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
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.
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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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 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.
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.
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
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
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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