990 Schedule R Instructions for Schedule R (Form 990)

2023

Instructions for Schedule R
(Form 990)

Department of the Treasury
Internal Revenue Service

Related Organizations and Unrelated Partnerships
Section references are to the Internal Revenue
Code unless otherwise noted.

Future developments. For the latest
information about developments related to
Form 990 and its instructions, such as
legislation enacted after they were
published, go to IRS.gov/Form990.

General Instructions

Note. Terms in bold are defined in the
Glossary of the Instructions for Form 990,
Return of Organization Exempt From
Income Tax.

Purpose of Schedule

Schedule R (Form 990) is used by an
organization that files Form 990 to provide
information on related organizations, on
certain transactions with related
organizations, and on certain unrelated
partnerships through which the
organization conducts significant
activities.

Who Must File

The chart below sets forth which
organizations must complete all or a part
of Schedule R and attach Schedule R to
Form 990. If an organization isn't required
to file Form 990 but chooses to do so, it
must file a complete return and provide all
of the information requested, including the
required schedules.

Overview

Part I of Schedule R (Form 990) requires
identifying information on any
organizations that are treated for federal
tax purposes as disregarded entities of
the filing organization. Part II requires
identifying information on related
tax-exempt organizations. Part III requires
identifying information on any related
organizations that are treated for federal
tax purposes as partnerships. Part IV
requires identifying information on any
related organizations that are treated for
federal tax purposes as C or S
corporations or trusts. Part V requires
information on transactions between the
organization and related organizations
(excluding disregarded entities). Part VI
requires information on an unrelated
organization treated as a partnership
through which the organization conducted
more than 5% of its activities (as
described in Part VI).
Part VII of Schedule R (Form 990) may
be used to provide additional information
in response to questions in Schedule R.

Relationships

An organization, including a nonprofit
organization, a stock corporation, a
partnership or limited liability company
(LLC), a trust, and a governmental unit
or other government entity, is a related
organization to the filing organization if it
stands, at any time during the tax year, in

Type of filer

IF you answer “Yes” to . . .

THEN you must complete . . .

All organizations

Form 990, Part IV, line 33
(regarding disregarded entities)

Schedule R, Part I.

All organizations

Form 990, Part IV, line 34
(regarding related organizations)

Schedule R, Parts II, III, IV, and V,
line 1, as applicable.

All organizations

Form 990, Part IV, line 35b
(regarding payments from or
transactions with controlled
entities)

Schedule R, Part V, line 2.

Section 501(c)(3) organization

Form 990, Part IV, line 36
(regarding transfers to exempt
noncharitable related
organizations)

Schedule R, Part V, line 2.

All organizations

Form 990, Part IV, line 37
(regarding conduct of activity
through unrelated partnership)

Schedule R, Part VI.

Aug 29, 2023

Cat. No. 51519M

one or more of the following relationships
to the filing organization.
• Parent—An organization that controls
(see definitions of control under Definition
of Control) the filing organization.
• Subsidiary—An organization controlled
by the filing organization.
• Brother/Sister—An organization
controlled by the same person or persons
that control the filing organization.
• Supporting/Supported—An
organization that is (or claims to be) at any
time during the organization's tax year (i) a
supporting organization of the filing
organization within the meaning of section
509(a)(3), if the filing organization is a
supported organization within the
meaning of section 509(f)(3); or (ii) a
supported organization, if the filing
organization is a supporting organization.
• Sponsoring Organization of a VEBA—
An organization that establishes or
maintains a section 501(c)(9) voluntary
employees' beneficiary association
(VEBA) during the tax year. A sponsoring
organization of a VEBA also includes an
employee organization, association,
committee, joint board of trustees, or
other similar group of representatives of
the parties which establish or maintain a
VEBA.
• Contributing Employer of a VEBA—An
employer that makes a contribution or
contributions to the VEBA during the tax
year.
Although a VEBA must report
sponsoring organizations and contributing
employers as related organizations,
sponsoring organizations and contributing
employers shouldn't report a VEBA as a
related organization, unless the VEBA is
related to the sponsoring organization or
contributing employer in some other
capacity listed above.
VEBA contributing employers and
sponsoring organizations. If the filing
organization is a section 501(c)(9) VEBA,
it must list its sponsoring organizations
and contributing employers on Schedule R
(Form 990). The filing organization must
report all information on its sponsoring
organizations in Parts II through IV, as
applicable. However, the filing
organization is required to list only the
name of its contributing employers in Parts
II through IV, and isn't required to report
any additional information in those parts.

The filing organization must also report its
related transactions with sponsoring
organizations and contributing employers
in Part V, line 1, and, if applicable, line 2.
Disregarded entity exception.
Disregarded entities are treated as
related organizations for purposes of
reporting on Schedule R (Form 990), Part
I, but not for purposes of reporting
transactions with related organizations in
Part V, or otherwise on Form 990. A
disregarded entity of an organization
related to the filing organization is
generally treated as part of the related
organization and not as a separate entity.
See Appendix F in the Instructions for
Form 990.
Bank trustee exception. If the filing
organization is a trust that has a bank or
financial institution trustee that is also the
trustee of another trust, the filing
organization isn't required to report the
other trust as a brother/sister related
organization on the ground of common
control by the bank or financial institution
trustee.

Definition of Control
Related organizations. For purposes of
determining related organizations:
Control of a nonprofit organization
(or other organization without owners
or persons having beneficial interests,
whether the organization is taxable or
tax exempt). One or more persons
(whether individuals or organizations)
control a nonprofit organization if they
have the power to remove and replace (or
to appoint, elect, or approve or veto the
appointment or election of, if such power
includes a continuing power to appoint,
elect, or approve or veto the appointment
or election of, periodically or in the event of
vacancies) a majority of the nonprofit
organization's directors or trustees, or a
majority of the members who have the
power to elect a majority of the nonprofit
organization's directors or trustees. Such
power can be exercised directly by a
(parent) organization through one or more
of the (parent) organization's officers,
directors, trustees, or agents, acting in
their capacity as officers, directors,
trustees, or agents of the (parent)
organization. Also, a (parent) organization
controls a (subsidiary) nonprofit
organization if a majority of the
subsidiary's directors or trustees are
trustees, directors, officers, employees,
or agents of the parent.
Control of a stock corporation. One
or more persons (whether individuals or
organizations) control a stock corporation
if they own more than 50% of the stock (by
voting power or value) of the corporation.

Control of a partnership or LLC.
One or more persons control a partnership
if they own more than 50% of the profits
interests or capital interests in the
partnership (including an LLC treated as a
partnership or disregarded entity for
federal tax purposes, regardless of the
designation under state law of the
ownership interests as stock, membership
interests, or otherwise). A person also
controls a partnership if the person is a
managing partner or managing member of
a partnership or LLC which has three or
fewer managing partners or managing
members (regardless of which partner or
member has the most actual control), or if
the person is a general partner in a limited
partnership which has three or fewer
general partners (regardless of which
partner has the most actual control). For
this purpose, a “managing partner” is a
partner designated as such under the
partnership agreement, or regularly
engaged in the management of the
partnership.
Control of a trust with beneficial
interests. One or more persons control a
trust if they own more than 50% of the
beneficial interests in the trust. A person’s
beneficial interest in a trust will be
determined in proportion to that person’s
actuarial interest in the trust as of the end
of the tax year.
In some situations, a named
beneficiary may have no determinable
interest in the trust. For instance, if Trust A
allows the trustee to distribute income and
principal in the trustee’s sole discretion for
10 years to the then-living issue of X, with
the remainder (if any) to Charity B, then
Charity B has no interest in the trust that
can be determined before the 10-year
period is ended, and therefore doesn't
control the trust for purposes of Form 990
and Schedule R.
See Regulations sections 301.7701-2,
3, and 4 for more information on
classification of corporations,
partnerships, disregarded entities, and
trusts.
Examples of control by multiple
persons.
Example 1. Organizations A and B
each appoint one-third of the board
members of Organizations C and D, and
aren't otherwise related to Organizations C
and D. Although neither Organization A
nor Organization B is a parent of
Organization C or Organization D,
Organizations C and D are controlled by
the same persons, and therefore are
brother/sister related organizations with
respect to each other.
Example 2. There are 1,000
individuals who are members of both
Organizations E and F. The members elect
the board members of both Organizations
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E and F. Organizations E and F are
brother/sister related organizations with
respect to each other.
Indirect control. Control can be indirect.
For example, if the filing organization
controls Entity A, which in turn controls
(under the definition of control in these
instructions) Entity B, the filing
organization will be treated as controlling
Entity B. To determine indirect control
through constructive ownership of a
corporation, rules under section 318 apply.
Similar principles apply for purposes of
determining constructive ownership of
another entity (a partnership or trust). If an
entity (X) controls an entity treated as a
partnership by being one of three or fewer
partners or members, then an organization
that controls X also controls the
partnership.
Example 1. B, an exempt
organization, wholly owns (by voting
power) C, a taxable corporation. C holds a
51% profits interest in D, a partnership.
Under the principles of section 318, B is
deemed to own 51% of D (100% of C's
51% interest in D). Thus, B controls both C
and D, which are therefore both related
organizations with respect to B.
Example 2. X, an exempt
organization, owns 80% (by value) of Y, a
taxable corporation. Y holds a 60% profits
interest as a limited partner of Z, a limited
partnership. Under the principles of
section 318, X is deemed to own 48% of Z
(80% of Y's 60% interest in Z). Thus, X
controls Y. X doesn't control Z through X's
ownership in Y. Y is a related organization
with respect to X, and (absent other facts)
Z isn't.
Example 3. Same facts as in
Example 2, except that Y is also one of
three general partners of Z. Because Y
controls Z through means other than
ownership percentage, and X controls Y, in
these circumstances, Z is a related
organization with respect to X. The other
general partners of Z (if organizations)
aren't related organizations with respect to
X, absent other facts.
Example 4. Organizations A, B, C,
and D are nonprofit organizations.
Organization A appoints the board of
Organization B, which appoints the board
of Organization C. A majority of the board
members of Organization D are also board
members of Organization A. Under these
circumstances, Organizations B and D are
directly controlled by Organization A, and
Organization C is indirectly controlled by
Organization A. Therefore, Organizations
B, C, and D are subsidiaries of
Organization A; Organization C is also a
subsidiary of Organization B; and
Organizations B and C have a brother/
sister relationship with Organization D.

2023 Instructions for Schedule R (Form 990)

Example 5. T, an exempt organization
described in section 501(c)(3), owns 40%
of the stock of U, a taxable C corporation.
T and U each own 40% of the stock of V,
another taxable C corporation. Under
these facts, T and U aren't related
organizations as parent/subsidiary
because T doesn't own more than 50% of
U's stock. Under section 318(a)(2)(C),
none of U's holdings are attributed to T by
virtue of T's ownership of U stock,
because T owns less than 50% of U stock.
Thus, T and V aren't related organizations
as parent/subsidiary.
Example 6. Same facts as in
Example 5, except that U is an S
corporation. Under section 318(a)(5)(E), T
constructively owns 16% of V through U
(40% of U's 40% ownership of V), giving T
a total ownership interest of 56% in V, and
making T and V related organizations as
parent/subsidiary.
Example 7. Same facts as in
Example 5, except that T owns 50% of U's
stock. T and U aren't related organizations
as parent/subsidiary because T doesn't
own more than 50% of U's stock. Under
section 318(a)(2)(C), U's holdings are
attributed to T by virtue of T's 50%
ownership of U's stock. Thus, T
constructively owns 20% of V through U
(50% of U's 40% ownership of V), giving T
a total ownership interest of 60% in V, and
making T and V related organizations as
parent/subsidiary.
Example 8. F is a 501(c)(3) public
charity that appoints the governing body of
G, another 501(c)(3) public charity. G is
supported by H, a Type III supporting
organization within the meaning of section
509(f)(1), but G doesn't control H. G and H
are thus related organizations because of
the supporting/supported relationship.
Absent other facts, F and H aren't related
organizations.
Group exemption. Central
organizations and subordinate
organizations of a group exemption
aren't required to be listed as related
organizations in Schedule R (Form 990),
Part II. All other related organizations of
the central organization or of a
subordinate organization are required to
be listed in Schedule R (Form 990). The
following rules apply.
• An organization that is a central or
subordinate organization in a group
exemption (whether filing an individual
return or a group return) isn't required to
list any of the subordinate organizations of
the group in Part II.
• In the case of a group return, the central
organization must attach a list of the
subordinate organizations included in the
group return in response to Form 990,
page 1, item H(b). The central
organization must list in Schedule R (Form
990), Parts II through IV the related

organizations of each subordinate
organization other than (1) related
organizations that are included within the
group exemption, or (2) related
organizations that the central organization
knows to be included in another group
exemption. If an organization isn't listed
because it is known to be included in
another group exemption, the central
organization must explain in Part VII the
relationship between its own group and
members and the related organization
known to be included in another group
exemption (but you needn't include the
names of such related organizations).
• An organization that isn't included in a
group exemption isn't required to list in
Part II a related organization that is
included in a group exemption. Similarly,
an organization that is included in a group
exemption isn't required to list in Part II a
related organization that is included in
another group exemption. In either case,
the organization must explain in Part VII
the relationship between it and the related
organization included in another group
exemption (but you needn't include the
names of such related organizations).
Even if a related organization isn't required
to be listed in Part II of Schedule R (Form
990), the organization must report its
transactions with the related organization
in Part V, as required by the Part V
instructions (for example, checking “Yes”
to Part V, line 1b, if the organization made
a grant to a related organization included
in a group exemption, and reporting on
Part V, line 2, the organization's receipt of
interest or annuities from a controlled
entity included in a group exemption),
including listing the name of the related
organization in Part V, line 2, column (a),
for transactions that must be reported in
line 2.

Specific Instructions
Part I. Identification of
Disregarded Entities

Enter the details of each disregarded
entity on separate lines of Part I.
Column (a). Name, address, and EIN.
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.
A disregarded entity generally

TIP must use the EIN of its sole

member. An exception applies to
employment taxes—for wages paid to
employees of a disregarded entity, the
disregarded entity must file separate
employment tax returns and use its own
EIN on such returns. See Regulations

2023 Instructions for Schedule R (Form 990)

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sections 301.6109-1(h) and 301.7701-2(c)
(2)(iv).
Column (b). Primary activity. Briefly
describe the primary activity of the
disregarded entity.
Column (c). Legal domicile. List the
U.S. state (or U.S. territory) or foreign
country in which the disregarded entity
is organized (the state or foreign country
whose law governs the disregarded
entity's internal affairs).
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. For
instance, if B is a disregarded entity of the
filing organization, and if C is a
disregarded entity of B, report B as the
direct controlling entity of C. If the filing
organization directly controls, enter its
name.

Part II. Identification of
Related Tax-Exempt
Organizations

For purposes of Schedule R (Form 990),
treat governmental units and
instrumentalities and foreign
governments as tax-exempt
organizations.
Enter the details of each related
organization on separate lines of Part II.
Column (a). Name, address, and EIN.
Enter the related organization's full legal
name, mailing address, and EIN.
Column (b). Primary activity. Briefly
describe the primary activity of the related
organization.
Column (c). Legal domicile. List the
U.S. state (or U.S. territory) or foreign
country in which the related organization
is organized. For a corporation, enter the
state of incorporation (or the country of
incorporation for a foreign corporation
formed outside the United States). For a
trust or other entity, enter the state whose
law governs the organization's internal
affairs (or the foreign country whose law
governs for a foreign organization other
than a corporation).
Column (d). Exempt Code section.
Enter the section that describes the
related organization (for example, section
501(c)(3) for a public charity, section

501(c)(6) for a business league, or section
527 for a separate segregated fund). For
purposes of Schedule R, an organization
that claims exemption is treated as
exempt. Also, for purposes of Schedule R,
treat as a section 501(c)(3) organization a
related foreign organization recognized
as a charity by the foreign country, or for
which the filing organization has made a
reasonable judgment (or has an opinion of
U.S. counsel) that the foreign organization
is described in section 501(c)(3). The filing
organization isn't required to make or
obtain such a determination for purposes
of Schedule R. For governmental units,
instrumentalities, and foreign
governments that don't have a section
501(c) determination letter, leave blank.
Column (e). Public charity status. For
a related section 501(c)(3) organization,
report its public charity status, using the
appropriate line number (lines 1 through
12d) corresponding to the public charity
status checked on Schedule A (Form
990), Public Charity Status and Public
Support, Part I. If the related organization
is a private foundation, use the
designation “PF.” If the related organization
is a section 509(a)(3) supporting
organization, also indicate its type: I, II,
III-FI, or III-O (for Type I, Type II, Type III
functionally integrated, or Type III other,
respectively).
For purposes of Schedule R, treat as a
public charity a related foreign
organization that hasn't been recognized
as a section 501(c)(3) public charity by the
IRS but for which the filing organization
has made a good faith determination,
based on an affidavit from the foreign
organization or the opinion of counsel, that
the foreign organization is the equivalent
of a public charity. The filing organization
isn't required to make or obtain such a
determination for purposes of Schedule R;
if it hasn't, leave column (e) blank.
Column (f). Direct controlling entity.
Enter the name of the entity (if any) that
directly controls the related organization;
otherwise, enter “N/A.” If the filing
organization directly controls, enter its
name.
Column (g). Section 512(b)(13) controlled entity. Check “Yes” if the related
organization is a controlled entity of the
filing organization under section
512(b)(13). If not, check “No.”

Part III. Identification of
Related Organizations
Taxable as a Partnership

In this part, identify any related
organization treated as a partnership for
federal tax purposes. If the partnership is
related to the filing organization by reason
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).
Enter the details of each related
organization on separate lines of Part III.
Some of the information requested in
this part is derived from Schedule K-1
(Form 1065), Partner's Share of Income,
Deductions, Credits, etc., issued to the
organization. If the Schedule K-1 (Form
1065) isn't available, provide a reasonable
estimate of the required information.
Column (a). Name, address, and EIN.
Enter the related partnership's full legal
name, mailing address, and EIN.
Column (b). Primary activity. Briefly
describe the primary business activity
conducted, or product or service provided,
by the related partnership (for example,
investment in other entities, low-income
housing, etc.).
Column (c). Legal domicile. List the
U.S. state (or U.S. territory) or foreign
country in which the related partnership is
organized (the state or foreign country
whose law governs the related
partnership's internal affairs).
Column (d). Direct controlling entity.
Enter the name of the entity (if any) that
directly controls the related partnership;
otherwise, enter “N/A.” If the filing
organization directly controls, enter its
name.
Column (e). Predominant income.
Classify the predominant type of
partnership income as:
• Related;
• Unrelated; or
• Excluded from tax under section 512,
513, or 514.
In other words, enter which of the three
types listed above is more prevalent than
the others.
For classification purposes, use the
definitions set forth in the instructions to
the Statement of Revenue in Form 990,
Part VIII, columns (B), (C), and (D).
Column (f). Share of total income.
Enter the dollar amount of the filing
organization's distributive share of the
related partnership's total income, in
accordance with the organization's profits
interest as specified by the partnership or
LLC agreement, for the related
partnership's tax year ending with or
within the filing organization's tax year.
Use the total amount reported by the
related partnership on Schedule K-1
(Form 1065) for the partnership's tax year
ending with or within the filing
organization's tax year (total of
Schedule K-1, Part III, lines 1 through 11
and 18, tax-exempt income).

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Column (g). Share of end-of-year assets. Enter the dollar amount of the filing
organization's distributive share of the
related partnership's end-of-year total
assets, in accordance with the
organization's capital interest, as specified
by the partnership or LLC agreement, for
the related partnership's tax year ending
with or within the filing organization's tax
year. Use Schedule K-1 (Form 1065) for
the partnership's year ending with or within
the organization's tax year to determine
this amount by adding the organization's
ending capital account to the
organization's share of the partnership's
liabilities at year end reported on the
Schedule K-1.
Column (h). Disproportionate allocations. Check “Yes” if the interest of the
filing organization as a partner of the
partnership (or as a member of the LLC) in
any item of income, gain, loss, deduction,
or credit, or any right to distributions was
disproportionate to the filing organization's
investment in such partnership or LLC at
any time during the filing organization's
tax year. Otherwise, check “No.”
Column (i). Code V—UBI amount in
box 20 of Schedule K-1 (Form 1065).
Enter the dollar amount, if any, listed as
the Code V amount (unrelated business
taxable income) in box 20 of
Schedule K-1 (Form 1065) received from
the related partnership for the
partnership's tax year ending with or
within the filing organization's tax year. If
no Code V amount is listed in box 20,
enter “N/A.”
If the organization has reason to

TIP believe that the stated amount in

box 20 is incorrect, it should
consult with the partnership. The stated
amount in box 20 isn't controlling with
respect to the organization's unrelated
business income tax liability.

Column (j). General or managing partner. Check “Yes” if the filing organization
was at any time during its tax year a
general partner of a related limited
partnership, or a managing partner or
managing member of a related general
partnership, LLC, or other entity treated as
a partnership. Otherwise, check “No.”
Column (k). Percentage ownership.
Enter the filing organization's percentage
interest in the profits or in the capital of the
related partnership, whichever is greater.

Part IV. Identification of
Related Organizations
Taxable as a Corporation
or Trust
In this part, identify any related
organization treated as a C or S
corporation or trust for federal tax

2023 Instructions for Schedule R (Form 990)

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).
Some of the information requested in
this part is derived from Schedule K-1
(Form 1041), Beneficiary's Share of
Income, Deductions, Credits, etc., or
Schedule K-1 (Form 1120-S),
Shareholder's Share of Income,
Deductions, Credits, etc., issued to the
organization. If the Schedule K-1 isn't
available, provide a reasonable estimate
of the required information.
Enter the details of each related
organization on separate lines of Part IV.
Column (a). Name, address, and EIN.
Enter the related organization's full legal
name, mailing address, and EIN.
Column (b). Primary activity. Briefly
describe the primary business activity
conducted, or product or service provided,
by the related organization (for example,
holding company, management
company).
Column (c). Legal domicile. List the
U.S. state (or U.S. territory) or foreign
country in which the related organization
is organized. For a corporation, enter the
state of incorporation (or the country of
incorporation for a foreign corporation
formed outside the United States). For a
trust or other entity, enter the state whose
law governs the organization's internal
affairs (or the foreign country whose law
governs for a foreign organization other
than a corporation).
Column (d). Direct controlling entity.
Enter the name of the entity (if any) that
directly controls the related organization;
otherwise, enter “N/A.” If the filing
organization directly controls, enter its
name.
Column (e). Type of entity. Use one of
the following codes to indicate the tax
classification of the related organization: C
(corporation or association taxable under
subchapter C), S (corporation or
association taxable under subchapter S),
or T (trust, including a split-interest trust).
Column (f). Share of total income. For
a related organization that is a C
corporation, enter the dollar amount of the
organization's share of the C corporation's
total income. To calculate this share,
multiply the total income of the C
corporation (as reported on its Form 1120,

U.S. Corporation Income Tax Return) by
the following fraction: the value of the filing
organization's shares of all classes of
stock in the C corporation, divided by the
value of all outstanding shares of all
classes of stock in the C corporation. The
total income is for the related
organization's tax year ending with or
within the filing organization's tax year.
For a related organization that is an S
corporation, enter the filing organization's
allocable share of the S corporation's total
income. Use the amount on Schedule K-1
(Form 1120-S) for the S corporation's tax
year ending with or within the filing
organization's tax year (Part III, lines 1
through 10, of Schedule K-1 (Form
1120-S)).
For a related organization that is a trust,
enter the total income and gains reported
on Part III, lines 1 through 8, of
Schedule K-1 (Form 1041) issued to the
filing organization for the trust's tax year
ending with or within the filing
organization's tax year.
A section 501(c)(3) organization
TIP that is an S corporation
shareholder must treat all
allocations of income from the S
corporation as unrelated business
income, including gain on the disposition
of stock.
Column (g). Share of end-of-year assets. Enter the dollar amount of the filing
organization's allocable share of the
related organization's total assets as of
the end of the related organization's tax
year ending with or within the filing
organization's tax year. For related C and
S corporations, this amount is determined
by multiplying the corporation's
end-of-year total assets by the fraction
described in column (f). For related trusts,
this amount corresponds to the filing
organization's percentage ownership in
the trust.
Column (h). Percentage ownership.
For a related organization taxable as a
corporation, enter the filing organization's
percentage of stock ownership in the
corporation (total combined voting power
or total value of all outstanding shares,
whichever is greater). For a related S
corporation, use the percentage reported
on Schedule K-1 (Form 1120-S) for the
year ending with or within the filing
organization's tax year. For a related
organization taxable as a trust, enter the
filing organization's percentage of
beneficial interest. In each case, enter the
percentage interest as of the end of the
related organization's tax year ending with
or within the filing organization's tax year.
Column (i). Section 512(b)(13) controlled entity. Check “Yes” if the related
organization is a controlled entity of the
filing organization under section

2023 Instructions for Schedule R (Form 990)

-5-

512(b)(13). If not, check “No.”
Split-interest trusts. If the related
organization is a split-interest trust
described in section 4947(a)(2), the
organization may enter in column (a) the
term “Charitable remainder trust,”
“Charitable lead trust,” or “Pooled income
fund,” as appropriate, instead of the trust's
name, EIN, or address. If the organization
was related to more than one of a certain
type of related split-interest trust during
the tax year, it should enter the number of
that type of trust in parentheses after the
name. For instance, if the organization had
two related charitable remainder trusts
and three related charitable lead trusts, it
should enter “Charitable remainder trusts
(2)” on one line of column (a) and
“Charitable lead trusts (3)” on another line
in column (a). The organization may leave
columns (e), (f), (g), and (h) blank for
these lines. Use Part VII if the organization
needs space to provide additional
information for columns (b), (c), (d), or (i).

Part V. Transactions With
Related Organizations
Line 1. Check “Yes” in the appropriate
boxes of line 1 if the filing organization
engaged in any of the transactions listed in
Part V with any related organizations
(other than disregarded entities listed in
Part I). A single transaction may be
described by and reported in more than
one line. A “transfer,” for purposes of Part
V, lines 1r and 1s, includes any
conveyance of funds or property not
described in lines 1a through 1q, whether
or not for consideration, such as a merger
with a related organization.
Line 2. The filing organization must report
on this line any of the following
transactions that it engaged in with a
controlled entity of the filing
organization, as defined in section
512(b)(13), during the tax year.
• All transactions described in line 1a,
which includes all receipts or accruals of
interest, annuities, royalties, or rent from a
controlled entity under section 512(b)(13),
regardless of amount.
• Any other type of transaction, described
in lines 1b through 1s, with controlled
entities, if the amounts involved during the
tax year between the filing organization
and a particular controlled entity exceed
$50,000 for that type of transaction.
Section 501(c)(3) organizations must
also report on line 2 transactions
described in Part V, lines 1b through 1s,
that they engaged in with related
tax-exempt organizations not described in
section 501(c)(3) (including section 527
political organizations), if the amounts
involved during the tax year between the
filing organization and a particular related
tax-exempt organization exceed $50,000.

Enter the details of each related
organization and each transaction type on
a separate line of the table. Transactions
of a specified type, described in lines 1b
through 1s, with a particular organization
don't need to be reported if the total
amount of transactions of such type during
the tax year didn't exceed $50,000.
Column (a). Name of related organization. Enter the full legal name of the
related organization.
Column (b). Transaction type (a–s).
Enter the transaction type (lines 1a
through 1s). Aggregate all transactions of
the same type with the same related
organization.
Column (c). Amount involved. The
amount involved in a transaction is the fair
market value of the services, cash, and
other assets provided by the filing
organization during its tax year, or the fair
market value received by the filing
organization, whichever is higher,
regardless of whether the transaction was
entered into by the parties in a prior year.
Any reasonable method for determining
such amount is acceptable.
Column (d). Method of determining
amount involved. Describe the method
used to determine the value of the
services, cash, and other assets reported
in column (c).
Split-interest trusts. If the organization
engaged in a type of transaction
reportable in Part V, line 2, with one or
more split-interest trusts described in
section 4947(a)(2), the organization may
enter in column (a) the term “Charitable
remainder trust,” “Charitable lead trust,” or
“Pooled income fund,” as appropriate,
instead of the trust's name. For instance, if
the organization carried a $100,000
liability for a loan it received from a related
charitable lead trust, it should enter
“Charitable lead trust” in column (a),
transaction type “e” in column (b), and
“$100,000” in column (c). Multiple
transactions of the same type with the
same type of split-interest trust may be
aggregated on the same line, with the
number of each type of trust listed in
parentheses. For instance, if the
organization received $60,000 from one
related charitable remainder trust as
payment for investment services and
$70,000 from another related charitable
remainder trust as payment for investment
services during the tax year, it may enter
“Charitable remainder trusts (2)” in column
(a), transaction type “l” in column (b), and
“$130,000” in column (c).

Part VI. Unrelated
Organizations Taxable as a
Partnership

($60,000/$1,300,000), wouldn't be greater
than 5% of X's total activities, and
therefore X wouldn't be required to identify
Y in Schedule R (Form 990), Part VI.

In determining the percentage of the
filing organization's activities as measured
by its total assets, use the amount
reported on Form 990, Part X, line 16,
column (B), as the denominator, and the
filing organization's ending capital account
balance for the partnership tax year
ending with or within the filing
organization's tax year as the numerator
(the amount reported on Schedule K-1
(Form 1065) can be used). In determining
the percentage of the filing organization's
activities as measured by its total revenue,
use the amount reported on Form 990,
Part VIII, line 12, as the denominator, and
the filing organization's distributive share
of the partnership's gross revenue for the
partnership tax year ending with or within
the filing organization's tax year as the
numerator.

Enter the details of each organization
on separate lines of Part VI.

In this part, provide information on any
unrelated organization (an organization
that isn't a related organization with
respect to 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.

Example. X, a section 501(c)(3)
organization, is a partner of Y, an
unrelated partnership, which conducts an
activity that constitutes an unrelated
trade or business with respect to X. X's
distributive share of Y's total income is
$60,000 for Y's tax year ending with or
within X's tax year. X has an ending capital
account balance in Y of $120,000 as
reported on Schedule K-1 (Form 1065).
X's total revenue and total assets for its tax
year are $1,000,000 and $1,200,000,
respectively. Because X's total assets
exceed X's total revenue for its tax year, X
must consider total assets in determining
whether X conducted more than 5% of its
activities through Y for X's tax year. X
conducted 10% of its activities through Y,
as measured by X's total assets
($120,000/$1,200,000), and thus must
identify Y in Schedule R (Form 990), Part
VI, and provide the required information. If,
instead, X's total revenue for its tax year
was $1,300,000, then total revenue would
be considered rather than total assets; X's
activities conducted through Y, as
measured by X’s total revenue
-6-

Disregard the unrelated partnerships
that meet both of the following conditions.
1. 95% or more of the filing
organization's total revenue from the
partnership for the partnership's tax year
ending with or within the organization's tax
year is described in sections 512(b)(1)–(3)
and (5), such as interest, dividends,
royalties, rents, and capital gains
(including unrelated debt-financed
income).
2. The primary purpose of the filing
organization's investment in the
partnership is the production of income or
appreciation of property and not the
conduct of a section 501(c)(3) charitable
activity such as program-related investing.

Some of the information requested in
this part is derived from Schedule K-1
(Form 1065) issued to the organization. If
the Schedule K-1 isn't available, provide a
reasonable estimate of the required
information.
Column (a). Name, address, and EIN.
Enter the unrelated partnership's full legal
name, mailing address, and EIN.
Column (b). Primary activity. Briefly
describe the primary business activity
conducted, or product or service provided,
by the unrelated partnership.
Column (c). Legal domicile. List the
U.S. state (or U.S. territory) or foreign
country in which the unrelated partnership
is organized (the state or foreign country
whose law governs the unrelated
partnership's internal affairs).
Column (d). Predominant income.
Classify the predominant type of income
as:
• Related;
• Unrelated; or
• Excluded from tax under section 512,
513, or 514.
In other words, enter one of the three
types of income listed above that is more
prevalent than the others. For
classification purposes, use the definitions
set forth in the instructions to the
Statement of Revenue in Form 990, Part
VIII, columns (B), (C), and (D).
Column (e). Section 501(c)(3) partners. Check “Yes” if all the partners of the
unrelated partnership (or members of the
LLC) are section 501(c)(3) organizations
or governmental units (or wholly owned
subsidiaries of either). Otherwise, check
“No.”
Column (f). Share of total income.
Enter the dollar amount of the filing

2023 Instructions for Schedule R (Form 990)

organization's distributive share of the
related partnership's total income, in
accordance with the organization's profits
interest as specified by the partnership or
LLC agreement, for the related
partnership's tax year ending with or
within the filing organization's tax year.
Use the total amount reported by the
related partnership on Schedule K-1
(Form 1065) for the partnership's tax year
ending with or within the filing
organization's tax year (total of
Schedule K-1, Part III, lines 1 through 11
and line 18, tax-exempt income).
Column (g). Share of end-of-year assets. Enter the dollar amount of the filing
organization's distributive share of the
unrelated partnership's total assets, in
accordance with the filing organization's
capital interest as specified by the
partnership or LLC agreement, as of the
end of the unrelated partnership's tax
year ending with or within the filing
organization's tax year. Use the ending
capital account reported on Schedule K-1
(Form 1065) for the year ending with or
within the filing organization's tax year.

Column (h). Disproportionate allocations. Check “Yes” if the interest of the
filing organization as a partner of the
partnership (or as a member of the LLC) in
any item of income, gain, loss, deduction,
or credit, or any right to distributions was
disproportionate to the organization's
investment in such partnership or LLC at
any time during the filing organization's
tax year. Otherwise, check “No.”
Column (i). Code V—UBI amount in
box 20 of Schedule K-1 (Form 1065).
Enter the dollar amount, if any, listed as
the Code V amount (unrelated business
taxable income) in box 20 of
Schedule K-1 (Form 1065) received from
the unrelated partnership for the
partnership's tax year ending with or
within the filing organization's tax year. If
no Code V amount is listed in box 20,
enter “N/A.”
If the organization has reason to

TIP believe that the stated amount in

box 20 is incorrect, it should
consult with the partnership. The stated
amount in box 20 isn't controlling with

2023 Instructions for Schedule R (Form 990)

-7-

respect to the organization's unrelated
business income tax liability.
Column (j). General or managing partner. Check “Yes” if the filing organization
was at any time during its tax year a
general partner of an unrelated limited
partnership, or a managing partner or
managing member of an unrelated general
partnership, LLC, or other entity treated as
a partnership. Otherwise, check “No.”
Column (k). Percentage ownership.
Enter the filing organization's percentage
interest in the profits or in the capital of the
related partnership, whichever is greater.

Part VII. Supplemental
Information

Use Part VII 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).