Mastering Form 990 Schedule R: Reporting Transactions With Related Organizations and Unrelated Partnerships

One of the more complicated Schedules on Form 990 Exempt Organization Tax Return is Schedule R, Related Organizations and Unrelated Partnerships. The AICPA in its most recent comments noted that the instructions to Part III of the Schedule in particular do not provide clear guidance on how to report indirect partnership interests. The combination of a lack of guidance and the complexity of the reporting requirements present a particular challenge to nonprofit advisers in reporting related organizational transactions.

An essential first step in completing the Form 990 is understanding the standards for relatedness under Form 990 and then determine whether the filing organization is obligated to include any information regarding a related or other organization on Form 990.

When an organization begins preparing its Form 990, the tax professional must recognize external entities in which the exempt organization maintains an interest. The professional must then determine whether the entities are related, and if so, whether the relationship must be reported on Form 990. The adviser also must be able to determine whether the relationship rises to the level of a reportable joint venture.

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

1. Reporting related entities on Form 990 Part IV
2. Standards for relatedness
3. Related nonprofit/exempt organizations reporting
4. Related for-profit/taxable organizations reporting

The panel will discuss these and other important aspects to completing Schedule R:

• How to determine the standards for relatedness
• Identifying information that must be reported on Schedule R
• How to complete Part III and understand the unrelated partnership standards
• Reporting relationships with other exempt organizations
• Reporting relationships and transactions with taxable partnerships

Learning Objectives

Upon completing this course, you will be able to:

• Determine relatedness to filing exempt organization of an external nonprofit organization or taxable entity
• Identify information that must be reported after a determination that two or more organizations are related
• Discern what constitutes a “direct controlling entity”
• Recognize when board member overlap does—and does not—constitute common control

• 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 Form 990 and tax-exempt entity related organization rules; familiarity with the concept of "relatedness" in the context of tax-exempt entity tax reporting.

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IRS Approved Provider

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