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Form 990 Schedule L

Introduction

Schedule L, a crucial component of the Form 990 tax return, serves as a disclosure form for non-profit organizations. It provides detailed information about transactions and arrangements between the organization and certain individuals or entities known as "interested persons."

In this resource guide, we aim to brief on Schedule L, providing valuable insights into its purpose, the entities obligated to file, the filing requirements, and addressing common queries.

Table of Contents

What is Form 990 Schedule L?

Schedule L, Transactions With Interested Persons is a supplementary schedule that accompanies the standard Form 990/Form 990-EZ and is filed annually by tax-exempt and nonprofit organizations.

This schedule aims to enhance transparency and accountability within the non-profit sector by providing detailed information on financial dealings between organizations and their affiliated parties.

Who must file Schedule L?

Non-profit organizations that file Form 990 or Form 990-EZ are generally required to complete Schedule L if they have engaged in any transactions or arrangements with interested persons during the tax year. This includes transactions such as loans, compensation payments, sales or purchases of assets, and leases.

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Schedule L Filing Requirements

All Section 501(c)(3) organizations that file Form 990/990-EZ must complete and attach Schedule L.

Below, we have provided Schedule N filing requirements for each part.

Part I - Excess Benefit Transactions

Part I must be completed by section 501(c)(3), 501(c)(4), and 501(c)(29) organizations only.

If the organization answered “Yes” on Form 990, Part IV, line 25a or 25b, or Form 990-EZ, Part V, line 40b, it must complete Part I of Schedule N.

Provide the details of the person involved in Excess Benefit Transactions

  • Name of disqualified person
  • Relationship between disqualified person and organization
  • Description of transaction

Part II - Loans to and/or From Interested Persons

If the organization answered “Yes” on Form 990-EZ, Part V, line 38a or Form 990, Part IV, line 26; or if the organization reported an amount on Form 990, Part X, line 5, 6, or 22, it must complete Part II of Schedule N.

Provide the details of the Loans to and/or From Interested Persons

  • Name of interested person
  • Relationship with organization
  • Purpose of loan
  • Loan to or from the organization?
  • Original principal amount
  • Balance due

Part III - Grants or Assistance Benefiting Interested Persons

If the organization answered “Yes” on Form 990, Part IV, line 27, it must complete Part III of Schedule N.

Provide the details of the Grants or Assistance Benefiting Interested Persons

  • Name of interested person
  • Relationship between interested person and the organization
  • Amount of assistance
  • Type of assistance
  • Purpose of assistance

Part IV - Business Transactions Involving Interested Persons

If the organization answered “Yes” on Form 990, Part IV, lines 28a, 28b, or 28c, it must complete Part IV of Schedule N.

Provide the details of the Business Transactions Involving Interested Persons

  • Name of interested person
  • Relationship between interested person and the organization
  • Amount of transaction
  • Description of transaction

Part V - Supplemental Information

This Part is used by organizations to explain or provide additional information regarding a transaction. Schedule L Part V can also be duplicated by the organization in need of additional space to report information.

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Here's how your 990 return with Schedule L attachment is transmitted to the IRS - just 3 simple steps!

  1. Provide Organization Details - Choose the tax year for which you want to file a return, and provide your organization's details.
  2. Preview the Return - Complete Schedule L and preview the information provided in the return for accuracy before transmitting.
  3. Transmit to the IRS - Transmit Schedule L along with your 990-EZ return to the IRS and get the acceptance in just a few hours.

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Commonly Asked Questions

Schedule L is used by an organization that files Form 990 or 990-EZ to provide information on certain financial transactions or arrangements between the organization and a disqualified person(s) under section 4958 or other interested persons.
An interested person is an individual or entity that has a close relationship with the non-profit organization, such as officers, directors, major donors, or business entities controlled by such individuals.
A wide range of transactions with interested persons must be disclosed on Schedule L, including loans, compensation payments, sales or purchases of assets, leases, and any other transactions that exceed certain thresholds.