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Common questions about Form 990 and 990-T depreciation in ProConnect Tax

SOLVEDby IntuitUpdated September 26, 2023

Below are solutions to frequently asked questions about entering Form 990, Return of Organization Exempt From Income Tax, and Form 990-T, Exempt Organization Business Income Tax Return (and proxy tax under section 6033 (e) ) in the Exempt Org. returns.

  1. Go to Input Return Expenses Depreciation.
  2. Enter the Description of property.
  3. Enter the following fields under the General subsection:
    • Category (MANDATORY)
    • Date placed in service (negative date=various)
  4. Select Details for the asset.
  5. Under the Book Depr. (990/990-PF) subsection, enter the following fields:
    • Form
      • Select Rental activity from the dropdown menu.
    • Activity name or number
    • Cost or basis.
    • Method
  6. Under the Unrelated Business Depr. (990-T) subsection, enter the following fields:
    • Form 
      • Select Rental activity from the dropdown menu.
    • Activity name or number
    • Cost or basis
    • Method 
  7. Enter the Prior bonus depreciation or Prior depreciation, if applicable.
  8. Enter any other applicable fields.

If the depreciated asset is linked to a rental activity for Form 990 and linked directly to Form 990-T for unrelated business activity, the depreciation will be doubled on the Rental Income Worksheet.

Overrides you enter in Balance Sheet may cause:

  • The depreciation to double on the Rental Income Worksheet, and
  • The balance sheet for Form 990/990-EZ to become out of balance by the amount of depreciation.

You'll need to check for overrides to resolve this issue.

Follow these steps to check for overrides:

  1. Go to Input Return Balance Sheet.
  2. Check for balance sheet overrides entered under the Investments- Land, Buildings, & Equipment (-1=none) [O] subsection.
    • Entries in this area still let the program to add in the depreciation from assets entered in the depreciation screen.
  3. Move any override amounts entered to the Land, Buildings, & Equipment (-1=none) [O] subsection.
    • This subsection is located above the Investments- Land, Buildings, & Equipment (-1=none) [O] subsection.
    • These entries are directly related to the depreciation information coming from the depreciation screen and will override the amount flowing to the balance sheet.

If you want assets to appear on the depreciation schedule for Form 990-T, you should enter them in Depreciation in either the Book Depr. (990/990-PF) subsection or the Unrelated Business Depr. (990-T) subsection.

Refer to the "Directly connected expenses" section under Appendix A of the Instructions for Form 990-T for information on which assets qualify as a deduction.

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