Navigating the Final Sections of IRS Form 990-PF: Parts 13, 14, 15, 16
Congrats, you’ve made it to the home stretch! Today we are going to power through the final Parts of the 990-PF Form and talk about Parts 13-16
Not quite there yet? No worries, get caught up with this blog about Parts I-IV, this blog on parts V-VIII, and this blog on Parts IX-XII!
Part XIII – Private Operating Foundations
Part XIII is only required if the organization is a private operating foundation. If the organization is a non-operating private foundation, this section is not required.
For a private operating foundation, you will indicate on line 1, the date that the status was received, and you will indicate if the organization is a private operating foundation described in section 4942(j)(3) or 4942(j)(5). This information can be confirmed in your determination letter.
Line 2 is where you will be able to report the adjusted net income from Part I or the minimum investment return from Part IX for the current and three prior years, you will report the Qualifying distributions from Part XI, line 4, amounts included in line 2c not used directly for active conduct of exempt activities, and qualifying distributions made directly for active conduct of exempt activities.
Most of this information is an auto calculation or a value that is pulled from other areas of the return. On line 3, you will determine whether you qualify for the assets test, the endowment alternative test, or the support alternative test and complete the sections accordingly.
Part XIV – Supplementary Information
Part XIV is used to report supplementary information if the foundation had $5,000 or more in assets at any time during the tax period. You will be asked to report information about foundation managers, and Contribution, Grant, Gift, Loan, Scholarship, and Programs.
If the foundation makes contributions to preselected charitable organizations and does not accept unsolicited requests for funds, they only need to check the box on line 2. If the foundation makes gifts, or grants, to individuals or organizations under other conditions, they would explain those other conditions in lines 2a, b, c, and d.
Line 3 allows the foundation to provide additional information on Grants and Contributions Paid During the Year and Approved for Future Payment. You will report the name and address of the recipient, the purpose of the grant, and the grant amount.
Part XV – A. Analysis of Income-Producing Activities
In Part XV-A, the foundation will analyze revenue items that are entered in Part I, lines 3–11, column (a), and line 5b. The foundation will be able to enter information on income-producing activities in categories that provide the business code, amount, and exclusion code, and indicate the related or exempt function income.
In column (a), the six-digit business code can be determined using the instructions for Form 990-T. In column (c), enter an exclusion code, from the list on the 990-PF Part XV-A IRS form instructions.
If amounts are reported in Part XV-A on lines 1–11, enter use column (b) to report income earned that is unrelated to business income. Use column (d), to report income earned that is excluded from the computation of unrelated business taxable income by section 512, 513, or 514. In column (e), any income earned that is related to the organization’s purpose or function and constitutes the basis for the organization’s exemption.
Part XV – B. Relationship of Activities to the Accomplishment of Exempt Purposes
Part XV-B is going to be used to provide an explanation on the amounts reported in column (e) of Part XV-A to verify whether the income was related to or exempt function income. The foundation can give a brief description of how each activity reported in column (e) contributed to the accomplishment of the organization’s exempt purposes.
Part XVI – Information Regarding Transfers To and Transactions and Relationships With Noncharitable Exempt Organizations
In Part XVI, the foundation will be able to report direct and indirect transfers with any other noncharitable exempt organization. Through a series of ‘yes’ or ‘no’ responses, the foundation can indicate the related transfers. If the answer to any of the related questions is ‘yes’ then the foundation can provide information regarding the amount, the name of the noncharitable exempt organization, and the description of the transfer.
This Part also allows the foundation to indicate whether they are affiliated with any tax-exempt organizations described in section 501(c) or in section 527. If there is an affiliation, then you will be able to provide the name, type, and relationship of the organization.
Thats it! You made it! Now, you can proceed with filing your 990-PF return with the IRS.
Keep in mind that Tax990 offers an internal audit to confirm you have completed the necessary information based on IRS e-file instructions. You can also share your return with other foundation members, if necessary, prior to filing for review and approval.
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