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Form 990

Reviewing Information Specific to Form 990-PF

Organizations classified as private foundations file Form 990-PF regardless of whether there was taxable income or activity during the year. Form 990-PF is used to report the financial and charitable activities of the foundation, calculate whether specific taxes, such as the tax on investment income, is owed to the IRS, and list the names of trustees and officers as well as grant recipients. The information on Form 990-PF is used by the IRS to determine whether the foundation is in compliance with the sanctions and limitations applicable to private foundations. In addition to Form 990-PF, a foundation may be required to file:
  • Form 990-T to report unrelated trade or business income. See Reviewing Information Specific to Form 990-T for details.
  • Form 4720 if liability for any other excise tax exists.
In the account binder, the Form 990-PF page is accessible from the
Tax Review-990
 main topic when the
990 PF
 check box is selected on the Account Information page. Selecting the
Tax Review-990
 main topic selects the
Form 990-PF
 subtopic and displays the Form 990-PF page. On the Form 990-PF page, the collapsible sections are closed so you can find and access (rather than scroll to) the information you want to review. Selecting a section heading opens the section and displays its details.
The following graphic shows that the
Form 990-PF
 subtopic is selected and that the collapsible sections on the Form 990-PF page are closed:
In addition to the
Form 990-PF
 subtopic, the
Tax Review-990
 main topic includes separate subtopics for:
  • Form 990-T (if the
    990 T
     check box is selected on the Account Information page).
  • Schedule B.
  • A general explanation attachment, which is used for e-filing purposes only.
  • Income items, such as capital gains/losses and ordinary gains/losses.
  • Rent and royalty assets.
  • Partnership or S corporation K-1 input (which is entered or updated like 1041 Schedule K-1 input).
  • Depreciation.
  • Form 4797 (for sales of business properties).
  • Form 4720 (for excise tax liability).
  • Estimated Tax Paid and Tax Withheld page (for reviewing and overriding the actual estimated tax paid and tax withheld data for an account).
  • Estimate Options and Application of Overpayment page (used for accounts where vouchers are generated with the tax return, and for applying or refunding the overpayment of taxes). Most of the options under the
    Estimate Compute Options
     collapsible section are the same as the PAN or SuperBank level Estimate and Underpayment options. Changes made to the options under this collapsible section override the Estimate and Underpayment options for the account.
  • Underpayment Penalty page (for accounts where Form 2220 is computed and printed).
  • Tax return footnotes (which are entered and updated like tax return footnotes for 1041 returns).
  • Tax return extensions (for entering or overriding information for Form 8868).
Generally, the collapsible sections on the Form 990-PF page are arranged like the Parts of Form 990-PF. However, there are some collapsible sections that include more than one Part, and some Parts that are included in multiple collapsible sections. For example:
  • The 990-PF page does not include a collapsible section for Part IV of Form 990-PF. Rather, the capital gain net income reported in Part IV of Form 990-PF is computed based on the detail included in the capital gain/loss subtopics of the
    Tax Review-990
     main topic.
  • The
    Part VII-Compensation Information (Officers, Directors, Trustees, Foundation Managers and Key Employees
    ,
    Part VII-Compensation Information (Highest Paid Employees)
     and
    Part VII-Compensation Information (Highest Paid Contractors)
     collapsible sections correspond to the compensation and benefit information reported in Part VII of Form 990-PF.
  • The
    Part IX, X, XI, XII, XIII Distribution Information
     collapsible section includes the distribution requirements for private foundations, the related excise tax for failure to make required distributions, and the tests to satisfy to qualify as a private operating foundation.
note
Much of the information on the Form 990-PF page rolls from one year to the next. This means that, for example, you will answer the questions regarding the foundation's activities or whether liability exists for an excise tax or the unrelated business income tax the first year you use ONESOURCE Trust Tax to process the account. Each subsequent year, you will review then update only those questions that require updating.

Reviewing General Information

The
General Information
 collapsible section on the Form 990-PF page allows you to review, enter and update the following information:
  • The type of organization (item H in the heading section), including identifying whether the foundation is a private operating foundation under I.R.C. Section 4942(j)(3) or an elder care facility under I.R.C. Section 4942(j)(5).
  • Whether the organization is a foreign organization (item D in the heading section).
  • The FMV of all assets at year end (item I in the heading section).
  • For foundations that qualify as an exempt operating foundation, the date of the IRS ruling or determination letter (line 1a in Part VI).
  • The method of accounting (item J in the heading section).
  • Whether the private foundation status was terminated (item E in the heading section) and whether the foundation is in a 60-month termination (item F in the heading section).
  • The organization's phone number (item B in the heading section), website address (line 13 in Part VI-A) and email address (line 2a in Part XV).
  • Whether the organization is required to attach Schedule B (line 2 in Part I).
  • Whether the exemption application is pending (item C in the heading section).
  • Whether there was an address change, name change or this is the initial return of a former public charity (item G in the heading section). If applicable, you can also select the reason the trust converted from filing Form 990 to Form 990-PF.
  • The procedure (Not Applicable, Revenue Procedure 85-58, or Form 1128) by which the organization obtained IRS approval for a change in its accounting period.
  • The books and records information (line 14, Part VII-A).

Reviewing Revenue and Expenses

Part I of Form 990-PF is used to report the following revenue and expense items for a private foundation:
  • Contributions, gifts, grants and other similar amounts received.
  • Gross income, including tax-exempt income.
  • Expenses attributable to gross income.
  • Disbursements for charitable purposes.
The revenue and expense amounts reported in Part I are also carried to other parts of Form990-PF. On the Form 990-PF page, the
Part I Revenue & Expenses
 collapsible section separates revenue and expense items into the
Revenue
 and
Expenses
 grids. In both grids, you can review and override the total taxable amount for the fields that have a white background. The fields that have a gray background cannot be overridden.
The
Amount per books
 column corresponds to column (a) in Part I. Unless overridden, the amounts in this column are the total taxable amounts for the transactions that were mapped as revenue, expense and income producing activities. The
Computation of Net Investment Income
 and
Computation of Adjusted Net Income
 columns correspond to columns (b) and (c), respectively. The amounts in these columns are computed by ONESOURCE Trust Tax based generally on the
Amount per books/column (a)
 amounts.
note
If you do not want to include gross rents in computation of adjusted net income, select the
Suppress print of gross rents on Form-PF, Part 1, line 5a, column c
 check box, which is located above the
Revenue
 grid.
The
Revenue
 grid displays lines 6a and 6b different from Form 990-PF. In the
Revenue
 grid, the line 6a net gain or loss is in the
Amount per books
 column for the
Net gain (loss) from sale of assets (Override)
 row. The line 6b gross sales price is in the
Gross Sales price for all assets
 column.
In the
Expenses
 grid, the
Disbursements for Charitable Purposes
 column includes amounts classified as qualified charitable disbursements. Since these disbursements are determined solely on the cash method of accounting, the amount in this column may not match the charitable expenditures reported in the
Amount per books
 column.
Both the
Revenue
 and
Expenses
 grids may include a link in the
Detail
 column for a revenue or expense item. Seelcting the link allows you to review, enter, update or override the item's details. Capital gains and losses, ordinary gains and losses and income from rent and royalty assets are included on separate pages, which can be accessed by selecting the appropriate subtopic from the topic list panel.
note
If you need to indicate that the foundation is not required to attach Schedule B, select the
Organization is not required to attach Sch. B
 check box, which is under the
General Information
 collapsible section.

Reviewing the Balance Sheet

The balance sheet items listed in Part II of Form 990-PF are included under the
Part II Balance Sheet
 collapsible section on the Form 990-PF page. The first year you use ONESOURCE Trust Tax to process the Form 990-PF return for the account, you must enter the beginning book and ending book values. Each year thereafter, the ending book values from the prior year are used as the beginning book values for the subsequent tax year.
Some of the balance sheet items require detail, which may be reported alongside the description for the line item and/or as a supplementary statement to Form 990-PF. On the Form 990-PF page, you can access the detail by selecting the
Detail
 link in the
Transaction
 column.
note
Some states (but not the IRS) require FASB ASC 958 (formerly SFAS 117) reporting. If the private foundation complies with FASB ASC 958, select
Yes
 from the
Does the organization follow SFAS117_9?
 drop-down list. Review and, if necessary, override the beginning book and ending book values for the
Unrestricted funds
,
Temporarily restricted funds
 and
Permanently restricted funds
 rows in the FUND BALANCE OR NET WORTH section of the balance sheet grid. If the private foundation does not comply with FASB ASC 958, select
No
,
Leave Blank
 or
N/A
 from the
Does the organization follow SFAS117_9?
 drop-down list. In the FUND BALANCE OR NET WORTH section of the balance sheet grid, be sure to use the fields other than those listed above to review and override the beginning book and ending book values.

Reviewing Changes in Net Assets or Fund Balances

Part III of Form 990-PF is used to reconcile a foundation's beginning of year balance to the end of year balance. On the Form 990-PF page, the
Part III Changes to Fund Balances
 collapsible section allows you to review, enter or update increases or decreases in net assets or fund balances, or enter an override for the total amount of changes in net assets or fund balances.
Use the grid to review, enter or update increases or decreases in net assets or fund balances. To report an increase on line 3, enter the amount as a positive number. To report a decrease on line 5, enter the amount as a negative number.
Use the
Other changes in fund balances or net worth (Override amounts entered below)
 field to enter an override for the total amount of changes in net assets or fund balances.

Reviewing the Tax on Investment Income

Most private foundations and organizations treated as private foundations are subject to an annual excise tax of 2% on their net investment income. This can be reduced to 1% if the foundation's qualified distributions meet the requirements under I.R.C. Section 4940(e). On Form 990-PF, Part V determines whether the foundation qualifies for the 1% tax rate on net investment income.
On the Form 990-PF page, use the
Part V Tax on Investment Income
 collapsible section to review, enter, update and/or override data that is used to calculate the excise tax and to determine whether the 1% reduced tax rate on net investment income applies.
note
  • Foundations and organizations treated as private foundations are required to make estimated tax payments when the excise tax is greater than $500 for the year. See Preparing Estimates and Remitting Estimated Tax Payments for details on preparing and filing Form 990-W.
  • If the foundation qualifies as an exempt operating foundation, enter the date of the IRS ruling or determination letter in the
    Date of current determination letter for operating foundations
     field under the
    General Information
     collapsible section on the Form 990-PF page.
  • For an account that requires dual return processing, any tax liability calculated on the 1041 return is automatically carried to the
    Tax under Subtitle A
     field if the 1041 return was processed first. An amount manually entered in the
    Tax under Subtitle A
     field is considered an override to the calculated amount.

Reviewing Statements Regarding Activities

Parts VI-A and VI-B of Form 990-PF ask several questions that should be answered rather than leaving blank. Answers to these questions help the IRS verify that the foundation continues to qualify as a private foundation, or are used to determine whether liability exists for an excise tax or the unrelated business income tax. On the Form 990-PF page, each question in Parts VI-A and VI-B is included under the
Part VI A&B Statements Regarding Activities
 collapsible section. Questions displaying
Required
 as the answer indicate that you must change the answer to
Yes
 or
No
. Some questions have an associated field or grid, which you can use to provide details when you answer
Yes
. See Summary of the Questions in Parts VI-A and VI-B for a summary of each question.
note
If you want, you can use the
Form 990PF with Part VI Questions
 base register to review and/or answer most of the questions in Parts VI-A and VI-B. The benefit to using the register is that a global change can be made to answer or update the questions included in the register.
Summary of the Questions in Parts VI-A and VI-B
The following table summarizes the questions in Parts VI-A and VI-B of Form 990-PF:
Form 990-PF
Line Number(s)
General Subject of the Question
Part VI-A
1a-1e
Influencing legislation, political expenditures and Form 1120-POL
Part VI-A
2
Activities not previously reported to the IRS
Part VI-A
3
Significant changes to organizing or governing documents
Part VI-A
4
Unrelated business income
note
Form 990-T is required if the foundation has $1,000 or more of gross unrelated business income. Use the Form 990-T page to review, enter or update information specific to Form 990-T. See Reviewing Information Specific to Form 990-T for details.
Part VI-A
5
Liquidation, termination, dissolution or substantial contraction
Part VI-A
6
Section 508(e) requirements
Part VI-A
7
$5,000 or more in assets at any time during the year
Part VI-A
8a-8b
State reporting
Part VI-A
9
Private operating foundation status
Part VI-A
10
Substantial contributors
Part VI-A
11
Controlled entities
Part VI-A
12
Donor advised funds
Part VI-A
13
Public inspection requirements
Part VI-A
14
Books and records
note
The books and records information is under the
General Information
 collapsible section on the Form 990-PF page.
Part VI-A
15
Section 4947(a)(1) nonexempt charitable trust filing Form 990-PF rather than Form 1041
Part VI-A
16
Foreign financial accounts
Part VI-B
1a-1c
Self-dealing transactions
Part VI-B
2a-2c
Failure to distribute income
Part VI-B
3a-3b
Excess business holdings
Part VI-B
4a-4b
Jeopardy investments
Part VI-B
5a-5c
Taxable expenditures and expenditure responsibility
Part VI-B
6a-6b
Personal benefit contracts
Part VI-B
7a-7b
Prohibited tax shelter transactions

Reviewing Compensation Information

Part VII of Form 990-PF is used to report the compensation-related information for officers, directors, trustees and foundation managers; the five highest paid employees earning at least $50,000; and, the five highest paid independent contractors providing professional services exceeding $50,000. On the Form 990-PF page, the collapsible sections include:
  • Part VII-Compensation Information (Officers, Directors, Trustees, Foundation Managers and Key Employees)
    -Corresponds to the first table in Part VII. Use the grid to review, enter or update compensation-related information for officers, directors, trustees and foundation managers. Beginning with tax year 2022, entries in the
    Business Name
     field roll to subsequent tax years.
  • Part VII-Compensation Information (Highest Paid Employees)
    -Corresponds to the second table in Part VII. Use the grid to review, enter or update compensation-related information for the five highest paid employees.
  • Part VII-Compensation Information (Highest Paid Contractors)
    -Corresponds to the third table in Part VII. Use the grid to review, enter or update compensation-related information for the five highest paid independent contractors. Beginning with tax year 2022, entries in the
    Business Name
     field roll to subsequent tax years.

Reviewing Direct Charitable Activity Information

Part VIII-A of Form 990-PF is used to describe the four largest programs that comprise the direct active conduct of the foundation's charitable activities. On the Form 990-PF page, the grid under the
Part VIII Direct Charitable Activities
 collapsible section is used to review, enter or update the description of and expenses associated with each direct charitable activity.
note
In the grid, you can use the
Direct Charitable Activities, Cont.
 and
Cont.
 fields to enter the description for an activity. A maximum of 70 characters can be entered in each field. In the following graphic, notice that the description is in only the
Direct Charitable Activities
 and the first
Cont.
 field:

Reviewing Program-Related Investment Information

Part VIII-B of Form 990-PF is used to describe the foundation's program-related investments. On the Form 990-PF page, the grid under the
Part VIII Program Related Investments
 collapsible section is used to review, enter or update the description and amount of each investment.
note
In the grid, you can use the
Description of Program Related Investments
,
Cont.
 and
Cont.
 fields to enter the description for a program-related investment. A maximum of 70 characters can be entered in each field. In the following graphic, notice that the description spans the three fields:

Reviewing Income Distributions

Although the rules differ, both private nonoperating foundations and private operating foundations are subject to income distribution requirements. Failure to make the required distributions subjects a private nonoperating foundation to an excise tax for failure to distribute income. The excise tax does not apply to private operating foundations.
On the Form 990-PF page, the
Part IX, X, XI, XI, XIII Distribution Information
 collapsible section includes links for accessing the income distribution information for nonoperating private foundations and private operating foundations. The links include:
  • Minimum Investment Return
    -Corresponds to Part IX. Selecting the link allows you to review and override or update amounts used in calculating the foundation's minimum investment return (MIR). If applicable, you can enter explanations or select the
    More Details
     link to review, enter and update details. If a foundation's tax year is less than 12 months, select the
    Tax Period is less than 12 months and minimum investment return should be calculated using a prorated percentage
     check box to use a prorated percentage to calculate the foundation's MIR.
  • Distributable Amount
    -Corresponds to Part X. Selecting the link allows you to review and enter or update amounts used in calculating the foundation's distributable amount. The amount from transactions posted to tax code 600 are included in the
    Recoveries of amounts treated as qualifying distributions
     field, and are reported on line 4 in Part X. If the amount is overridden, it will show with a yellow background after the override is saved.
  • Qualifying Distributions
    -Corresponds to Part XI. Selecting the link allows you to review and override or update amounts used in calculating the foundation's total qualifying distributions. If applicable, you can enter an explanation or select the
    More Details
     link to review, enter and update details.
  • Undistributed Income
    -Corresponds to Part XI. Selecting the link allows you to review and override or update amounts used in calculating the foundation's undistributed income. If applicable, you can enter an explanation or answer questions by selecting
    Yes
     or
    No
    . Questions displaying
    Required
     as the answer indicate that you must change the answer to
    Yes
     or
    No
    .
  • Private Operating Foundations
    -Corresponds to Part XIII. Selecting the link allows you to review and override or update amounts used to determine whether the foundation will maintain its status as private operating foundation.

Reviewing Supplementary Information

Private foundations with at least $5,000 or more in assets at any time during the year must provide supplementary information in Part XIV of Form 990-PF. On the Form 990-PF page, the
Part XIV-Supplementary Information
 collapsible section allows you to review, enter or update information about:
  • Submitting applications to the foundation.
  • Foundation managers that have become substantial contributors.
  • Grants, allocations and contributions approved for future payment.
note
Grants, allocations and contributions paid during the current year are included under the
Grants, Allocations, and Contributions
 collapsible section on the Recipient Detail page. See Reviewing Recipients for details.

Reviewing Income Producing Activities and Accomplishments of Exempt Purposes

Part XV-A of Form 990-PF focuses on whether any revenue sources are unrelated business income, and Part XV-B is used to describe revenue that qualifies as exempt-function income or that is excluded but does not qualify for an exclusion from unrelated business income. On the Form 990-PF page, the
Part XV Analysis of Income Producing Activities and Relationship of Activities to the Accomplishment of Exempt Purposes
 collapsible section allows you to review and override the following:
  • Revenue identified as unrelated business income-This type of revenue is reported in columns (a) and (b) in Part XV-A. On the Form 990-PF page, use the
    Code
     and
    Amount
     fields under the
    Unrelated Business Income
     heading to review and override the business code and the associated amount.
  • Revenue that qualifies for a statutory exclusion from unrelated business income-This type of revenue is reported in columns (c) and (d) in Part XV-A. On the Form 990-PF page, use the
    Code
     and
    Amount
     fields under the
    Excluded By Section 512, 513, 514
     heading to review and override the exclusion code and associated amount.
  • Revenue that qualifies as exempt-function income or that is excluded but does not qualify for an exclusion from unrelated business income-The amount from this type of revenue is reported in column (e) in Part XV-A and the associated description is reported in Part XV-B. On the Form 990-PF page, use the amount field under the
    Related or Exempt Function Inc.
     column to review and override the amount, and use the
    Relationship
     column to enter a description.
note
For some revenue items, you can select the
Detail
 or
Override
 link in the
Detail
 column to access details or enter overrides.

Reviewing Activities with Noncharitable Exempt Organizations

Part XVI of Form 990-PF is used to report specific transactions and relationships with noncharitable exempt organizations. On the Form 990-PF page, the
Part XVI Information Regarding Transfers to and Transactions and Relationships With Noncharitable Exempt Organizations
 collapsible section includes the lines 1a, 1b, 1c and 2a questions. Selecting
Yes
 as the answer to a question displays an associated grid to use for entering the details.
note
To re-display an associated grid for a question that was answered
Yes
, select anywhere in the drop-down list.

This article applies to:

  • PRODUCT: ONESOURCE Trust Tax
  • Return type: 990 Exempt Organization