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Form 990 Schedule R

Introduction

Schedule R, "Related Organizations and Unrelated Partnerships," is used by an organization that files Form 990 to provide information about related organizations and certain transactions between the filing organization and its related entities.

If you're a tax-exempt organization looking for comprehensive information on Form 990 Schedule R, you've come to the right place. Let’s learn more about Schedule R and its filing requirements.

Table of Contents

  • What is Schedule R?

What is Schedule R?

Form 990 Schedule R serves as a supplementary document attached to Form 990. It provides the IRS with detailed information on:

  • Related Organizations: This includes tax-exempt organizations with shared governance or control, or entities treated as disregarded entities of the filing organization.
  • Transactions with Related Organizations: It captures details about financial transactions (sales, loans, etc.) between the filing organization and its related organizations.
  • Unrelated Partnerships: For certain partnerships where the organization conducts a significant portion of its activities, Schedule R requires disclosure of the partnership's structure and activities.

Who must file Schedule R?

We have formulated a table that indicates which organizations must complete all or a part of Schedule R and attach Schedule R to Form 990.

Type of filerIf you answer “Yes” to…Then you must complete…
All organizationsForm 990, Part IV, line 33 (regarding disregarded entities)Schedule R, Part I.
All organizationsForm 990, Part IV, line 34 (regarding related organizations)Schedule R, Parts II, III, IV, and V, line 1, as applicable.
All organizationsForm 990, Part IV, line 35b (regarding payments from or transactions with controlled entities)Schedule R, Part V, line 2.
Section 501(c)(3) organizationForm 990, Part IV, line 36 (regarding transfers to exempt noncharitable related organizations)Schedule R, Part V, line 2.
All organizationsForm 990, Part IV, line 37 (regarding the conduct of activity through unrelated partnership)Schedule R, Part VI.

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Schedule K Filing Requirements

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

Part I - Identification of Disregarded Entities.

If the organization answered “Yes” on Form 990, Part IV, line 33, it must complete Part I of Schedule R.

Provide the details of each disregarded entity on separate lines of Part I.

  • Column (a) - Name, address, and EIN (if applicable) of a disregarded entity
    Enter the full legal name and mailing address of the disregarded entity. Also enter the employer identification number (EIN) of the disregarded entity, if it has one.
  • Column (b) - Primary activity
    Briefly describe the primary activity of the disregarded entity.
  • Column (c)- Legal domicile (state or foreign country)
    List the U.S. state (or U.S. territory) or foreign country in which the disregarded entity is organized
  • Column (d) - Total income
    Enter the amount of the filing organization's total revenue reported in Form 990, Part VIII, line 12, column (A), attributable to the disregarded entity.
  • Column (e) - End-of-year assets
    Enter the amount of the organization's total assets reported in Form 990, Part X, line 16, column (B), attributable to the disregarded entity
  • Column (f) - Direct controlling entity
    Enter the name of the entity that directly controls the disregarded entity.

Part II - Identification of Related Tax-Exempt Organizations.

If the organization answered “Yes” on Form 990, Part IV, line 34, because it had one or more related tax-exempt organizations during the tax year, it must complete Part II of Schedule R.

For purposes of Schedule R (Form 990), treat governmental units and instrumentalities and foreign governments as tax-exempt organizations, and provide the details of each related organization on separate lines of Part II.

Part III - Identification of Related Organizations Taxable as a Partnership

If the organization answered “Yes” on Form 990, Part IV, line 34, because it had one or more related organizations treated as a partnership during the tax year, it must complete Part III of Schedule R.

In this part, identify any related organization treated as a partnership for federal tax purposes.

If the partnership is related to the filing organization because of being its parent or brother/sister and the filing organization isn't a partner or member in the partnership, then complete only columns (a), (b), and (c), and enter “N/A” in columns (d), (e), (f), (g), (i), and (k).

Part IV - Identification of Related Organizations Taxable as a Corporation or Trust

If the organization answered “Yes” on Form 990, Part IV, line 34, because it had one or more related organizations treated as a corporation or trust during the tax year, it must complete Part IV of Schedule R.

In this part, identify any related organization treated as a C or S corporation or trust for federal tax purposes (such as a charitable remainder trust), other than a related organization reported as a tax-exempt organization in Part II of Schedule R (Form 990).

If the corporation or trust is related to the filing organization as its parent or as a brother/sister-related organization, and the filing organization doesn't have an ownership interest in the corporation or trust, then complete only columns (a), (b), (c), and (e), and enter “N/A” in columns (d), (f), (g), and (h). Don't report trusts described within section 401(a).

Part V - Transactions With Related Organizations

If the organization answered “Yes” on Form 990, Part IV, lines 34, 35b, or 36, it must complete Part V of Schedule R. This part requires information on Transactions With Related Organizations.

Part VI - Unrelated Organizations Taxable as a Partnership

If the organization answered “Yes” on Form 990, Part IV, line 37, it must complete Part VI of Schedule R.

In this part, provide information on any unrelated organization (an organization that isn't a related organization concerning the filing organization) that meets all of the following conditions.

  1. The unrelated organization is treated as a partnership for federal tax purposes (S corporations are excluded).
  2. The filing organization was a partner or member of the unrelated partnership at any time during the filing organization's tax year.
  3. The filing organization conducted more than 5% of its activities, based on the greater of its total assets at the end of its tax year or its total revenue for its tax year, through the unrelated partnership.

Part VII - Supplemental Information

Use this part if the organization needs space to provide additional information in response to questions in Schedule R (Form 990). In Part VII, identify the specific part and line number that each response supports in the order in which those parts and lines appear on Schedule R (Form 990).

Choose TaxZerone to complete your Schedule R filing

TaxZerone is an IRS-authorized e-file service provider; meaning you get instant updates on your 990 return filing status. We ensure help is available in every step to provide you with a smooth e-filing experience!

Here’s how your Form 990 return with Schedule R attachment is transmitted to the IRS in 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 R and preview the information provided in the return for accuracy before transmitting.
  3. Transmit to the IRS - Transmit Schedule R and your 990 return to the IRS and get the acceptance in just a few hours.

Even if the IRS rejects your 990 information return due to any reason, you can correct and retransmit it with TaxZerone for free!

Ready to attach Schedule R along with your 990 return with TaxZerone?

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Commonly Asked Questions

1. What qualifies as a related organization in Schedule R?

Related organizations include entities that have a close relationship with the filing organization, such as subsidiaries, affiliates, and other entities under common control. This can include organizations with common board members, officers, or key employees.

2. What types of transactions need to be reported on Schedule R?

Schedule R requires reporting on various types of transactions between the filing organization and its related parties, including loans, grants, leases, management fees, and other financial transactions.

Additionally, certain non-financial transactions, such as shared facilities or personnel, may also need to be reported.

3. Are there any exceptions to the reporting requirement for Schedule R?

Certain small organizations may be exempt from filing Schedule R if they meet specific criteria outlined by the IRS. Additionally, certain transactions below a certain threshold amount may be exempt from reporting, but organizations should carefully review IRS guidelines to determine their reporting obligations.