Mastering Form 990 Schedule D: Supplemental Financial Statements

About Form 990 Schedule D

One of the more complex Schedules on Form 990 Exempt Organization Tax Return is Schedule D, Supplemental Financial Statements. This Schedule is required for exempt organizations that hold donor advised funds, conservation easements, certain art and museum collections, escrow or custodial accounts or arrangements, or endowment funds. Schedule D also mandates reporting of PPE, investment securities, and “other” assets and liabilities.

Schedule D plays a critical role in identifying assets that could produce UBTI requiring payment of income tax (UBIT) and separate reporting. Tax advisers to exempt organizations need to have a thorough grasp of the interplay between assets reported on Schedule D and whether these assets will generate UBTI.

Schedule D also requires exempt organizations to complete a number of reconciliations, including reporting investment expenses, valuing in-kind donated services, and tying revenue and expenses from its audited financial statements to the Form 990. Further complicating matters is that the IRS instructions do not always provide clear guidance on how to report certain items. The combination of a lack of guidance and the complexity of the reporting requirements present a particular challenge to nonprofit advisers in reporting.

Listen as our experienced panel provides detailed guidance on completing Form 990 Schedule D, with concrete examples of completed forms and schedules.

1. Identifying assets to be reported
2. Investment fund information
3. Tying asset disclosures to UBTI reporting
4. Endowment funds
5. Donor advised funds
6. Tying to audited financial statements (Parts XI and XII)

Additionally, we will discuss these and other important topics:

• How to distinguish which funds qualify as donor advised funds
• Identifying “other” assets that would require reporting on Schedule D
• Referencing Part XIII to provide additional explanations or descriptions of Schedule D disclosures
• Reconciliation of revenue and expenses from Form 990 to audited financial statements (Parts XI and XII)

Learning Objectives

After completing this course, you will be able to:

• Recognize which funds, assets and liabilities require separate reporting on Schedule D
• Discern the connection between Schedule D assets and UBTI
• Identify the reconciliation requirements between audited financial statement revenue and expense amounts and Form 990 Schedule D reporting
• Indicate the proper reporting of investment expenses, such as custodial fees or account management fees, for an exempt org on Schedule D

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ non-profit business or public firm experience at mid-level within the organization, preparing financial statements and/or complex tax forms and schedules, supervising other preparers/accountants. Specific knowledge and understanding of tax-exempt entity income rules; familiarity with nonprofit reportable transaction rules and unrelated business taxable income rules.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).