 20 isn't controlling with
Enter the name of the entity (if any) that
Excluded from tax under section 512,
respect to the organization's unrelated
directly controls the related organization;
513, or 514.
business income tax liability.
otherwise enter “N/A.” If the filing
In other words, enter which of the three
organization directly controls, enter its
types listed above is more prevalent than
Column (j). General or managing part-
name.
the others.
ner. Check “Yes” if the filing organization
For classification purposes, use the
was at any time during its tax year a
definitions set forth in the instructions to
2018 Instructions for Schedule R (Form 990)
-4-
general partner of a related limited
governs for a foreign organization other
organization's percentage ownership in
partnership, or a managing partner or
than a corporation).
the trust.
managing member of a related general
Column (d). Direct controlling entity.
Column (h). Percentage ownership.
partnership, LLC, or other entity taxable as
Enter the name of the entity (if any) that
For a related organization taxable as a
a partnership. Otherwise, check “No.”
directly controls the related organization;
corporation, enter the filing organization's
Column (k). Percentage ownership.
otherwise enter “N/A.” If the filing
percentage of stock ownership in the
Enter the filing organization's percentage
organization directly controls, enter its
corporation (total combined voting power
interest in the profits or in the capital of the
name.
or total value of all outstanding shares,
related partnership, whichever is greater.
whichever is greater). For a related S
Column (e). Type of entity. Use one of
corporation, use the percentage reported
the following codes to indicate the tax
Part IV. Identification of
on Schedule K-1 (Form 1120S) for the
classification of the related organization: C
year ending with or within the filing
Related Organizations
(corporation or association taxable under
organization's tax year. For a related
Taxable as a Corporation
subchapter C), S (corporation or
organization taxable as a trust, enter the
association taxable under subchapter S),
or Trust
filing organization's percentage of
or T (trust, including a split-interest trust).
beneficial interest. In each case, enter the
In this part, identify any related
Column (f). Share of total income. For
percentage interest as of the end of the
organization treated as a C or S
a related organization that is a C
related organization's tax year ending with
corporation or trust for federal tax
corporation, enter the dollar amount of the
or within the filing organization's tax year.
purposes (such as a charitable remainder
organization's share of the C corporation's
trust), other than a related organization
Column (i). Section 512(b)(13) control-
total income. To calculate this share,
reported as a tax-exempt organization in
led entity. Check “Yes” if the related
multiply the total income of the C
Part II of Schedule R (Form 990). If the
organization is a controlled entity of the
corporation (as reported on its Form 1120,
corporation or trust is related to the filing
filing organization under section
U.S. Corporation Income Tax Return) by
organization as its parent or as a brother/
512(b)(13). If not, check “No.”
the following fraction: the value of the filing
sister organization, and the filing
organization's shares of all classes of
Split-interest trusts. If the related
organization doesn't have an ownership
stock in the C corporation, divided by the
organization is a split-interest trust
interest in the corporation or trust, then
value of all outstanding shares of all
described in section 4947(a)(2), the
complete only columns (a), (b), (c), and
classes of stock in the C corporation. The
organization may enter in column (a) the
(e), and enter “N/A” in columns (d), (f), (g),
total income is for the related
term “Charitable remainder trust,”
and (h). Don't report trusts described
organization's tax year ending with or
“Charitable lead trust,” or “Pooled income
within section 401(a).
within the filing organization's tax year.
fund,” as appropriate, instead of the trust's
name, EIN, or address. If the organization
Some of the information requested in
For a related organization that is an S
was related to more than one of a certain
corporation, enter the filing organization's
this part is derived from Schedule K-1
type of related split-interest trust during
allocable share of the S corporation's total
(Form 1041), Beneficiary's Share of
the tax year, it should enter the number of
income. Use the amount on Schedule K-1
Income, Deductions, Credits, etc., or
that type of trust in parentheses after the
Schedule K-1 (Form 1120S),
(Form 1120S) for the S corporation's tax
name. For instance, if the organization
Shareholder's Share of Income,
year ending with or within the filing
had two related charitable remainder
organization's tax year (Part III, lines 1
Deductions, Credits, etc., issued to the
trusts and three related charitable lead
through 10 of Schedule K-1 (Form
organization. If the Schedule K-1 isn't
trusts, it should enter “Charitable
1120S)).
available, provide a reasonable estimate
remainder trusts (2)” on one line of column
of the required information.
For a related organization that is a
(a) and “Charitable lead trusts (3)” on
trust, enter the total income and gains
another line in column (a). The
Enter the details of each related
reported on Part III, lines 1 through 8, of
organization may leave columns (e), (f),
organization on separate lines of Part IV. If
Schedule K-1 (Form 1041) issued to the
(g), and (h) blank for these lines. Use Part
there are more related organizations to
filing organization for the trust's tax year
VII if the organization needs space to
report in Part IV than space available, use
ending with or within the filing
provide additional information for columns
as many duplicate copies of Part IV as
organization's tax year.
(b), (c), (d), or (i).
needed, and number each page.
A section 501(c)(3) organization
Column (a). Name, address, and EIN.
Part V. Transactions With
that is an S corporation
TIP
Enter the related organization's full legal
shareholder must treat all
Related Organizations
name, mailing address, and EIN.
allocations of income from the S
corporation as unrelated business
Line 1. Check “Yes” in the appropriate
Column (b). Primary activity. Briefly
income, including gain on the disposition
boxes of line 1 if the filing organization
describe the primary business activity
of stock.
conducted, or product or service provided,
engaged in any of the transactions listed
by the related organization (for example,
in Part V with any related organizations
Column (g). Share of end-of-year as-
holding company, management
(other than disregarded entities listed in
sets. Enter the dollar amount of the filing
Part I). A single transaction may be
company).
organization's allocable share of the
described by and reported in more than
Column (c). Legal domicile. List the
related organization's total assets as of
one line. A “transfer,” for purposes of Part
U.S. state (or U.S. possession) or foreign
the end of the related organization's tax
V, lines 1r and 1s, includes any
country in which the related organization
year ending with or within the filing
conveyance of funds or property not
is organized. For a corporation, enter the
organization's tax year. For related C and
described in lines 1a through 1q, whether
state of incorporation (or the country of
S corporations, this amount is determined
or not for consideration, such as a merger
incorporation for a foreign corporation
by multiplying the corporation's
with a related organization.
formed outside the United States). For a
end-of-year total assets by the fraction
Line 2. The filing organization must report
trust or other entity, enter the state whose
described in column (f). For related trusts,
law governs the organization's internal
on this line any of the following
this amount corresponds to the filing
affairs (or the foreign country whose law
transactions that it engaged in with a
2018 Instructions for Schedule R (Form 990)
-5-

Download Instructions for IRS Form 990 Schedule R - Related Organization and Unrelated Partnerships 2018

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